SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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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, 2002
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 of
Incorporation or organization) | 13-3467669
(I.R.S. Employer
Identification 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)

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

| | Title of Each Class | Name of Each Exchange
     on which Registered
| | ------------------- | ----------------------------------------------

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| | COMMON STOCK, PAR VALUE $.001
9.25% CONVERTIBLE REDEEMABLE
SUBORDINATED DEBENTURES | NEW YORK STOCK EXCHANGE
NEW YORK STOCK EXCHANGE
| | ---------------------------------------------------------------------------------- | -----------------------------------------------

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

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Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes |_| No |X|

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. |_|

Indicate by check mark whether the registrant is an accelerated
filer (as defined in the Exchange Act Rule 12b-2). Yes |X| No |_|

The aggregate market value of the voting stock held by
non-affiliates of the registrant was approximately $167,769,211 as of December
15, 2003.

At December 15, 2003, there were 27,376,552 shares of the registrant's
Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE
None

INTERPOOL, INC.
FORM 10-K
TABLE OF CONTENTS

|Item | Page
|---- | ----

PART I

|ITEM 1.
ITEM 2.
ITEM 3.
ITEM 4. | BUSINESS
PROPERTIES
LEGAL PROCEEDINGS
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS | 1
26
26
28
|------------------------------- | ----------------------------------------------------------------------------------------- | ----------

PART II

|ITEM 5. 
ITEM 6. 
ITEM 7. 
ITEM 7A. 
ITEM 8. 
ITEM 9. 
ITEM 9A. | MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
SELECTED FINANCIAL DATA
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
CONTROLS AND PROCEDURES | 29
30
32
65
68
137
137
|--------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------

PART III

|ITEM 10. 
ITEM 11. 
ITEM 12. 
ITEM 13. 
ITEM 14. | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
EXECUTIVE COMPENSATION
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
PRINCIPAL ACCOUNTANT FEES AND SERVICES | 144 
148 
157 
159 
164
|------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -----------------------

PART IV

|ITEM 15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K | 166
|-------- | --------------------------------------------------------------- | ---

|SIGNATURES | 177
|---------- | ---

PART I

ITEM 1.  BUSINESS

Introductory Note

In preparation for our 2002 annual audit, we determined that
several direct finance lease transactions with customers in 2001 and 2000 had
been accounted for incorrectly in our prior financial statements. Down payments
received from these customers had been erroneously recorded as revenue when
collected rather than as a reduction to the net investment in the lease. We also
determined that our former computer leasing segment, which had been classified
as a discontinued operation in our financial statements for the first three
quarters of 2002 and for 2001 and 2000, should have been classified as part of
continuing operations because the requirements of discontinued operation
accounting treatment were not satisfied.

As a result, we determined that it would be necessary for us to
restate our financial statements for the first three quarters of 2002 and for
the years ended December 31, 2001 and 2000. Because our financial statements for
2001 and 2000 originally had been audited by Arthur Andersen LLP, which has
discontinued its auditing practice, we requested that our new auditors, KPMG
LLP, conduct audits of our restated financial statements for the years ended
December 31, 2001 and 2000, along with their audit of our financial statements
for the year ended December 31, 2002.

The Audit Committee of our Board of Directors engaged as special
counsel a law firm that had not previously represented us to conduct an internal
investigation into the accounting errors and circumstances requiring restatement
of our previously issued 2001 and 2000 financial statements. This investigation
was not completed until the fourth quarter of 2003. The findings and
recommendations of this investigation, and the measures we have taken and are
taking to implement these recommendations, are detailed later in this report
under Item 9A.

As a result of an extensive review by us and the re-audits
conducted by KPMG, we determined that, in addition to the accounting errors
mentioned above, certain additional items in our prior financial statements also
would require restatement, including the following:

| | (1) | Certain leases that had been accounted for as operating leases should have been
accounted for as direct finance leases. In addition, revenue related to leases
classified as finance leases had been understated;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Reserves established for residual guaranties under certain financings were
overstated;
| | --- | --------------------------------------------------------------------------------------

| | (3) | The documentation of a swap designed to hedge interest rate fluctuations for a
chassis securitization facility did not meet the requirements of SFAS 133 and,
therefore, the swap did not qualify for hedge accounting treatment. In addition,
we incorrectly applied the transition rules for certain swaps when we adopted
SFAS 133 on January 1, 2001;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | Receivables related to our piggyback trailer fleet had been overstated in 1999,
2000 and the first three months of 2001;
| | --- | ------------------------------------------------------------------------------------------------------------------------

| | (5) | Income earned on intercompany transactions with our 50% owned subsidiary
Container Applications International, Inc. ("CAI") had not been eliminated from
the equity earnings recorded for this subsidiary;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (6) | Deferred tax asset valuation allowances related to the realization of our net
operating losses and other tax assets were understated;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------

| | (7) | The net book value of certain containers, acquired from an investment
partnership in December 1996, was overstated;
| | --- | -------------------------------------------------------------------------------------------------------------------

| | (8) | Adjustments were required relating to certain inter-company accounts with
foreign subsidiaries that had not been reconciled at December 31, 2000 and 2001;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------

| | (9) | The accounting for an insurance claim for a defaulted lease was changed, which
resulted in a reduction to recorded receivables due from the insurance carrier
and, correspondingly, reduced lease revenues and other income for certain
amounts billable under the lease contract that are not probable of collection
from the lessee but which we believe are fully collectible under the insurance
contract; and
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (10) | Other adjustments were made, consisting primarily of changes in accruals and
estimates as well as reclassification of previously recorded entries to proper
periods.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

The aggregate effect of the restatement of all of these items
had the following impact on previously issued financial statements:

| |  | Increased net income by $.2 million for the year ended December 31, 2000;
| | - | -------------------------------------------------------------------------

| |  | Decreased net income by $14.4 million for the year ended December 31, 2001;
| | - | ---------------------------------------------------------------------------

| |  | Decreased retained earnings at January 1, 2000 by $2.0 million;
| | - | ---------------------------------------------------------------

| |  | Decreased stockholders' equity by $11.2 million and $1.7 million for the
years ended December 31, 2001 and 2000, respectively;
| | - | ------------------------------------------------------------------------------------------------------------------------------

| |  | Increased net investment in direct financing leases by $46.1 million and $61.8
million at December 31, 2001 and December 31, 2000, respectively; and
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Decreased leasing equipment, net by $37.5 million, and $24.7 million at December
31, 2001 and December 31, 2000, respectively.
| | - | ------------------------------------------------------------------------------------------------------------------------------

While the restatement was necessary, we believe that these
changes to our previously issued financial statements do not represent a
material change in our financial condition or result in a material increase in
the amount of our future obligations or our future cash needs.

Because our financial restatement and the re-audits, as well as
the completion of the internal investigations by special counsel to our Audit
Committee, prevented the timely completion of our financial statements and
Annual Report on Form 10-K for the year ended December 31, 2002 and our
financial statements and Quarterly Reports on Form 10-Q for interim periods in
2003, we requested and received necessary waivers under our debt agreements.
Most of these waivers, as currently in effect, waive any default resulting from
the late preparation and filing with the Securities and Exchange Commission
(SEC) of our financial statements and required periodic reports for 2002 and the
first three quarters of 2003, provided that our 2002 Annual Report on Form 10-K
is filed with the SEC by January 9, 2004, and our Quarterly Reports on Form 10-Q
for the first three quarters of 2003 are filed with the SEC by January 31, 2004,
February 29, 2004, and March 31, 2004, respectively. We have not requested or
received waivers with respect to our Annual Report on Form 10-K for the year
ending December 31, 2003, or our Quarterly Reports on Form 10-Q for 2004,
although we anticipate requesting such waivers prior to March 31, 2004.

Following our announcement in July 2003 that our Audit Committee
had commissioned an internal investigation by special counsel into our
accounting, we were notified that the SEC had opened an informal investigation
of Interpool. As we anticipated, this investigation was subsequently converted
to a formal investigation and remains pending as of the date this report was
filed with the SEC. The New York office of the SEC has received a copy of the
written report of the internal investigation and has issued subpoenas requesting
documents and information from our Audit Committee and certain other parties. We
have also been advised that the United States Attorney's office for the
District of New Jersey has received a copy of the written report of the internal
investigation and has opened a parallel investigation focusing on certain
matters described in the report by the Audit Committee's special counsel.
We have been informed that Interpool is neither a subject nor a target of the
investigation by the U.S. Attorney's office. We are cooperating fully with
both of these investigations.

We have usually funded a significant portion of the purchase
price for new containers and chassis through borrowings under our revolving
credit agreement and other lines of credit or through secured financings with
the financial institutions with which we have relationships. However, while we
have successfully completed several significant financings during 2003, our
ability to borrow funds on favorable terms has been severely limited since March
31, 2003 because of the restatement to our historical financial statements, the
related Audit Committee and SEC investigations and the delay in completing our
audited 2002 financial statements and the filing of our Annual Report on Form
10-K for 2002. Our reduced ability to borrow funds on favorable terms has
required us to reduce the level of new business we have written with customers.
In addition, although we have in the past paid our equipment manufacturers for
our acquisitions of containers and chassis within normal trade terms (generally
60-90 days), in recent months we have generally not made payments on this
schedule because of the limited availability of new financings. As of December
22, 2003, the total amount we owed to these manufacturers for equipment already
delivered (most of which has been placed into service in our fleet) or committed
to purchase was approximately $120.5 million. We advised our manufacturers that
we intended to satisfy a total of $54.0 million of these outstanding obligations
in December 2003, with the remaining balances to be paid in January or February
2004. Our manufacturers have consented to this payment schedule. We have made
the payments due in December 2003 to these manufacturers. We may seek further
deferrals from these manufacturers.

We currently intend to fund our remaining payment obligations to
these manufacturers with proceeds from one or more financings that are currently
in process. We have received a signed commitment from a bank regarding a term
loan facility of up to $100.0 million, which would be secured by newly acquired
equipment. While this financing is not assured and remains subject to
documentation and other customary closing conditions before it would be
consummated, our discussions with this institution are at an advanced stage as
of the date of filing of this Annual Report on Form 10-K and the preparation of
formal legal documentation for this loan has been commenced by counsel for the
lender.

We also have had discussions with other financial institutions,
though at a more preliminary stage, regarding other potential financing
transactions that we believe could be consummated early in 2004. Therefore, we
believe that we should be able to obtain the financing necessary for us to
satisfy our remaining manufacturer payment obligations in the near future. We
may also elect to fund a portion of our remaining obligations to our
manufacturers through use of our available cash (subject to obtaining approval
from certain lenders, if required).

While we are optimistic that we will be able to obtain the
financing necessary to enable us to satisfy our remaining manufacturer
obligations on the schedule we have presented to our manufacturers, in the event
that we are unable to promptly consummate one or more financings of at least $50
million, our available cash resources would likely not be sufficient to make the
remaining payments that may be required by our manufacturers, and one or more of
these manufacturers could take action against us. In addition, the taking of
such action by one or more manufacturers, or the possibility that such action
could be taken based upon our failure to satisfy our remaining payment
obligations to these manufacturers, may prompt one or more of our other lenders
to claim that a cross-default has occurred under the provisions of such
lender's debt instruments and to attempt to declare our obligations to such
lender immediately due and payable.

For a further discussion of our financial restatement, see Note
2 to the Consolidated Financial Statements and Management's Discussion and
Analysis of Financial Condition and Results of Operations.

General

(Unless otherwise indicated, all fleet statistics including
the size of the fleet, utilization of the leasing equipment or the rental rates
per day that are set forth in this Annual Report on Form 10-K exclude the
information of our 50%-owned consolidated subsidiary CAI. The market share,
ranking and other data contained in this Annual Report on Form 10-K are based
either on our management's own estimates, independent industry
publications, reports by market research firms or other published independent
sources and, in each case, are believed by management to be reasonable
estimates. However, market share data is subject to change and cannot always be
verified with certainty due to limits on the availability and reliability of raw
data, the voluntary nature of the data gathering process and other limitations
and uncertainties inherent in any statistical survey of market shares. As a
result, you should be aware that market share, ranking and other similar data
set forth herein, and estimates and beliefs based on such data, might not be
reliable.)

We are the largest lessor of intermodal chassis in North America
and one of the world's leading lessors of intermodal dry freight standard
containers. At December 31, 2002, our chassis fleet totaled approximately
204,000 chassis and our container fleet totaled approximately 796,000 twenty
foot equivalent units (TEUs). From 1997 to 2002, we increased the size of our
chassis fleet at a compound annual rate of 27%, primarily as the result of the
chassis fleet acquired during 2000 from the North American Intermodal Division
of Transamerica Leasing, Inc. ("TA"), and increased our container
fleet at a compound annual rate of 13%.

We concentrate on leasing equipment to our customers on a
long-term basis. Substantially all of our new equipment is initially leased for
terms of five to eight years and approximately 75% of our total fleet of chassis
and 85% of our total fleet of containers are currently on long-term lease. We
believe our focus on long-term leasing has enabled us to:

| |  | Maintain high utilization rates of our equipment, which over the last five years
averaged 99% for containers and 95% for chassis;
| | - | ---------------------------------------------------------------------------------------------------------------------------------

| |  | Achieve more stable and predictable earnings; and
| | - | -------------------------------------------------

| |  | Concentrate on the expansion of our asset base through the purchase and lease of
new equipment to fulfill specific orders for new long-term leases.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------

Approximately 25% of our chassis are currently leased on a
short-term basis to satisfy customers' peak or seasonal requirements,
generally at higher rates than under long-term leases. For customers who require
daily or weekly chassis rentals, we operate chassis pools at major domestic
shipping ports and terminals. These chassis pools consist of our chassis as well
as those of our customers.

Approximately 15% of our containers are currently leased on a
short-term basis. Our 50%-owned consolidated subsidiary, CAI, markets our
containers available for short-term leasing as part of its fleet, facilitating
redeployment of our containers at the end of long-term leases. Our relationship
with CAI maximizes utilization of our container fleet and increases our
influence in the marketplace by giving us the world's third largest
container lessor fleet on a combined basis. At December 31, 2002, CAI had a
container fleet of approximately 299,000 containers, including approximately
189,000 containers that were managed for others. CAI's managed equipment
included approximately 80,600 containers that were managed for us. CAI's
average utilization at December 31, 2002 was 79.7%.

We and our predecessors have been involved in the business of
leasing transportation equipment since 1968. We lease our chassis and containers
to a diversified customer base of over 600 shipping and transportation customers
throughout the world, including all of the world's 20 largest international
container shipping lines and major North American railroads. We provide customer
service and market to our customers through a worldwide network of offices and
agents. We believe one of the key factors in our ability to compete effectively
has been the long-standing relationships that we have established with most of
the world's large shipping lines and major North American railroads. As a
result of these relationships, 7 of our top 10 customers have been customers for
at least 10 years.

Industry Overview

The fundamental components of intermodal transportation are the
chassis and the container. When a container vessel arrives in port, each marine
container is loaded onto a chassis or rail car. Most containers are constructed
of steel in accordance with recommendations of the International Standards
Organization ("ISO"). The basic container type is the general-purpose dry
freight standard container which measures 20 or 40 feet long, 8 feet wide and 8
1/2 or 9 1/2 feet high. In general, 20-foot containers are used to carry heavy,
dense cargo loads (such as industrial parts and certain food products) and in
areas where transport facilities are less developed, while 40-foot containers
are used for lighter weight finished goods (such as apparel, electronic
appliances and other consumer goods) in areas with better developed transport
facilities. A chassis is a rectangular, wheeled steel frame, generally 23 1/2 or
40 feet in length, built specifically for the purpose of transporting a
container. Once mounted, the chassis and container 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 non-uniformity of
international standards for chassis, chassis used in the United States are
seldom used in other countries.

Containers provide a secure and cost-effective method of
transporting finished goods and component parts because they are generally
freely interchangeable between different modes of transport, making it possible
to move cargo from a point of origin to a final destination without the repeated
unpacking and repacking of the goods required by traditional shipping methods.
The same container may be carried successively on a ship, rail car and chassis
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 en route 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
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.

Between 1990 and 2001, worldwide container traffic at the
world's major ports has grown at a compound annual rate of 9.85%,
calculated using the Containerization International Yearbook of 1992 and
2003.

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 trend in outsourcing manufacturing to lower labor rate areas;
| | - | -----------------------------------------------------------------

| |  | The expansion of shipping lines;
| | - | --------------------------------

| |  | The growing reliance by manufacturers on "just-in-time" delivery methods; and
| | - | -----------------------------------------------------------------------------

| |  | Increased exports by technologically advanced countries of component parts for
assembly in other countries and the subsequent re-importation of finished
products.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

In recent years, domestic railroads and trucking lines have
begun actively marketing intermodal services for the domestic transportation of
freight. We believe that this trend should serve to accelerate the growth of
intermodal transportation resulting in increased chassis and container demand.

The Leasing Market

Leasing companies own a significant portion of North
America's chassis and of the world's container fleet, with the balance
owned predominantly by shipping lines and railroads according to our estimates.
Leasing companies have maintained this market position because container
shipping lines and railroads receive both financial and operational benefits by
leasing a portion of their equipment. The principal benefits of leasing are the
following:

| |  | Provide shipping lines and railroads with an alternative source of financing in
a traditionally capital-intensive industry;
| | - | ---------------------------------------------------------------------------------------------------------------------------

| |  | Enable shipping lines and railroads to expand their routes and market shares at
a relatively inexpensive cost without making a permanent commitment to support
their new structure;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Enable shipping lines and railroads to benefit from leasing companies'
relationships with equipment manufacturers;
| | - | ------------------------------------------------------------------------------------------------------------------

| |  | Enable shipping lines and railroads to accommodate seasonal use and/or
geographic concentration, thereby limiting their capital investment and storage
costs; and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Enable shipping lines and railroads to maintain an optimal mix of equipment
types in their fleets.
| | - | --------------------------------------------------------------------------------------------------

Because of these benefits, container shipping lines and
railroads generally obtain a significant portion of their container and chassis
fleets from leasing companies, either on short-term or long-term leases.
Short-term leases provide considerable operational flexibility in allowing a
customer to pick up and drop off equipment at various worldwide locations 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. Many short-term leases are "master
leases," under which a customer reserves the right to lease a certain number of
containers or chassis 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 or a retroactive increase in lease payments.

Business Strategy

Our objective is to continue to expand on our market position as
a leading long-term lessor of intermodal transportation equipment. To achieve
this objective, we intend to continue to:

| |  | Focus on our core business of domestic chassis and international marine
container leasing. Our strong market position in the chassis and container
leasing businesses provide us with economies of scale that benefit our
customers. Our equipment and operations are located worldwide to meet our
domestic and international customers' needs in a timely manner. In
addition, we are able to focus our management and financial resources to compete
effectively for equipment leasing requirements of all quantities.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Concentrate on long-term leasing to achieve high utilization rates and to
minimize the impact of economic cycles on earnings. We concentrate
on long-term leases in order to minimize the impact of economic cycles on our
revenues and to achieve high utilization and more stable and predictable
earnings. The lower rate of turnover provided by long-term leases enables us to
concentrate on the expansion of our asset base through the purchase and lease of
new equipment, rather than on the repeated re-marketing of our existing fleet.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Re-marketing of equipment when returned by lessees.When long-term leases
reach their termination date, we make every effort to extend the lease with the
customer that originally leased the equipment, or in lieu of that, to lease the
equipment to another customer for an extended term. If we are not successful in
re-leasing containers, the equipment is made available to our 50%-owned
consolidated subsidiary, CAI, which manages our containers in the short-term
marketplace. This allows us to maintain our focus on long term leasing while CAI
expands its fleet of equipment that it manages for us and for others, providing
CAI with further economies of scale.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Purchase chassis and containers to fulfill specific customer orders. We
generally purchase new equipment to fulfill new long-term lease orders.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------

| |  | Make strategic acquisitions of complementary businesses and asset portfolios
on an opportunistic and financially disciplined basis. We intend to
continue to review acquisition opportunities whenever asset prices and market
conditions are favorable.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Historically, we have regularly entered into new long-term lease
transactions with shipping lines and other customers as market conditions
warranted. During the second half of 2003, however, notwithstanding strong
conditions in the leasing markets, we have entered into a limited amount of new
lease transactions, because our financial restatement and Audit Committee
investigation, and the resulting delay in completion of our audited financial
statements and filing of our Annual Report on Form 10-K, have significantly
reduced the availability of new financing necessary to fund acquisitions of new
equipment for lease to customers. We anticipate that once our delinquent
financial statements and SEC reports have been filed, we will again be able to
obtain long-term financing on favorable terms and will resume writing new
business at the levels we have experienced over the past few years.

Operations

Lease Terms.
Approximately 85% of our containers and 75% of our chassis are leased on a
long-term basis as of December 31, 2002. Our long-term leases generally have
five to eight year initial terms.

We offer our customers both operating leases and direct finance
leases to satisfy customer preference and demand. In most cases, a direct
finance lease provides the customer the opportunity to acquire ownership of the
equipment.

Lease rentals are typically calculated on a per diem basis,
regardless of the term of the lease. Our 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, our leases usually require lessees to repair any damage to the chassis
and containers. Lessees are also required to indemnify us against our losses
arising from accidents or similar occurrences involving the leased equipment.
Our 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.

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 or a retroactively applied increase in lease payments.
We experience minimal early returns of our equipment under our long-term leases,
primarily because of the penalties involved. In addition, such customers must
return all equipment 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 desire to 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 one or more
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.

Chassis Equipment Tracking and Billing. We use 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 our chassis leasing activities. The system processes
information received electronically from our regional offices. The system
records the movement and status of each chassis and links that information with
the complex data comprising the specific lease terms in order to generate
billings to lessees. In 2002, more than 165,000 movement transactions per month
were processed on average through the system, which is capable of tracking
revenue on the basis of individual chassis. The system also generates a wide
range of management reports containing information on all aspects of our leasing
activities.

Chassis Pools. For customers who require daily or weekly
chassis rentals, we operate "chassis pools" at most of the major port
authorities and terminal operations throughout the United States. These chassis
pools consist of our chassis and those of our customers. The principal ports in
the United States where we operate chassis pools are Baltimore, Boston,
Charleston, Houston, New Orleans, Norfolk, Long Beach, Oakland, Seattle and
Savannah. We also operate chassis pools at railroad locations within the United
States.

Depots. We and our 50% owned consolidated subsidiary,
CAI, operate in all major transportation markets throughout the world. Depots
are facilities owned by third parties at which containers, chassis and other
items of transportation equipment are stored, maintained and repaired. We retain
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 chassis and containers. Some agents are paid a fixed
monthly retainer to defray recurring operating expenses and some are guaranteed
a minimum level of commission income. In addition, we generally reimburse our
agents for incidental expenses.

Logistic Support.
Our worldwide network of offices and relationships and our industry experience
enables us to provide logistic services in order to facilitate the movement of
chassis and containers to meet our customers' needs.

Repositioning and
Related Expenses. If lessees return large numbers of equipment to a location
with a larger supply than demand, we may incur expenses in repositioning the
equipment to a more favorable location. Repositioning expenses generally range
between $75 and $700 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, we may
also incur storage costs, which generally range between $.20 and $1.45 per TEU
per day. In addition, we bear certain operating expenses associated with our
chassis and containers, such as:

| |  | The costs of maintenance and repairs not required to be made by lessees;
| | - | ------------------------------------------------------------------------

| |  | Agent fees;
| | - | -----------

| |  | Depot expenses for handling;
| | - | ----------------------------

| |  | Inspection and storage; and
| | - | ---------------------------

| |  | Any insurance coverage in excess of that maintained by the lessee.
| | - | ------------------------------------------------------------------

Maintenance, Repairs and Refurbishment. As chassis and
containers age, the need for maintenance increases, and they may eventually
require extensive maintenance. Our customers are generally responsible for
maintenance and repairs of equipment other than normal wear and tear. When
normal wear and tear of equipment is extensive, the equipment may have to
undergo a major repair including a refurbishment or remanufacture. Refurbishing
and remanufacturing involve substantial cost, but remanufacture or refurbish
costs are substantially less than the cost of purchasing a new chassis.

Disposition of Chassis and Container Residual Values. On
an ongoing basis, we sell 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. Pursuant to our relationship with CAI, containers that have come off
long-term lease and have been designated for short-term leasing (not including
renewals with existing lessees) are provided to CAI for deployment in CAI's
short-term fleet. For each of our containers in CAI's fleet, CAI pays us
its average total fleet per diem rate less a management fee. Containers made
available for short-term leasing under our agreement with CAI are reported by us
as fully utilized. Containers are also 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 upon, among other factors, mechanical or economic
obsolescence, the current newly manufactured equipment price, as well as its
physical condition. While there have been no major technological advances in the
short history of containerization that have made active equipment obsolete,
several changes in standards have decreased the demand for older equipment, such
as the increase in the standard height of containers from 8 feet to 8 1/2 feet
in the early 1970's.

Sources of Supply. Most chassis used in the United States
are manufactured domestically. Manufacturers of chassis frequently produce
over-the-road trailers as well, and can convert some production capability to
chassis as needed. Because of the rising demand for containers and the
availability of relatively inexpensive labor in the Pacific Rim, approximately
85% 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, other parts of the world.

When manufacturing is complete, new chassis and containers are
inspected to insure that they conform to applicable standards of the
International Standards Organization and other international self-regulatory
bodies, as well as our internal standards.

PoolStat Chassis Pool Management

Our proprietary
internet-based real-time chassis management system is called "PoolStat".
"PoolStat" has enabled us to operate, on a cooperative basis, pools of
chassis that are owned by us and by shipping lines. Using this program, shipping
lines and railroads can "pool" their chassis at common locations such as marine
terminals and railroad depots. Our "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. In
addition, the centralized maintenance and repair feature improves service levels
to customers and we receive a management fee.

"PoolStat" provides several benefits to customers,
including allowing customers to:

| |  | Maintain lower overall inventory requirement at each location;
| | - | --------------------------------------------------------------

| |  | Decrease maintenance, repair and other operating expenses;
| | - | ----------------------------------------------------------

| |  | Improve equipment control capabilities;
| | - | ---------------------------------------

| |  | Reduce the time and expense of managing a chassis fleet; and
| | - | ------------------------------------------------------------

| |  | Participate in cooperative pool net revenues.
| | - | ---------------------------------------------

By providing the
"PoolStat" service, we are able to forge closer relationships with our
customers for both short-term and long-term leasing opportunities. There are now
approximately 255,000 chassis under "PoolStat" management and we are
continuing to seek opportunities to increase its level of business. We believe
that "PoolStat" is the leading provider of chassis management tools in the
United States.

Marketing and Customers

We lease our chassis and containers to over 600 shipping and
transportation companies throughout the world, including all of the world's
20 largest international container shipping lines and major North American
railroads. The customers for our chassis are a large number of domestic
companies, many of which are domestic subsidiaries or branches of international
shipping lines to which we also lease containers. With a network of offices and
agents covering major ports in the United States, Europe and the Far East, we
have been able to supply containers in nearly all locations requested by our
customers. Our customer base is diverse. As of December 31, 2002, our top 25
customers represented approximately 71% of our consolidated net billing, with no
single customer accounting for more than 8.2%.

Credit Process

We perform detailed credit risk analysis on our customers. Our
credit policy sets different maximum exposure limits depending on our
relationship and previous experience with each customer. 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, operational history and financial
strength.

We have sought to reduce credit risk by maintaining insurance
coverage against customer insolvency and related equipment losses. Through
January 31, 2002 we maintained contingent physical damage, recovery/repatriation
and loss of revenue insurance, which provided coverage in the event of a
customer's insolvency, bankruptcy or default giving rise to our demand for
return of all of our equipment. The policy covered the cost of recovering our
equipment from the customer, including repositioning cost, damage to the
equipment and the value of equipment which could not be located or was
uneconomical to recover. It also covered a portion of the lease revenues that we
might lose as a result of the customer's default (i.e., up to 180 days of
lease payments following an occurrence under the policy). The premium rates and
deductibles for this type of insurance have increased as a result of our higher
claim experience and that of the industry. As a result, effective March 1, 2003,
we obtained a new policy covering similar occurrences for a twelve-month period.
The new coverage decreases the recoverable amount per occurrence to $9 million
as compared to $35 million in our previous policy and increases the deductible
per occurrence from $.4 million to $3 million. There can be no assurance that
this or similar coverage will be available in the future or that such insurance
will cover the entirety of any loss.

Competition

There are many companies leasing intermodal transportation
equipment with which we compete. Some of our competitors have greater financial
resources than we do, 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 rational industry and a stabilizing
pricing environment.

In addition, the containerized shipping industry, which we
service, competes with providers of alternative methods of transporting goods,
such as by air, truck and rail. We believe that in most instances these
alternative methods are not as cost-effective as the shipping of containerized
cargo.

Because rental rates for chassis and containers are not subject
to regulation by any government authority but are determined principally by the
demand for and supply of equipment in each geographical area, price is one of
the principal methods by which we compete. 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. We attempt to design lease packages tailored to the requirements of
individual customers and consider our long-term relationships with customers to
be important to our ability to compete effectively. We also compete on the basis
of our ability to deliver equipment in a timely manner in accordance with
customer requirements.

Relationship with CAI

We own a 50% common equity interest in CAI, which we acquired in
April 1998. CAI owns and leases its own fleet of containers and also manages,
for a fee, containers owned by us and by third parties. We pay CAI a fee for
managing our equipment and leasing it on our behalf based on the net operating
income of CAI's fleet of owned, leased and managed containers and the
portion of CAI's fleet that consists of our equipment. We entered into our
operating relationship with CAI primarily to facilitate the leasing in the
short-term market of containers coming off long-term lease, to gain access to
new companies looking to lease containers on a long term basis and to realize
cost efficiencies from the operation of a coordinated container lease marketing
group. The marketing group, which is organized as a wholly-owned subsidiary of
Interpool, is responsible for soliciting container lease business for both
Interpool and CAI, including long-term and direct finance lease business and
short-term lease business on master lease agreements. We have a right to
purchase long-term and direct finance lease business generated by CAI, subject
to offering to CAI, at cost, 10% of this long-term and direct finance lease
business. Recently, by mutual agreement, CAI has retained most of the long-term
and direct finance lease business it has written. In addition, on occasion, we
have entered into transactions with CAI pursuant to which we have acquired
equipment, and the related leases, from CAI on terms that resulted in a profit
for CAI.

The 50% equity interest in CAI not held by us is owned by
CAI's chief executive officer. Under the terms of a Shareholder Agreement
we entered into in 1998 with CAI's chief executive officer, because an
initial public offering for the registration and sale of CAI's common stock
was not initiated before April 2003, CAI's chief executive officer has the
right to request an independent valuation of CAI. An independent valuation of
CAI has not been requested. If such an independent valuation of CAI were to be
requested, we would have the right, following the completion of such valuation,
to make a written offer to acquire the chief executive officer's 50% equity
interest in CAI for an amount equal to 50% of the fair value of CAI as indicated
in the appraisal. If we do not elect to make such an offer, CAI's chief
executive officer would have a right to require CAI to take the necessary steps
to effect an initial public offering to sell his equity. All costs associated
with any such initial public offering of CAI would be borne by CAI.

In connection with the acquisition of our 50% equity interest in
CAI in 1998, we loaned CAI $33.7 million under a subordinated note agreement,
which is collateralized by all containers owned by CAI as of April 30, 1998 or
thereafter acquired, subject to the priority security interest lien of
CAI's senior credit facility, except for certain excluded collateral.
Interest on this subordinated note is payable quarterly at a fixed rate. The
original repayment terms required mandatory quarterly principal payments of $1.7
million beginning July 30, 2003 through April 30, 2008. The subordinated note
was subject to certain financial covenants and was cross-defaulted with
CAI's senior credit facility, subject to the terms of a subordination
agreement.

On June 27, 2002, CAI entered into an amended $110 million
senior revolving credit agreement with a group of financial institutions. To
facilitate the closing of this new credit facility, we agreed to extend the
repayment terms of our subordinated note so as to require mandatory quarterly
principal payments of $1.7 million beginning July 30, 2006 through April 30,
2011. We also agreed to modify certain financial covenants in the subordinated
note. Interest on the subordinated note continues to accrue at an annual fixed
rate of 10.5%, payable quarterly. The subordinated note continues to be
cross-defaulted with CAI's senior credit agreement, subject to the terms of
an amended and restated subordination agreement. In connection with these
modifications, CAI's chief executive officer agreed that we would have the
right to designate a majority of the members of CAI's board of directors.
As a result of these transactions and gaining a majority position on CAI's
board, our financial statements include CAI as a consolidated subsidiary
commencing June 27, 2002.

For additional information about CAI's indebtedness, see
Note 15 to the Consolidated Financial Statements.

Other Business Operations

In addition to our chassis and container leasing operations we
also receive revenues from the leasing of approximately 475 freight rail cars to
railroad companies through our Illinois based Railpool division. Also, our
former computer leasing segment consisted of two majority owned subsidiaries,
Microtech Leasing Corporation ("Microtech") and Personal Computer Rental
Corporation ("PCR"). During the third quarter of 2001, we adopted a plan to exit
this segment. As part of this plan, we acquired the portion of the ownership
interest in Microtech that we did not already own and took steps to terminate
Microtech's operations in late 2001. Also, in December 2001 we sold our
ownership stake in PCR to a new company formed by certain former employees of
PCR. The consideration for the sale, totaling $3.2 million, consisted of $.6
million in cash and a $2.6 million non-recourse promissory note issued by the
buyer. In addition, we agreed to guarantee repayment by the buyer of $8.0
million of borrowings from its bank lenders. One of these guarantees, for $3.0
million of borrowings, was released effective December 31, 2001 by one of these
bank lenders, Yardville National Bank, and was replaced by personal guarantees
in the same amount from two of our principal stockholders or their affiliates.
In connection with the sale of PCR, we entered into consulting and bonus
contracts with two officers of PCR. In addition, our subsidiary Microtech had
lease and other receivables in the amount of $1.4 million due from PCR at
December 31, 2001.

During 2002, PCR experienced liquidity problems, and we took
steps to assist PCR, such as by purchasing receivables of PCR and by arranging
advances to PCR from The Ivy Group, a partnership controlled by several of our
principal stockholders or their affiliates. PCR ultimately became insolvent and
was liquidated during 2003. We have recorded our obligations relating to PCR's
liquidation in the fourth quarter of 2002. As discussed elsewhere in this
report, the computer leasing segment was originally reported under discontinued
operation and sale accounting principles, but we subsequently determined that
restatement would be necessary because the termination of Microtech's operations
and legal sale of PCR did not qualify for discontinued operation or sale
accounting treatment.

(See Note 2 Restatement of Previously Issued Financial
Statements  "Elimination of Discontinued Operations Classification and
Gain on Sale of PCR" to the Consolidated Financial Statements for further
explanation regarding the accounting treatment of PCR and Microtech.)

Employees

As of December 31, 2002, we had 192 employees, 172 of whom are
based in the United States, excluding CAI's 53 employees and the computer
leasing segment currently being liquidated. None of our employees is covered by
a collective bargaining agreement. We believe our relationships with our
employees are good.

Risk Factors

Investors in Interpool should consider the following risk
factors as well as the other information contained herein.

We are subject to the cyclicality of world trade which may
impair demand for our chassis and containers.

The demand for our chassis and containers primarily depends upon
levels of world trade of finished goods and component parts. Recessionary
business cycles, political conditions, the status of trade agreements and
international conflicts may have an impact on our operating results. The demand
for leased chassis also depends upon domestic economic conditions and volumes of
exports to the United States which are likely to be adversely affected if the
value of the United States dollar declines. When the volume of world trade
decreases, our business of leasing chassis and containers may be adversely
affected as the demand for chassis and containers is reduced. A substantial
decline in world trade may also adversely affect our customers, leading to
possible defaults and the return of equipment prior to the end of a lease term.

We operate in a highly competitive industry, which may
adversely affect our results of operations or ability to expand our
business.

The transportation equipment leasing industry is highly
competitive. We compete with numerous domestic and foreign leasing companies,
some of which have greater financial resources and access to capital than we do.
Some of our competitors have large underutilized inventories of chassis and
containers, which could lead to significant downward pressure on pricing and
margins. In addition, if the available supply of intermodal transportation
equipment were to increase significantly as a result of, among other factors,
new companies entering the business of leasing and selling intermodal
transportation equipment, our competitive position could be adversely affected.

Potential customers may decide to buy rather than lease
chassis and containers.

We, like other suppliers of leased chassis and containers, are
dependent upon decisions by shipping lines and other transportation companies to
lease rather than buy their equipment. In addition, our ability to achieve our
strategy of expanding our business in response to customer demand for long term
leasing would be adversely affected if our customers shifted to more short-term
leasing over long-term leasing. Most of the factors affecting the decisions of
our customers are outside our control. Operating costs such as storage and
repair and maintenance costs also increase as utilization decreases.

Pending governmental investigations may adversely affect
us.

Following our announcement in July 2003 that our Audit Committee
had commissioned an internal investigation by special counsel into our
accounting, we were notified that the SEC had opened an informal investigation
of Interpool. As we anticipated, this investigation was subsequently converted
to a formal investigation and remains pending as of the date of this report. The
New York office of the SEC has received a copy of the written report of the
internal investigation and has issued subpoenas requesting documents and
information from us, our Audit Committee and certain other parties. We have also
been advised that the United States Attorney's office for the District of New
Jersey has received a copy of the written report of the internal investigation
and has opened a parallel investigation focusing on certain matters described in
the report by the Audit Committee's special counsel. We have been informed that
Interpool is neither a subject nor a target of the investigation by the U.S.
Attorney's office. We are fully cooperating with both of these investigations.
We cannot predict the final outcome of these investigations and accordingly
cannot be assured that they will not result in the taking of actions adverse to
us.

Our limited ability to consummate financings in 2003 has
reduced our liquidity and impaired our ability to pay our manufacturers.

We have usually funded a significant portion of the purchase
price for new containers and chassis through borrowings under our revolving
credit agreement and other lines of credit or through secured financings with
the financial institutions with which we have relationships. However, while we
have successfully completed several significant financings during 2003, our
ability to borrow funds on favorable terms has been severely limited since March
31, 2003 because of the restatement to our historical financial statements, the
related Audit Committee and SEC investigations and the delay in completing our
audited 2002 financial statements and the filing of our Annual Report on Form
10-K for 2002. Our reduced ability to borrow funds on favorable terms has
required us to reduce the level of new business we have written with customers.
In addition, although we have in the past paid our equipment manufacturers for
our acquisitions of containers and chassis within normal trade terms (generally
60-90 days), in recent months we have generally not made payments on this
schedule because of the limited availability of new financings. As of December
22, 2003, the total amount we owed to these manufacturers for equipment already
delivered (most of which has been placed into service in our fleet) or committed
to purchase was approximately $120.5 million. We advised our manufacturers that
we intended to satisfy a total of $54.0 million of these outstanding obligations
in December 2003, with the remaining balances to be paid in January or February
2004. Our manufacturers have consented to this payment schedule. We have made
the payments due in December 2003 to these manufacturers. We may seek further
deferrals from these manufacturers.

We currently intend to fund our remaining payment obligations to
these manufacturers with proceeds from one or more financings that are currently
in process. None of these financings is assured and each of them remains subject
to documentation and other customary closing conditions before it would be
consummated. We may also elect to fund a portion of our remaining obligations to
these manufacturers through use of our available cash (subject to obtaining
approval from certain lenders).

In the event that we are unable to promptly consummate one or
more financings of at least $50 million, our available cash resources would
likely not be sufficient to make the remaining payments that may be required by
our manufacturers, and one or more of these manufacturers could take action
against us. These actions could be very disruptive to our business and might
include the commencement of legal proceedings (either in the United States or in
another country), exercising offset rights with respect to lease payments due
from lessees under common ownership or otherwise affiliated with the
manufacturer, directing lessees of equipment not yet paid for to make their
lease payments to the manufacturer, or seeking to take possession of equipment
sold to us for which payment had not been made. Even without any such action
being taken, our future relationships with these manufacturers could be
adversely affected by our continued non-payment beyond February 2004. In
addition, the taking of such action by one or more manufacturers, or the
possibility that such action could be taken based upon our failure to satisfy
our payment obligations to these manufacturers, may prompt one or more of our
other lenders to claim that a cross-default has occurred under the provisions of
such lender's debt instruments and to attempt to declare the obligations due to
such lender immediately due and payable. If at that time we were to be unable to
pay these obligations in full or obtain deferrals from, or otherwise satisfy,
the manufacturers, such a lender might attempt to exercise its rights as a
secured creditor with respect to its collateral or take other action against us.
If any of these circumstances were to occur, we might not be able to meet our
obligations to our lenders and other creditors and might not be able to prevent
such parties from taking actions that could jeopardize our ability to continue
to operate our business.

We may need to obtain additional waivers from our financial
institutions if we cannot complete and file our delinquent SEC reports promptly
or if we are unable to file our 2004 SEC reports on a timely basis. In addition,
we cannot ensure that the existing waivers we have obtained will remain in
effect.

Because our financial restatement and re-audits, as well as the
completion of the internal investigations by special counsel to our Audit
Committee, prevented the timely completion of our financial statements and
Annual Report on Form 10-K for the year ended December 31, 2002 and our
financial statements and Quarterly Reports on Form 10-Q for interim periods in
2003, we requested and received necessary waivers under our debt agreements.
Most of these waivers, as currently in effect, waive any default resulting from
the late preparation and filing with the SEC of our financial statements and
required periodic reports for 2002 and the first three quarters of 2003,
provided that our Annual Report on Form 10-K is filed with the SEC by January 9,
2004, and our Quarterly Reports on Form 10-Q for the first three quarters of
2003 are filed with the SEC by January 31, 2004, February 29, 2004, and March
31, 2004, respectively. Although we hope that we will be able to complete and
file our Quarterly Reports on Form 10-Q for 2003 by the applicable dates, we
cannot provide assurance that we will meet these deadlines. If we were to be
unable to meet these deadlines, we would need to request additional waivers from
certain of our financial institutions. In addition, we have not requested or
received any waivers with respect to our Annual Report on Form 10-K for the year
ended December 31, 2003, or our quarterly reports for 2004. We anticipate
requesting such waivers prior to March 31, 2004. In the event that any
additional waiver is required and cannot be obtained before the applicable
deadline, we might be in violation of the terms of the applicable indebtedness,
and the lender could exercise its right to declare us in default, accelerate the
indebtedness owed to such lender, and take other action against us. Moreover,
the taking of any such action, or the possibility that such action could be
taken, could cause one or more of our other financial institutions to take
action against us.

Several of the waivers we received from our financial
institutions during 2003 provide by their terms that the waiver is void if
certain events occur, such as a declaration of default by one or more of our
other lenders, or the commencement of civil or criminal proceedings against us
or any adverse action by the SEC or the New York Stock Exchange, if such action
has a material adverse effect upon our ability to perform our contractual
obligations. Although we do not believe that any of these actions has occurred
to date, there can be no assurance that they will not occur in the future. In
addition, several of the waivers we have obtained are contingent upon a
determination by the applicable lender that the changes resulting from our
financial restatement to our historical financial statements for 2001 and 2000
and the first nine months of 2002 do not represent a material change to our
financial condition for these periods as originally reported. While the
restatement was necessary, we believe that our revised financial statements do
not represent such a material change, but we cannot assure that our lenders
would reach a similar conclusion. In the event any of our existing waivers
ceased to be effective by its terms, we could be deemed to be in violation of
the terms of the indebtedness to which the waiver relates. In this event of any
such default under the terms of our indebtedness, one or more of our lenders
could exercise their right to declare us in default, accelerate the indebtedness
owed to such lender, and take other actions against us, such as attempting to
exercise rights as a secured creditor with respect to any collateral. If any of
these circumstances were to occur, we might not be able to meet our obligations
to our lenders and other creditors and might not be able to prevent such parties
from taking actions that could jeopardize our ability to continue to operate our
business.

Our internal controls and procedures may not be
adequate.

As a result of our efforts to evaluate weaknesses in the design
and effectiveness of our internal controls for the years ended December 31,
2002, 2001 and 2000, we concluded that certain internal control deficiencies
which we identified constituted "material weaknesses" or "significant
deficiencies" as defined under the standards established by the American
Institute of Certified Public Accountants. These deficiencies fall into nine
categories: deficiencies related to the accounting for direct finance leases,
deficiencies related to ineffective policies for complex transactions,
deficiencies related to inadequate communication of complex transactions,
deficiencies related to the lack of adequate staffing within the accounting
department, deficiencies related to accounting for income taxes, deficiencies
related to communication of information regarding related-party transactions,
deficiencies related to the security of information technology, deficiencies
related to accounting for inter-company eliminations and deficiencies related to
recordkeeping by various internal departments. We have assigned the highest
priority to the short and long-term correction of the internal control
deficiencies that have been identified. We have taken and are continuing to take
remedial measures to strengthen our internal controls and to address their
deficiencies. We believe that these efforts have addressed the material
weaknesses and significant deficiencies that have affected our internal controls
for the years ended 2002, 2001 and 2000. As of the date of this filing, we are
satisfied that actions implemented to date and those in progress will correct
the material weaknesses in our internal controls and information systems and
that our processes and systems of internal controls will be adequate. However,
we cannot give any assurances that all material weaknesses and significant
deficiencies have been entirely corrected or that internal control weaknesses
will not be identified from time to time in the future. Any internal control
weakness could materially affect our financial results.

Our insurance carriers are disputing our claim for payment
under our insurance coverage for lessee defaults and have commenced litigation
seeking rescission of the insurance policies. The outcome of this litigation may
be adverse to us.

In February 2001, we demanded return of all our equipment on
lease to a significant customer based in South Korea. The lessee subsequently
commenced insolvency proceedings and did not return our equipment. At the time
of this insolvency, we maintained insurance coverage against such lessee
defaults, and we submitted a claim to our insurance carriers seeking to recover
the value of the receivables owed by the customer (to the extent covered by the
insurance policies). Our claim includes per diem rental charges for up to 180
days after the default date for equipment not returned by the lessee, as well as
loss, damage and recovery costs relating to the equipment on lease that are also
billable to the lessee in accordance with the lease. We have filed an insurance
claim in excess of the policy's maximum coverage of $34.6 million, net of a $.4
million deductible under the insurance policy. The supporting documentation for
our claim has been provided to an adjuster appointed by the insurance
underwriters. As of December 31, 2002, the outstanding receivable recorded from
the insurance carrier is $19.6 million. The difference between the receivable
recorded due from the insurance carrier and the claim submitted primarily
relates to per diem revenues, repairs and maintenance and other costs billable
to the lessee (and covered by the insurance contract) that are in excess of
costs incurred. Upon collection of the receivable from the insurance carriers,
any amounts in excess of or less than the receivable recorded would be recorded
as other (income)/expense, net in the Consolidated Statements of Income. For
further explanation, see Note 2 Restatement of Previously Issued Financial
Statements  "Accounting For Insurance Claims" to the Consolidated
Financial Statements.

On December 26, 2002, our insurance underwriters commenced a
declaratory judgment action against us in the United States District Court for
the Southern District of New York seeking rescission of our customer default
insurance coverage or, in the alternative, a declaration that the premiums paid
by us for this insurance were inadequate. The insurance underwriters' primary
contention is that we did not fully disclose to them all material information
concerning our South Korean lessee. The underwriters also dispute the timing of
our notifications to them of this loss and the amount of the loss. We have filed
a response to this complaint. We intend to vigorously pursue our claim for
recovery under our insurance policies and believe that we have strong claims
under the policies and defenses to the arguments asserted by the insurance
underwriters. It is impossible to predict the ultimate outcome of this
proceeding, in view of the uncertainties inherent in any litigation. As the
litigation progresses, reserves for the impairment of the asset values on our
balance sheet may become necessary.

Our insurance coverage, which reduces our exposure to credit
risk, expires in March 2004. Failure to replace such coverage could increase our
costs in the event a customer defaults.

We have in the past sought to reduce our credit risk by
maintaining insurance coverage against lessee defaults. Our current insurance
policy covering such credit risks will expire on March 31, 2004. We do not know
whether replacement coverage can be obtained upon terms acceptable to us. Even
if replacement coverage is obtainable we expect that premium rates and
deductibles will increase as a result of general rate increases for this type of
insurance as well as our historical claim experience and that of our competitors
in the industry. If such insurance coverage is not obtained, it could adversely
affect our business by increasing our risks and our costs in the event a
customer defaults.

Sustained Asian economic instability could reduce demand for
leasing.

A number of the shipping lines to which we lease containers are
entities domiciled in several Asian countries. In addition, many of our
customers are substantially dependent upon shipments of goods exported from
Asia. From time to time, there have been economic disruptions, financial turmoil
and political instability in this region. If similar events were to occur in the
future, they could adversely affect these customers and lead to a reduced demand
for leasing of our containers or otherwise adversely affect us.

Defaults by our customers could adversely affect our business
by decreasing revenues and increasing storage, collection and recovery
expenses.

We are dependent upon our lessees continuing to make lease
payments for our equipment. A default by a lessee may cause us to lose revenues
for past services and incur expenses for storage, collection and recovery.
Repossession from defaulting lessees may be difficult and more expensive in
jurisdictions whose laws do not confer the same security interests and rights to
creditors and lessors as those in the United States and in jurisdictions where
recovery of equipment from the defaulting lessees is more cumbersome.

If a long-term lessee defaults, we may be unable to re-lease
recovered equipment for comparable rates or terms. Our reserves for anticipated
losses may increase over historical levels or not be sufficient to cover actual
losses, or our earnings may be adversely affected by customer defaults.

Changes in market price, availability or transportation costs
of containers in China could adversely affect our ability to maintain our supply
of containers.

Changes in the political, economic or financial condition of
China, which would increase the market price, availability or transportation
costs of containers, could adversely affect our ability to maintain our supply
of containers. China is currently the largest container producing nation in the
world and we currently purchase substantially all of our containers from
manufacturers in China. In the event that it were to become more expensive for
us to procure containers in China or to transport these containers at a low cost
from China to the locations where they are needed by customers, because of a
shift in U.S. trade policy toward China, increased tariffs imposed by the United
States or other governments, a significant downturn in the political, economic
or financial condition of China, or for any other reason, we would have to seek
alternative sources of supply. We may not be able to make alternative
arrangements quickly enough to meet our equipment needs, and the alternative
arrangements may increase our costs.

We are controlled by a limited number of stockholders; this
concentrated ownership could discourage acquisition bids for us that are not
supported by our majority stockholders or limit the price investors will be
willing to pay in the future for shares of our common stock.

Approximately 70.2% of our common stock is beneficially owned,
directly or indirectly, in the aggregate by Martin Tuchman, Warren L. Serenbetz,
Raoul J. Witteveen and Arthur L. Burns, together with certain members of their
immediate families and certain related entities. Each of Messrs. Tuchman,
Serenbetz and Burns is a member of our Board of Directors and Mr. Tuchman and
Mr. Burns are executive officers. Mr. Witteveen is a former director and
executive officer. These individuals, either directly or indirectly, have the
ability to elect all of the members of our Board of Directors and to control the
outcome of all matters submitted to a vote of our stockholders. Our concentrated
ownership may discourage acquisition bids for us that are not supported by our
majority stockholders. This concentration of ownership could limit the price
that investors might be willing to pay in the future for shares of our common
stock.

We have relationships with and have entered into transactions
with members of our management and affiliated entities that may involve inherent
conflicts of interest.

Various relationships exist and various transactions have been
entered into between or among us, on the one hand, and members of our management
and affiliated entities, on the other hand. Some of these relationships and
transactions may involve inherent conflicts of interest. (See Item 13,
"Certain Relationships and Related Transactions" for more information.)

We are dependent on the knowledge and experience of members
of our senior management; loss of these members could adversely affect our
ability to formulate and achieve our strategy and pursue new business
initiatives.

Our growth and continued profitability are dependent upon, among
other factors, the abilities, experience and continued service of certain
members of our senior management, including Martin Tuchman, our Chairman and
Chief Executive Officer. Mr. Tuchman holds, either directly or indirectly, a
substantial equity interest in Interpool and also is a director of Interpool.
Additionally, other members of our senior management possess knowledge of, and
extensive experience in, the intermodal transportation industry. We rely on this
knowledge and experience in our strategic planning and in our day-to-day
business operations. If one or more members of our senior management were to
resign or otherwise be unavailable to serve us, the loss could adversely affect
our ability to formulate and achieve our strategy and pursue new business
initiatives. In addition, we do not currently have employment agreements with
several of our executive officers.

We previously relied in part on the knowledge and experience of
Raoul J. Witteveen, our former President and Chief Operating Officer, and
Mitchell Gordon, our former Executive Vice President and Chief Financial
Officer, each of whom was a member of our Board of Directors. Mr. Witteveen and
Mr. Gordon separately resigned as executive officers and directors during 2003. Although we
have an experienced management team, the loss of these individuals may adversely
affect our ability to continue to achieve our business strategy and to pursue
new business initiatives.

The volatility of the residual value of chassis and
containers upon expiration of their leases could adversely affect our operating
results.

Although our operating results primarily depend upon equipment
leasing, our profitability is also affected by the residual values (either for
sale or continued operation) of our chassis and containers upon expiration of
their leases. These values, which can vary substantially, depend upon, among
other factors,

| |  | The maintenance standards observed by lessees;
| | - | ----------------------------------------------

| |  | The need for refurbishment;
| | - | ---------------------------

| |  | Our ability to remarket equipment;
| | - | ----------------------------------

| |  | The cost of comparable new equipment;
| | - | -------------------------------------

| |  | The availability of used equipment;
| | - | -----------------------------------

| |  | Rates of inflation;
| | - | -------------------

| |  | Market conditions;
| | - | ------------------

| |  | The costs of materials and labor; and
| | - | -------------------------------------

| |  | The obsolescence of the equipment.
| | - | ----------------------------------

Most of these factors are outside of our control. Operating
leases, which represent the predominant form of lease in our portfolio, are
subject to greater residual risk than direct finance leases.

Loss of our eligibility for tax benefits under the
U.S.-Barbados tax treaty could increase our tax liability.

We currently receive tax benefits under an income tax convention
between the United States and Barbados, the jurisdiction in which our subsidiary
Interpool Limited, operates our container business, is incorporated.
Specifically, under that income 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. At some future date the tax
convention could be modified in a manner adverse to us or repealed in its
entirety, or we might not continue to be eligible for these tax benefits.

As a company resident in Barbados, Interpool Limited is required
to file tax returns in Barbados and pay any tax liability to Barbados. However,
no Barbados tax returns have been prepared or filed for Interpool Limited for
any period subsequent to its 1997 tax year, because such tax returns are
required to be accompanied by audited financial statements for Interpool
Limited, which are not available. We believe that the failure to file these
returns has not resulted in any underpayment of taxes, interest or penalties
(other than a nominal late filing penalty recently enacted in Barbados), because
we believe that no Barbados taxes would have been due for the years for which
returns have not been filed. We further believe that Interpool Limited's failure
to file these returns would not present any other material risk to Interpool.
Nonetheless, we intend to have the necessary Interpool Limited financial
statements prepared and audited as promptly as practicable so that Interpool
Limited's Barbados tax returns can be filed as required. We cannot be assured
that our failure to file these returns would not adversely affect us.

A substantial portion of our future cash flows will be needed
to service our indebtedness. Also, because our debt has been downgraded
recently, our cost of borrowing has increased and our access to future financing
may be more limited.

Historically, we have made, and continue to make, use of
indebtedness to finance our equipment leasing activities and for other general
corporate purposes. As of December 31, 2003, our total outstanding indebtedness
was approximately $1,683.5 million (including $66.5 million due to certain
equipment manufacturers to whom we have not paid amounts due in accordance with
our normal trade terms). We anticipate that we will incur additional
indebtedness in the future. We are required to dedicate a substantial portion of
our cash flow to payments on our indebtedness, thereby reducing the amount of
cash flow available to fund working capital, capital expenditures, including for
fleet growth, and other corporate requirements. Should our cash flow be
insufficient to service our debt obligations, we would be required to seek
additional funds to meet our obligations. Additional funds, if needed, might not
be available to us or, if available, might not be made available on terms
acceptable to us.

Our business is highly dependent upon the availability of
capital. In particular, the growth of our fleet through new equipment purchases
or acquisitions, as well as the refinancing of our existing debt, will require
further debt or equity financings. We may not have sufficient unencumbered
assets to pledge as security for new indebtedness. If we raise additional funds
by issuing equity securities, further dilution to the existing stockholders may
result.

During October and November, 2003, the ratings on our debt
securities were downgraded by three major rating agencies, Standard &
Poor's, Fitch, and Moody's, citing the resignation of our President, continued
delay in issuing audited restated financial statements for 2000 and 2001 and our
audited financial statements for 2002 to be included in our 2002 Annual Report
on Form 10-K, and the need to obtain waivers from our lending group for
technical defaults under our loan agreements associated with the financial
statement delays. Our debt securities were again downgraded by all three rating
agencies following our press release on December 29, 2003, that indicated that
release of our 2000, 2001 and 2002 financial statements and the filing of our
2002 Annual Report on Form 10-K would again be delayed. Such downgrades may have
a negative effect on our ability to access the capital markets in the future, as
well as on our interest costs.

The price of our common stock may fluctuate.

The market price for our common stock has fluctuated in the
past, and several factors could cause the price to fluctuate substantially in
the future. These factors include:

| |  | Announcements of developments related to our business;
| | - | ------------------------------------------------------

| |  | Fluctuations in our quarterly results of operations;
| | - | ----------------------------------------------------

| |  | Sales of substantial amounts of our shares into the
marketplace;
| | - | ----------------------------------------------------------------

| |  | General conditions in our industry or the worldwide
economy;
| | - | ------------------------------------------------------------

| |  | A shortfall in revenues or earnings compared to securities
analysts' expectations;
| | - | ----------------------------------------------------------------------------------

| |  | Changes in analysts' recommendations or projections;
| | - | ----------------------------------------------------

| |  | Announcements of new acquisitions; and
| | - | --------------------------------------

| |  | An outbreak of war or hostilities.
| | - | ----------------------------------

Although our common stock is listed on The New York Stock
Exchange, the Exchange suspended trading in our common stock and other listed
securities on December 29, 2003 and informed us that delisting proceedings will
be commenced. The Exchange stated that this action was taken because of the
delay in filing of our Annual Report on Form 10-K for 2002 and the uncertainty
surrounding our restatement. Although we will appeal this decision and hope that
trading on the New York Stock Exchange will resume after this report is filed
with the Securities and Exchange Commission, we cannot give any assurance that
trading in our securities will resume on the New York Stock Exchange. Since this
suspension took effect, our common stock has been traded on the over-the-counter
market under the symbol IPLI. Information regarding bid and asked prices may be
obtained from the web site maintained by pinksheets.com.

The current market price of our common stock may not be
indicative of future market prices.

Our charter documents and Delaware law may inhibit a takeover
and limit our growth opportunities, which could cause the market price of our
shares to decline.

Our Restated Certificate of Incorporation and Amended and
Restated By-laws, as well as Delaware corporate law, contain provisions that
could delay or prevent a change of control or changes in our management that a
stockholder might consider favorable. These provisions apply even if the change
may be considered beneficial by some stockholders. If a change of control or
change in management is delayed or prevented, the market price of our shares
could decline. In addition, our Restated Certificate of Incorporation and
Amended and Restated By-laws contain provisions that may discourage acquisition
bids for Interpool.

Website Access

Our website address is www.interpool.com. You may obtain free
electronic copies of our Annual Reports on Form 10-K, quarterly reports on Form
10-Q, current reports on Form 8-K, and all amendments to those reports under the
heading "Financial Information." These reports are available on our website as
soon as reasonably practicable after we electronically file them with the SEC.

ITEM 2.  PROPERTIES

In connection with our
acquisition of Transamerica's North American Intermodal Division in October
2000, we purchased real property located in Chicago, Illinois and Atlanta,
Georgia. The purchase price for these two properties was included in the
acquisition's aggregate purchase price. The Atlanta site was sold on July
31, 2001. The Chicago site was sold in April 2002.

In May 2002, we purchased an office building located at 211
College Road East, Princeton, New Jersey which houses our principal executive
offices. The property was purchased from 211 College Road Associates, a New
Jersey general partnership in which our chief executive officer and one of our
other directors together hold 89.73% of the partnership interests. We had
previously leased approximately 28,500 square feet in this building at an annual
rent of $.6 million under a triple net lease with 211 College Road Associates.
The purchase price we paid for the 39,000 square foot building was $6.3 million,
based upon a determination of the fair market value of the property by an
independent property appraisal firm. The purchase price and other terms of the
purchase were approved by our Board of Directors. (See "Certain Relationships
and Related Transactions" and Note 14 to the Consolidated Financial
Statements for further information regarding this transaction.)

We own approximately 18,000 square feet of condominium office
space located on the 27th floor at 633 Third Avenue, New York, NY 10017 that
serves as our New York office. All of our other commercial office space is
leased.

ITEM 3.  LEGAL PROCEEDINGS

In February 2001, we demanded return of all our equipment on
lease to a significant customer based in South Korea. The lessee subsequently
commenced insolvency proceedings and did not return our equipment. At the time
of this insolvency, we maintained insurance coverage against such lessee
defaults, and we submitted a claim to our insurance carriers seeking to recover
the value of the receivables owed by the customer (to the extent covered by the
insurance policies). Our claim includes per diem rental charges for up to one
hundred and eighty days after the default date for equipment not returned by the
lessee as well as loss, damage and recovery costs relating to the equipment on
lease that are also billable to the lessee in accordance with the lease. The
maximum insurance coverage related to this claim is $34.6 million, net of a $.4
million deductible under the insurance policy.

We provided the supporting documentation for our claim to an
adjuster appointed by the insurance underwriters. Based upon discussions with
the adjuster, the analysis of the supporting documentation is complete and a
report of the adjuster's findings was submitted to the underwriters in November
2002.

On December 26, 2002, our insurance underwriters commenced a
declaratory judgment action against us in the United States District Court for
the Southern District of New York seeking rescission of our customer default
insurance coverage or, in the alternative, a declaration that the premiums paid
by us for this insurance were inadequate. The insurance underwriters' primary
contention is that we did not fully disclose to them all material information
concerning our South Korean lessee. The underwriters also dispute the timing of
our notifications to them of this loss and the amount of the loss. We have filed
a response to this complaint. We intend to vigorously pursue our claim for
recovery under our insurance policies and believe that we have strong claims
under the policies and defenses to the arguments asserted by the insurance
underwriters. Although it is impossible to give assurances as to the ultimate
outcome of this proceeding in view of the uncertainties inherent in any
litigation, based upon the progress of this case to date and the merits of our
position, and after consultation with external counsel, we believe that the
facts as they have been developed through discovery, and the applicable law,
should entitle us to a recovery in the full amount of our claim. We will
continue to monitor the progress and development of this litigation. As the
litigation progresses, we will continue to evaluate the prospects for full
recovery on our insurance claim, and reserves for the impairment of the asset
values may become necessary.

For additional information about this claim, see Management's
Discussion and Analysis of Financial Condition and Results of Operations 
"Insurance Claim."

Following our announcement in July 2003 that our Audit Committee
had commissioned an internal investigation by special counsel into our
accounting, we were notified that the SEC had opened an informal investigation
of Interpool. As we anticipated, this investigation was subsequently converted
to a formal investigation and remains pending as of the date this report was
filed with the SEC. The New York office of the SEC has received a copy of the
written report of the internal investigation and has issued subpoenas requesting
documents and information from us, our Audit Committee and certain other
parties. We have also been advised that the United States Attorney's office for
the District of New Jersey has received a copy of the written report of the
internal investigation and has opened a parallel investigation focusing on
certain matters described in the report by the Audit Committee's special
counsel. We have been informed that Interpool is neither a subject nor a target
of the investigation by the U.S. Attorney's office. We are cooperating fully
with both of these investigations.

We are engaged in various other legal proceedings from time to
time incidental to the conduct of our business. Such proceedings may relate to
claims arising out of chassis accidents that occur from time to time which
involve death and injury to persons and damage to property. Accordingly, we
require all of our lessees to indemnify us against any losses arising out of
such accidents while the chassis are on-hire to the lessees. In addition,
lessees are generally required to maintain a minimum of $2 million in general
liability insurance coverage which is standard in the industry. In addition, we
maintain a back-up general liability policy of $200 million, in the event that
the above lessee coverage is insufficient. While we believe that such coverage
should be adequate to cover current claims, there can be no guarantee that
future claims will not exceed such amounts. Nevertheless, we believe that no
current asserted or unasserted claims of which we are aware will have a material
adverse effect on our financial condition or results of operations and that we
are adequately insured against such claims.

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

There were no matters submitted to a vote of security holders
through a solicitation of proxies during the fourth quarter of fiscal 2002.

PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS

Until December 26, 2003, our common stock was traded on the New
York Stock Exchange under the symbol "IPX". The following table sets forth for
the periods indicated commencing on January 1, 2000, the high and low closing
sale prices for the common stock on the New York Stock Exchange. All share and
per share data have been rounded to the nearest cent.

`HIGH          LOW
                                                                 ----          ----
      Calendar Year 2000
        First Quarter.....................................       $8.00        $5.75
        Second Quarter....................................        9.75         5.50
        Third Quarter.....................................       13.31         8.50
        Fourth Quarter....................................       17.50        11.63
      Calendar Year 2001
        First Quarter.....................................      $18.44       $12.56
        Second Quarter....................................       17.00        13.55
        Third Quarter.....................................       19.45        14.60
        Fourth Quarter....................................       19.25        11.65
      Calendar Year 2002
        First Quarter.....................................      $19.90       $14.61
        Second Quarter....................................       24.02        17.26
        Third Quarter.....................................       18.96        12.02
        Fourth Quarter....................................       17.32        11.49`

As of December 1, 2003, there were approximately 75 stockholders
of record of our common stock. On December 15, 2003, the last reported sale
price of the common stock on the New York Stock Exchange was $17.94 per share.

Effective December 29, 2003, due to the delay in filing our 2002
Annual Report on Form 10-K with the Securities and Exchange Commission, our
common stock and other listed securities were suspended from trading on the New
York Stock Exchange, and delisting proceedings were commenced. We will appeal
this decision. Since this suspension took effect, our common stock has been
traded on the over-the-counter market under the symbol IPLI. Information
regarding bid and asked prices may be obtained from the web site maintained by
pinksheets.com.

We paid a quarterly dividend of $0.055 per share on our common
stock in January, April, July and October of 2002 and a quarterly dividend in
the amount of $0.05 per share on our common stock in July and October 2001.
Prior to July 1, 2001, we had paid a quarterly dividend of $0.0375 per share on
our common stock for the prior 17 quarters. Effective January 2003, the
quarterly dividend rate was increased to $0.0625 per share, which was paid in
January, April, July and October of 2003 and declared on December 10, 2003 for
payment on January 15, 2004 to stockholders of record on January 2, 2004. In
connection with our delayed SEC filings and the receipt of waivers from our
lenders necessitated by the delayed filings, the members of our Board of
Directors and certain of their affiliates who own shares of our common stock
have agreed to defer their receipt of any dividend payments, including those we
may declare in the future, until we are in compliance with all SEC filing
requirements.

The Board of Directors has instituted a dividend reinvestment
plan, which went into effect at the end of 2001. The plan is non-dilutive;
shares required for the plan will be acquired on the open market by an
independent third party plan administrator and not through the issuance of
additional shares by us.

Equity Compensation Plan Information

The following presents equity compensation plan information as
of December 31, 2002. This table does not include shares issuable under the
Deferred Bonus Plan (the "Bonus Plan") as outlined in Note 19 to the
Consolidated Financial Statements. The shares issuable under the Bonus Plan with
respect to the calendar year ended December 31, 2002 were granted in January
2003 and vest in installments beginning in January 2004.

`(c)
                                                                                               Number of securities
                                                                                               remaining available for
                                              (a)                            (b)               future issuance under
                                 Number of securities to        Weighted-average               equity compensation
                                 be issued upon exercise        exercise price of              plans (excluding
                                 of outstanding options,        outstanding options,           securities reflected
Plan Category                    warrants and rights            warrants and rights            in column (a))
-------------                    -------------------            -------------------            ------------------------

Equity compensation plans
approved by security holders              4,539,001                       10.34                         1,559,999

Equity compensation plans not
approved by security holders                -----                         -----                           -----
                                          _________                   _________                       ___________
Total                                     4,539,001                       10.34                         1,559,999`

For a description of these plans see Item 10 and Note 19 to the
Consolidated Financial Statements.

ITEM 6.  SELECTED FINANCIAL DATA

The following table sets forth our selected historical
consolidated financial data, for the periods and at the dates indicated. This
information should be read in conjunction with our historical consolidated
financial statements included in this Annual Report on Form 10-K and the notes
thereto. (See Note 2 to the Consolidated Financial Statements for additional
details of the restated amounts in 2001 and 2000.)

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

`YEAR ENDED DECEMBER 31, (1)
                                                             2002 (2)      2001          2000 (3)        1999          1998
                                                             --------      ----          -------         ----          -----
INCOME STATEMENT DATA:                                                   Restated       Restated      Restated      Restated

Revenues                                                   $327,124      $338,718      $287,553       $216,063      $181,301

Income before cumulative effect of change in accounting      $4,389       $28,104       $44,040        $23,271       $37,064
principle                                                    ======       =======       =======        =======       =======

Income per share before change in accounting principle:

Basic                                                         $0.16         $1.03         $1.61          $0.84         $1.34
                                                              =====         =====         =====          =====         =====

Diluted                                                       $0.15         $0.97         $1.61          $0.82         $1.30
                                                              =====         =====         =====          =====         =====

Weighted average shares outstanding:

Basic                                                        27,360        27,417        27,421         27,571        27,561

Diluted                                                      29,202        28,973        27,426         28,234        28,615

Cash dividends declared per common share:                   $0.2275       $0.1925         $0.15          $0.15         $0.15


                                                            2002          2001           2000          1999          1998
                                                            ----          ----           ----          ----          -----
BALANCE SHEET DATA:                                                     Restated       Restated      Restated      Restated


Cash and short-term investments                            $170,613      $103,760      $157,224       $207,853      $107,226

Net investment in direct financing leases                  $334,129      $275,372      $213,180       $185,350      $358,165

Leasing equipment                                        $1,556,816    $1,334,787    $1,230,214       $846,342      $716,930

Total assets                                             $2,241,121    $1,922,229    $2,203,767     $1,442,069    $1,361,051

Debt and capital lease obligations                       $1,597,211    $1,354,680    $1,631,985       $998,228      $932,157

Stockholders' equity                                       $336,193      $351,269      $340,519       $299,411      $280,601`

|(1) | As a result of adopting Statement of Financial
Accounting Standards No. 145 ("SFAS 145") extraordinary gains related to the
retirement of debt for all years presented have been reclassified into operating
income on a pretax basis. Income before cumulative effect of change in
accounting principle include net of tax amounts of $558, $840 and $740 for years
ended December 31, 2001, 2000 and 1999, respectively.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Effective June 27, 2002, the Company's financial
statements include CAI as a consolidated subsidiary. (See Note 15 to the
Consolidated Financial Statements.)
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | The 2000 income statement data excludes $660 resulting
from the cumulative effect of change in accounting principle. The 2000 results
include contributions from the assets acquired from Transamerica ("TA"), which
we acquired on October 24, 2000, with an effective date of October 1, 2000. The
2000 results include 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.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ITEM 7.  MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
          
     OPERATIONS

The following discussion of our 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. All financial information in
this report gives effect to the restatement of our financial statements for 2001
and 2000. (Unless otherwise indicated, all fleet statistics including the
size of the fleet, utilization of the leasing equipment or the rental rates per
day that are set forth in this Annual Report on Form 10-K exclude the
information of our 50%-owned consolidated subsidiary CAI.)

The information in this Annual Report on Form 10-K contains
certain "forward-looking statements" within the meaning of the securities laws.
These forward-looking statements reflect the current view of the Company with
respect to future events and financial performance and are subject to a number
of risks and uncertainties, many of which are beyond our control. All statements
other than statements of historical facts included in this report, including the
statements under "Management's Discussion and Analysis of Financial Condition
and Results of Operations," regarding our strategy, future operations, financial
position, estimated revenues, projected costs, prospects, plans and objectives
of management are forward-looking statements. When used in this report, the
words "will," "believe," "anticipate," "intend," "estimate," "expect," "project"
and similar expressions are intended to identify forward-looking statements,
although not all forward-looking statements contain these identifying words.

All forward-looking statements speak only as of the date of this
report. We do not undertake any obligation to update or revise publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise. Although we believe that our plans, intentions and
expectations reflected in or suggested by the forward-looking statements we make
in this report are reasonable, we can give no assurance that these plans,
intentions or expectations will be achieved. Future economic and industry trends
that could potentially impact revenues and profitability are difficult to
predict.

Restatement of Previously Issued Financial Statements

In preparation for our 2002 annual audit, we determined that
several direct finance lease transactions with customers, in 2001 and 2000 had
been accounted for incorrectly in our prior financial statements. Down payments
received from these customers had been erroneously recorded as revenue when
collected rather than as a reduction to the net investment in the lease. We also
determined that our former computer leasing segment, which had been classified
as a discontinued operation in our financial statements for the first three
quarters of 2002 and for 2001 and 2000, should have been classified as part of
continuing operations because the requirements of discontinued operation
accounting treatment were not satisfied.

As a result, we determined that it would be necessary for us to
restate our financial statements for the first three quarters of 2002 and for
the years ended December 31, 2001 and 2000. Because our financial statements for
2001 and 2000 originally had been audited by Arthur Andersen LLP, which has
discontinued its auditing practice, we requested that our new auditors, KPMG
LLP, conduct audits of our restated financial statements for the years ended
December 31, 2001 and 2000, along with their audit of our financial statements
for the year ended December 31, 2002.

The Audit Committee of our Board of Directors engaged as special
counsel a law firm that had not previously represented us to conduct an internal
inquiry into the accounting errors and circumstances requiring restatement of
our previously issued 2001 and 2000 financial statements. Upon completion of
this inquiry, in July 2003 our Audit Committee decided to conduct a broader
internal investigation of our accounting and related matters and engaged another
law firm that had not previously represented us, Morrison & Foerster LLP, as
special counsel, which in turn engaged the accounting firm of Ernst & Young
LLP to assist with such investigation. This investigation was not completed
until the fourth quarter of 2003. The findings and recommendations of this
investigation, and the measures we have taken and are taking to implement these
recommendations, are detailed later in this report under Item 9A.

As a result of an extensive review by us and the re-audits
conducted by KPMG, we determined that, in addition to the accounting errors
mentioned above, certain additional items in our prior financial statements also
would require restatement, including the following:

| | (1) | Certain leases that had been accounted for as operating
leases should have been accounted for as direct finance leases. In addition,
revenue related to leases classified as finance leases had been understated;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Reserves established for residual guaranties under
certain financings were overstated;
| | --- | --------------------------------------------------------------------------------------

| | (3) | The documentation of a swap designed to hedge interest
rate fluctuations for a chassis securitization facility did not meet the
requirements of SFAS 133 and, therefore, the swap did not qualify for hedge
accounting treatment. In addition, we incorrectly applied the transition rules
for certain swaps when we adopted SFAS 133 on January 1, 2001;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (4) | Receivables related to our piggyback trailer fleet had
been overstated in 1999, 2000 and the first three months of 2001;
| | --- | ------------------------------------------------------------------------------------------------------------------------

| | (5) | Income earned on intercompany transactions with our 50%
owned subsidiary CAI had not been eliminated from the equity earnings recorded
for this subsidiary;
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------

| | (6) | Deferred tax asset valuation allowances related to the
realization of our net operating losses and other tax assets were understated;
| | --- | -------------------------------------------------------------------------------------------------------------------------------------

| | (7) | The net book value of certain containers, acquired from
an investment partnership in December 1996, was overstated;
| | --- | -------------------------------------------------------------------------------------------------------------------

| | (8) | Adjustments were required relating to certain
inter-company accounts with foreign subsidiaries that had not been reconciled at
December 31, 2000 and 2001;
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------

| | (9) | The accounting for an insurance claim for a defaulted
lease was changed, which resulted in a reduction to recorded receivables due
from the insurance carrier and, correspondingly, reduced lease revenues and
other income for certain amounts billable under the lease contract that are not
probable of collection from the lessee but which we believe are fully
collectible under the insurance contract; and
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (10) | Other adjustments were made, consisting primarily of
changes in accruals and estimates as well as reclassification of previously
recorded entries to proper periods.
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

The impact of these items on our previously issued financial
statements for 2001 and 2000 is summarized below. While the restatement was
necessary, we believe that these changes to our previously issued financial
statements do not represent a material change in our financial condition or
result in a material increase in the amount of our future obligations or our
future cash needs.

Because our financial restatement and the re-audits, as well as
the completion of the internal investigations by special counsel to our Audit
Committee, prevented the timely completion of our financial statements and
Annual Report on Form 10-K for the year ended December 31, 2002 and our
financial statements and Quarterly Reports on Form 10-Q for interim periods in
2003, we requested and received necessary waivers under our debt agreements.
Most of these waivers, as currently in effect, waive any default resulting from
the late preparation and filing with the SEC of our financial statements and
required periodic reports for 2002 and the first three quarters of 2003,
provided that our 2002 Annual Report on Form 10-K is filed with the SEC by
January 9, 2004, and our Quarterly Reports on Form 10-Q for the first three
quarters of 2003 are filed with the SEC by January 31, 2004, February 29, 2004,
and March 31, 2004, respectively. We have not requested or received waivers with
respect to our Annual Report on Form 10-K for the year ending December 31, 2003
or our Quarterly Reports on Form 10-Q for 2004, although we anticipate
requesting such waivers prior to March 31, 2004.

Following our announcement
in July 2003 that our Audit Committee had commissioned an internal investigation
by special counsel into our accounting, we were notified that the SEC had opened
an informal investigation of Interpool. As we anticipated, this investigation
was subsequently converted to a formal investigation and remains pending as of
the date of this report. The New York office of the SEC has received a copy of
the written report of the internal investigation and has issued subpoenas
requesting documents and information from our Audit Committee and certain other
parties. We have also been advised that the United States Attorney's office
for the District of New Jersey has received a copy of the written report of the
internal investigation and has opened a parallel investigation focusing on
certain matters described in the report by the Audit Committee's special
counsel, Morrison & Foerster LLP. We have been informed Interpool is not a
subject or a target of the investigation by the U.S. Attorney's office. We
are fully cooperating with both of these investigations.

Overall Impact of the Restatement

The tables below show the effect of the restatement on our
previously reported results for the years ended December 31, 2001 and 2000:

`Year Ended December 31, 2001
                                                                      ----------------------------
                                                        Income before
                                                       taxes and change                  Income        Income
                                                        in accounting        Net        Per Share     Per Share
                                                          principle        Income        (Basic)      (Diluted)
                                                          ---------        -------       -------       --------

Previously reported                                        $49,723         $42,480        $1.55         $1.47

Lease accounting                                            (1,817)         (2,023)       (0.07)        (0.07)
Residual guarantees                                          2,150           1,290         0.05          0.05
Swap accounting                                             (6,435)         (4,320)       (0.16)        (0.15)
Income on piggyback trailer fleet                              (26)            (16)       (0.00)        (0.00)
Intercompany transactions with CAI                          (1,290)         (1,121)       (0.04)        (0.04)
Reduction in carrying value of containers                       38              36         0.00          0.00
Deferred tax asset valuation                                     0            (924)       (0.03)        (0.03)
Intercompany account reconciliations                        (1,305)         (1,259)       (0.05)        (0.04)
Accounting for insurance claim                              (5,125)         (4,497)       (0.16)        (0.16)
Changes in accruals and estimates
   Bonus accrual                                              (614)           (369)       (0.01)        (0.01)
   Estimated repair costs incurred on equipment               (728)           (437)       (0.02)        (0.02)
   Other                                                       663             565         0.02          0.02
                                                      --------------------------------------------------------
Net restatements                                           (14,489)        (13,075)       (0.47)        (0.45)
                                                      --------------------------------------------------------

As restated, before reclassifications of
extraordinary items and discontinued
operations                                                  35,234          29,405         1.08          1.02

Changes in accounting for adoption of SFAS 133 in
2001                                                           ---            (833)       (0.03)        (0.03)
Elimination of discontinued operations
classification and gain on sale of PCR                      (2,660)           (468)       (0.02)        (0.02)
Adoption in 2002 of SFAS 145 on retirement of debt             930             ---         ---           ---
                                                      --------------------------------------------------------
As restated                                                $33,504         $28,104        $1.03         $0.97
                                                      ========================================================`

`Year Ended December 31, 2000
                                                                        ----------------------------
                                                      Income before
                                                     taxes and change               Income Per
                                                      in accounting                    Share      Income Per
                                                        principle      Net Income     (Basic)   Share (Diluted)
                                                        ---------      ----------     -------   ---------------

Previously reported                                      $49,975         $44,456       $1.62         $1.62

Lease accounting                                            (116)            133        0.01          0.01
Residual guarantees                                          525             315        0.01          0.01
Income on piggyback trailer fleet                         (1,448)           (869)      (0.03)        (0.03)
Intercompany transactions with CAI                          (762)           (603)      (0.02)        (0.02)
Reduction in carrying value of containers                     38              36        0.00          0.00
Deferred tax asset valuation                                   0            (584)      (0.02)        (0.02)
Intercompany account reconciliations                       1,178           1,137        0.04          0.04
Changes in accruals and estimates
   Bonus accrual                                             614             369        0.01          0.01
   Estimated repair costs incurred on equipment              340             204        0.01          0.01
   Other                                                     257             106        0.00          0.00
                                                    --------------------------------------------------------
Net restatements                                             626            244        0.01          0.01
                                                    --------------------------------------------------------

As restated, before reclassifications of
extraordinary items and discontinued
operations                                                50,601          44,700        1.63          1.63

Elimination of discontinued operations
classification                                             1,606             ---      ---           ---
Adoption in 2002 of SFAS 145 on retirement of debt         1,400             ---      ---           ---

                                                    --------------------------------------------------------
As restated                                              $53,607        $44,700       $1.63         $1.63
                                                    ========================================================`

In addition to the amounts above, we recorded a reduction of
approximately $2.0 million to retained earnings and stockholders equity at
December 31, 1999.

The cumulative effect of all of the restatements was a decrease
in retained earnings of $16.1 million and $1.7 million at December 31, 2001 and
December 31, 2000, respectively. In addition, the restatements resulted in a
decrease to accumulated comprehensive loss of $4.9 million at December 31, 2001.

While the restatement was necessary, we do not believe that the
changes to the previously issued financial statements represent a material
change in our financial condition or result in a material increase in the amount
of our obligations going forward or our future cash needs. In connection with
the completion of our internal investigation and the re-audits of our financial
statements, we have received waivers related to the timely reporting of
financial data under our debt agreements.

For further discussion of the restatement, see Note 2 to the
Consolidated Financial Statements.

General

We generate revenues through leasing transportation equipment,
primarily intermodal chassis and dry freight standard containers. Most of our
revenues are derived from payments under operating leases and from income earned
under finance leases, under which the lessee generally has the right to purchase
the equipment at the end of the lease term.

Revenue derived from an operating lease generally consists of
the total lease payment from the customer. In 2002, 2001 and 2000, revenues
derived from operating leases were $290.9 million (89% of revenues), $312.2
million (92% of revenues), and $263.7 million (92% 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 2002, 2001
and 2000, total payments from direct finance leases were $96.0 million, $91.8
million, and $100.4 million, respectively. In 2002, 2001 and 2000, the revenue
component of total lease payments totaled $36.2 million (11% of revenues), $26.5
million (8% of revenues), and $23.8 million (8% of revenues), respectively.

Our mix of operating and direct finance leases is a function of
customer preference and demand and our success in meeting those customer
requirements. During the initial two years of either an operating lease or a
direct finance lease, the contribution to our 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 that are avoided under a
direct finance lease.

We conduct business with shipping line customers throughout the
world and are 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 our shipping line customers to shift their
operations from areas of unfavorable political and/or economic conditions to
more promising areas. Approximately 98% of our revenues are billed and paid in
U.S. dollars. We believe these factors substantially mitigate foreign currency
rate risks.

Our container leasing operations are conducted through our
subsidiary, Interpool Limited, a Barbados corporation. Our 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. These profits
are subject to Barbados tax at rates that are significantly lower than the
applicable rates in the United States. (See "--United States Federal Income
Tax", below within this Item 7.) Our chassis leasing operations are
conducted primarily through Trac Lease, Inc. ("Trac Lease") and Interpool. The
short-term portion of our container leasing operations is conducted through our
50%-owned consolidated subsidiary, CAI. A portion of our other United States
equipment leasing activities are conducted through Interpool itself.

On June 27, 2002, our 50% owned subsidiary, CAI, which
concentrates on short term container leasing, entered into a new $110 million
senior credit agreement with a group of financial institutions. To facilitate
the closing of this new credit facility, we agreed to extend the repayment terms
of an outstanding subordinated note of CAI held by us and modified certain
financial covenants of the note. At the same time, we were granted the right to
appoint a majority of CAI's board of directors. As a result of these
transactions and gaining a majority position on CAI's board, our financial
statements include CAI as a consolidated subsidiary commencing June 27, 2002.
Previously, CAI was accounted for under the equity method of accounting. Our
share of the equity earnings (losses) of CAI for the periods prior to June 27,
2002 has been recorded in "(Income)/Loss for Investments Accounted for Under the
Equity Method" in the accompanying Consolidated Statements of Income. For the
period from June 27 through December 31, 2002, CAI's results of operations have
been included in the appropriate captions on the accompanying Consolidated
Statements of Income. The assets and liabilities of CAI at December 31, 2002
have been included on the accompanying Consolidated Balance Sheet.

Results of Operations

Year Ended December 31, 2002 Compared to Year Ended December 31, 2001

Revenues. Our revenues decreased to $327.1 million for
the year ended December 31, 2002, from $338.7 million in the year ended December
31, 2001, a decrease of $11.6 million or 3%. The decrease was primarily
attributable to our December 31, 2001 sale of PCR that resulted in reduced
leasing revenues of $31.0 million, partially offset by $20.7 million of
incremental leasing revenues as a result of consolidating CAI. In addition,
operating lease revenues decreased $10.7 million, partially offset by increased
finance lease revenues of $9.7 million. Although our container and chassis
fleets increased in size by 14% and 7%, respectively as compared to the year
ended December 31, 2001, the operating lease revenue declined due to reductions
in the daily rental rates of 15% for containers and 9% for chassis. The decrease
in container rates resulted from the termination of leases with higher rates
that were written when the cost of equipment was higher than it is currently.
These leases are being replaced by leases with lower rates reflecting the
current cost of equipment. Our chassis rates declined as a result of the
acquisition, in December 2001, of 20,700 used chassis on hire at per diem rates
lower than our existing fleet. In addition, a change to California law, which
made the lessee of the equipment responsible for the payment of licensing costs,
lowered the rates since these costs were previously recovered through per diem
rates. Utilization rates of our container fleet have historically been
calculated assuming containers managed by CAI were 100% utilized since they were
not available to us to put on hire. Under this method, utilization rates of our
container fleet and our domestic intermodal chassis operating fleet at December
31, 2002 were 98% and 93%, respectively, as compared to 96% and 93%,
respectively, at December 31, 2001. The utilization rates of our container
fleet, considering CAI's actual utilization rates for our containers managed by
CAI, were 92% and 89% at December 31, 2002 and 2001, respectively. The weighted
average revenue per day earned by us for our containers managed by CAI was $.93
and $1.09 per unit for the years ended December 31, 2002 and 2001, respectively.
The reduction in revenue per day was the result of lower rates in the short term
leasing market.

Lease Operating and Administrative
Expenses. Our lease operating and administrative expenses decreased to
$103.9 million for the year ended December 31, 2002 from $128.9 million in the
year ended December 31, 2001, a decrease of $25.0 million or 19%.

The decrease was primarily due to:

| |  | A reduction of $27.8 million resulting from the sale of
PCR as of December 31, 2001.
| | - | ------------------------------------------------------------------------------------

| |  | An increase of $11.5 million resulting from the
consolidation of the activities of CAI.
| | - | ---------------------------------------------------------------------------------------

| |  | A reduction in California licensing costs of $5.8
million due to a change in California law, which made the user of the equipment,
not the lessor, responsible for the payment of the licensing fees. This
reduction in expense has brought about a reduction in operating lease revenues
since these licensing costs were previously recovered through increased rental
rates.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | An increase in storage costs of $3.4 million primarily
due to the recovery of equipment from a customer in default and the increased
size of our fleet.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | An increase in maintenance and repair costs of $3.7
million primarily due to the refurbishment of chassis for use within the chassis
product line.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------

| |  | A reduction in positioning and handling expense of $2.4 million
primarily due to the recovery of equipment from a customer in default for which
the majority of the recovery effort took place in 2001.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | A reduction in insurance expense of $1.9 million primarily due to
the termination for a portion of 2002 of insurance to cover losses from lessee
insolvencies, bankruptcies and defaults.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | A reduction in equipment rental expense of $1.9 million for
equipment leased from The Ivy Group, an entity controlled by certain current and
former officers and directors, for the period prior to July 1, 2001.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | A reduction in California use taxes of $1.2 million related to the
TA assets acquired in October 2000.
| | - | ------------------------------------------------------------------------------------------------------

| |  | A decrease in salaries of $1.1 million primarily resulting from
reduced headcount following the completion of the integration of the assets
acquired from TA and the consolidation of the operations.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Lease operating and administrative expenses for 2003 are
expected to increase due to the costs of the restatement and the investigation
conducted by the Audit Committee as well as severance payments to be made to two
of our former officers.

Provision for Doubtful Accounts. Our provision for
doubtful accounts decreased to $7.8 million for the year ended December 31, 2002
from $9.0 million for the year ended December 31, 2001. The decrease was
primarily attributable to $3.1 million of provisions (provided in 2001) related
to amounts billed to a lease customer that went into default which were no
longer probable of collection from the lessee, partially offset by increased
reserves for a specific customer which became part of our non-performing
receivables during 2002. During 2002, we experienced an increase in our
non-performing receivables of $5.1 million. As of December 31, 2002 and 2001,
our non-performing receivables, net of applicable reserves, were 2.54% and
5.96%, respectively, of accounts and notes receivables, net. Our provision for
doubtful accounts is provided based upon a review of the outstanding receivables
and an evaluation of the adequacy of the allowance for doubtful accounts. The
adequacy of our allowance for doubtful accounts is periodically reviewed based
on the risk profile of the receivables, credit quality indicators such as the
level of past-due amounts and economic conditions, as well as the value of
underlying collateral in the case of finance lease receivables. (See Note 4 to
the Consolidated Financial Statements.)

Fair Value Adjustment for Derivative Instruments.
Our non-cash market value adjustment for derivative instruments expense
decreased to $5.5 million for the year ended December 31, 2002 from $8.2 million
in the year ended December 31, 2001, a decrease of $2.7 million. This decrease
is comprised of the following items:

| |  | The change in the fair value of interest rate swaps accounted for
as free standing derivatives (including the amortization of amounts included in
accumulated other comprehensive income upon the adoption of SFAS No. 133 on
January 1, 2001) was a loss of $5.6 million in 2002 as compared to a loss of
$8.1 million in 2001; and
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | The amount of ineffectiveness recognized for interest rate swaps
that are accounted for as cash flow hedges of variable rate debt was income of
$.1 million in 2002 as compared to a loss of $.1 million in 2001.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Depreciation and Amortization of Leasing
Equipment. Our depreciation and amortization expenses increased to $93.5
million for the year ended December 31, 2002, from $79.7 million for the year
ended December 31, 2001, an increase of $13.8 million or 17%.

The increase was primarily due to additions to our fleet as well
as:

| |  | An increase in depreciation expense of $8.7 million resulting from
the consolidation of the activities of CAI.
| | - | --------------------------------------------------------------------------------------------------------------

| |  | Depreciation savings of $7.0 million and $.5 million due to the
changes to our depreciation policy for chassis and containers, respectively.
(See Note 1 to the Consolidated Financial Statements for further information
regarding the depreciation policy changes for chassis and containers).
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | A decrease in depreciation expense of $6.0 million resulting from
the sale of PCR as of December 31, 2001.
| | - | ----------------------------------------------------------------------------------------------------------

| |  | An impairment write-down of $2.2 million based on an evaluation on
the carrying value of our long-lived assets.
| | - | ---------------------------------------------------------------------------------------------------------------

| |  | An impairment write-down of $1.9 million for defective units
supplied by a specific manufacturer for which the expenses are not recoverable
due to the bankruptcy of the manufacturer.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | A write off of $7.5 million which represents the book value of the
unrecovered equipment from a lease customer in default.
| | - | --------------------------------------------------------------------------------------------------------------------------

| |  | Reduced depreciation expense of $1.3 million as a result of our
sale of rail trailers and domestic containers to GE Capital Corporation in March
2001.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------

Losses for Investments Accounted for Under the Equity
Method. The increase in losses for investments accounted for under the
equity method of $5.8 million during the year ended December 31, 2002 as
compared to the prior year period resulted primarily from increased equity
method losses of CAI that we recorded through June 26, 2002, at which time CAI
became our consolidated subsidiary. For the period from January 1, 2002 through
June 26, 2002, our share of the equity losses of CAI was $4.0 million, as
compared to equity losses of CAI of $.2 million for the year ended December 31,
2001. The increase in losses was primarily the result of CAI recording an
impairment loss of $3.5 million related to equipment held for sale that was
impaired, as well as a change in the container depreciation policy which
resulted in an increase in CAI's depreciation of $1.3 million. These two items
increased losses we recorded by $1.6 million, net of CAI's tax benefit. The
remaining increase in losses resulted from reduced operating performance of the
CAI fleet. In addition, for the year ended December 31, 2002, we recorded $2.6
million representing our share of equity losses as a result of certain other
investments accounted for under the equity method of accounting, as compared to
equity losses of $0.6 million for the year ended December 31, 2001.

Other (Income)/Expense, Net. We had other
(income)/expense, net of $1.1 million during the year ended December 31, 2002
compared to $(9.8) million in 2001. The increase of $10.9 million from the year
ended December 31, 2001 was due to:

| |  | The establishment of a reserve for our notes receivable from PCR ($4.0 million),
which effectively reduced the carrying value of these notes to zero during 2002,
and the establishment of a reserve for our guarantee of PCR debts due to third
parties as well as other liquidation accruals which are our responsibility ($5.7
million).
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | The write off of Microtech's $1.4 million of computer equipment related
receivables from PCR which have been determined to be uncollectible.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------

| |  | The sale of our Chicago property, which had been acquired as part
of the acquisition of TA and resulted in a gain of $4.8 million recorded in the
second quarter of 2002.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Additional losses of $3.0 million primarily resulting
from the sale of leasing equipment recovered from a customer in default.
| | - | ------------------------------------------------------------------------------------------------------------------------------

| |  | A $1.6 million increase for income recorded in 2002 ($10.6
million) over 2001 ($9.0 million) for costs incurred and losses realized on a
defaulted lease that we expect to recover through our insurance policy.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Payments of $2.7 million made to PCR by a company controlled by
certain of our officers and directors which were expensed.
| | - | --------------------------------------------------------------------------------------------------------------------------

| |  | Gain of $1.8 million on the sale of rail trailers and domestic
containers previously owned by us to GE Capital Corporation during the three
months ended March 31, 2001.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Fee income of $.5 million as a result of our acting as an agent
and arranging a lease transaction between two parties.
| | - | ----------------------------------------------------------------------------------------------------------------------

Interest Expense. Our interest expense increased
to $108.3 million in the year ended December 31, 2002 from $98.3 million in the
year ended December 30, 2001, an increase of $10.0 million or 10%. The increase
in interest expense was primarily attributable to $2.3 million of incremental
interest expense as a result of consolidating CAI, deferred financing fees of
$4.8 million which were written off when we refinanced certain of our debt
instruments, and increased borrowings to fund capital expenditures, resulting in
incremental interest expense of $10.3 million. These increases to interest
expense were partially offset by reduced interest rates resulting in reduced
interest expense of $7.3 million.

Interest Income. Our interest income decreased to
$4.6 million in the year ended December 31, 2002 from $9.4 million in the year
ended December 31, 2001, a decrease of $4.8 million or 51%. The decrease in
interest income was primarily due to reduced earnings on invested cash balances
due to lower interest rates.

Minority Interest (Income)/Expense, Net. The
change in minority interest (income)/expense, net of $2.3 million for the year
ended December 31, 2002 as compared to the prior year period resulted primarily
from:

| |  | An increase in minority interest expense for dividends and
distributions paid by Chassis Holdings I LLC ("Chassis Holdings") of $3.2
million for the year ended December 31, 2002 as compared to $1.7 million in
2001. This increase for 2002 reflects a full year of operation for Chassis
Holdings, a consolidated subsidiary which was formed on July 1, 2001.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | A reduction in minority interest income of $2.1 million resulting
from losses sustained by Microtech and PCR for the year ended December 31, 2001.
During 2001, we acquired the remaining 24.5% ownership stake in Microtech,
thereby increasing our ownership in Microtech to 100%. In addition, on December
31, 2001, we completed the contractual sale of its 51% ownership stake of PCR.
As a result, neither PCR nor Microtech are included in minority interest
(income)/expense, net for 2002.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | An increase in minority interest income of $1.3 million as a
result of the consolidation of CAI effective June 27, 2002.
| | - | ------------------------------------------------------------------------------------------------------------------------

(Benefit)/Provision for Income Taxes. We recorded
an income tax benefit of $1.4 million for the year ended December 31, 2002 as
compared to a tax provision of $5.4 million for the year ended December 31,
2001. This reduction in the provision for income taxes was caused by lower
pre-tax income before cumulative effect of change in accounting principle of
$30.5 million. The international container division that is taxed at lower rates
based upon the income tax convention between the United States and Barbados,
contributed favorably to pre tax income. Losses contributed by the domestic
intermodal division, which are taxed at higher United States tax rates, provided
a tax benefit. These losses include certain expenses related to the liquidation
of PCR for which no tax benefit will be realized. The 35% statutory tax rate
applied to these losses would have given rise to additional tax benefits of $1.2
million. Additionally, other provisions for deferred tax asset valuation
allowances decreased tax benefits by $6.3 million.

Net Income. As a result of the factors described
above, our net income decreased to $4.4 million in the year ended December 31,
2002 from $28.1 million in the year ended December 31, 2001.

Year Ended December 31, 2001 Compared to Year Ended December 31,
2000

Revenues. Our revenues increased to $338.7 million
for the year ended December 31, 2001, from $287.6 million in the year ended
December 31, 2000, an increase of $51.1 million or 18%. The increase was
primarily attributable to our October 2000 acquisition of TA chassis which
resulted in $58.2 million of additional leasing revenue, partially offset by
reduced operating lease revenues contributed by PCR ($5.4 million) and Microtech
($1.7 million) as compared to the prior year period. In addition, finance lease
revenues increased $2.6 million and operating lease revenues decreased $2.6
million as compared to the prior year period. Although our container and chassis
fleets increased in size by 19% and 2%, respectively as compared to the year
ended December 31, 2000, the operating lease revenue increased at a slower rate
due to reductions in the daily rental rates of 10% for containers while daily
rental rates remained the same for chassis as compared to the prior year. The
decrease in container rates resulted from the termination of leases with higher
rates that were written when the cost of equipment was higher than it is
currently. These leases are being replaced by leases with lower rates reflecting
the current cost of equipment. Utilization rates of our container fleet have
historically been calculated assuming containers managed by CAI were 100%
utilized since they were not available to us to put on hire. Under this method,
utilization rates of our container fleet and domestic intermodal chassis
operating lease fleet at December 31, 2001 were 96% and 93%, respectively, and
at December 31, 2000 were 99% and 97%, respectively. The utilization rates of
our container fleet, considering CAI's actual utilization rates for our
containers managed by CAI, were 89% and 95% at December 31, 2001 and 2000,
respectively, due to weak market conditions. The weighted average revenue per
day earned on the CAI managed assets was $1.09 and $1.31 per unit for the years
ended December 31, 2001 and 2000, respectively. The reduction in revenue per day
was the result of lower utilization of the equipment in the short term leasing
market.

Lease Operating and Administrative Expenses. Our
lease operating and administrative expenses increased to $128.9 million for the
year ended December 31, 2001 from $90.6 million in the year ended December 31,
2000, an increase of $38.3 million or 42%.

The increase was primarily due to:

| |  | The October 2000 acquisition of assets from TA that resulted in
$21.4 million of incremental lease operating and administrative expense.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------

| |  | An increase in equipment rental expense of $4.8 million primarily
due to the operating lease sale/leaseback transactions entered during the fourth
quarter of 2000.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | An increase in storage costs of $5.6 million primarily due to the
recovery of equipment from a customer in default and the increased size of our
fleet.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | An increase in maintenance and repairs expense of $4.2 million
primarily due to repairs on our operating lease fleet.
| | - | ---------------------------------------------------------------------------------------------------------------------

| |  | An increase in positioning and handling expense of $1.6 million
primarily due to the recovery of equipment from a customer in default.
| | - | --------------------------------------------------------------------------------------------------------------------------------------

| |  | An increase in salary expense of $1.3 million primarily due to
increased headcount as a result of the October 2000 acquisition of assets from
TA.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------

| |  | A reduction of $1.0 million in lease administrative and operating
expense incurred by Microtech as compared to the prior year period.
| | - | -------------------------------------------------------------------------------------------------------------------------------------

Provision for Doubtful Accounts. Our provision for
doubtful accounts increased to $9.0 million for the year ended December 31, 2001
from $3.8 million in the year ended December 31, 2000. The increase was
primarily attributable to $3.1 million of provisions related to amounts billed
to a lease customer that went into default which were no longer probable of
collection from the lessee, as well as additional reserves provided for specific
customers in default under their lease obligations. During 2001, we experienced
a decrease in our non-performing receivables of $8.2 million; primarily as a
result of $18.3 million in write-offs in 2001 as compared to $0.8 in 2000. As of
December 31, 2001 and 2000, our non-performing receivables, net of applicable
reserves, were 5.96-% and 7.34%, respectively, of accounts and notes receivables,
net. Our provision for doubtful accounts is provided based upon a review of the
outstanding receivables and an evaluation of the adequacy of the allowance for
doubtful accounts. The adequacy of our allowance for doubtful accounts is
periodically reviewed based on the risk profile of the receivables, credit
quality indicators such as the level of past-due amounts and economic
conditions, as well as the value of underlying collateral in the case of finance
lease receivables. (See Note 4 to the Consolidated Financial Statements).

Depreciation and Amortization of Leasing Equipment.
Our depreciation and amortization expenses increased to $79.7 million for the
year ended December 31, 2001 from $66.1 million for the year ended December 31,
2000, an increase of $13.6 million or 21%.

The increase was primarily due to additions to the fleet as well
as:

| |  | An increase in depreciation expense of $12.4 million resulting from the October
2000 acquisition of assets from TA.
| | - | -------------------------------------------------------------------------------------------------------------------

| |  | Reduced depreciation expense of $3.9 million as a result of our
sale of rail trailers and domestic containers to GE Capital Corporation in March
2001.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Depreciation savings of $2.7 million due to the changes to our
depreciation policy for chassis. (See Note 1 to the Consolidated Financial
Statements for further information regarding the depreciation policy changes for
chassis and containers).
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | A decrease in depreciation expense of $1.0 million relative to
Microtech and PCR compared to the prior year period.
| | - | -------------------------------------------------------------------------------------------------------------------

Losses for Investments Accounted for Under the Equity
Method. The increase in losses for investments accounted for under the
equity method of $.2 million during the year ended December 31, 2001 as compared
to the prior year period resulted primarily from an increase in our equity
losses from our unconsolidated subsidiaries, which are accounted for under the
equity method of accounting.

Other (Income)/Expense, Net We had other
(income)/expense, net of $(9.8) million during the year ended December 31, 2001
compared to $1.5 million in 2000. The change in other (income)/expense, net of
$11.3 million from the year ended December 31, 2000 was due to:

| |  | $9.0 million of income recorded in 2001 for costs incurred and
losses realized on a defaulted lease that we expect to recover through our
insurance policy.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | A gain of $1.8 million on the sale of rail trailers and domestic
containers previously owned by us to GE Capital Corporation during the three
months ended March 31, 2001.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | A reduction in gains on retirement of debt of $.5 million as
compared to the prior year period.
| | - | -----------------------------------------------------------------------------------------------

| |  | A reduction in losses of $.9 million resulting from the sale of
leasing equipment as compared to the prior year period.
| | - | -----------------------------------------------------------------------------------------------------------------------

Interest Expense. Our interest expense increased
to $98.3 million in the year ended December 31, 2001 from $87.8 million in the
year ended December 31, 2000, an increase of $10.5 million or 12%. The increase
in interest expense was primarily due to increased borrowings to fund assets
acquired from TA and fund capital expenditures, resulting in incremental
interest expense of $12.4 million, partially offset by reduced interest rates
resulting in reduced interest expense of $1.9 million.

Interest Income. Our interest income decreased to
$9.4 million in the year ended December 31, 2001 from $17.2 million in the year
ended December 31, 2000, a decrease of $7.8 million or 45%. The decrease in
interest income was primarily due to reduced earnings on invested cash balances,
as well as reduced cash balances on hand during 2001. Average cash balances on
hand during 2000 were higher than 2001 in anticipation of our acquisition of TA
assets in October 2000.

Minority Interest (Income)/Expense, Net. The
change in minority interest (income)/expense, net of $1.2 million for the year
ended December 31, 2001 as compared to the prior year period resulted primarily
from an increase in minority interest income of $2.9 million resulting from
losses sustained by Microtech and PCR for the year ended December 31, 2001 as
compared to the prior year period, partially offset by $1.7 million in dividends
and distributions paid by Chassis Holdings I LLC, which was formed in July 2001.

Provision for Income Taxes. Our provision for
income taxes decreased to $5.4 million for the year ended December 31, 2001 from
$9.6 million for the year ended December 31, 2000. This reduction in the
provision for income taxes was caused by lower pre-tax income before cumulative
effect of change in accounting principle of $20.1 million. The international
container division that is taxed at lower rates based upon the income tax
convention between the United States and Barbados, contributed the majority of
the pre tax income. In addition, there were losses relating to PCR for which tax
benefits of $0.7 million will not be realized and a provision for deferred tax
asset valuation allowances that increased tax expense by $0.9 million.

Income Before Cumulative Effect of Change in Accounting
Principle. As a result of the factors described above, our income before
cumulative effect of change in accounting principle was $28.1 million in the
year ended December 31, 2001 versus $44.0 million in the year ended December 31,
2000.

Cumulative Effect of Change in Accounting
Principle. We recorded the cumulative effect of a change in accounting
principle of $.7 million in 2000 resulting from a change in our accounting for
our maintenance and repairs expense from the accrual in advance to the direct
expense method.

Net Income. As a result of the factors described
above, our net income decreased to $28.1 million in the year ended December 31,
2001 from $44.7 million in the year ended December 31, 2000.

Liquidity and Capital Resources

Historically, we have used funds from various sources to meet
our corporate obligations and to finance the acquisition of equipment for lease
to customers. The primary funding sources have been cash provided by operations,
borrowings (generally from banks), securitization of lease receivables, the
issuance of capital lease obligations and the sale of our securities. In
addition, we have generated cash from the sale of equipment being retired from
our fleet. In general, we have sought to meet debt service requirements from the
leasing revenue generated by our equipment.

We have usually funded a significant portion of the purchase
price for new containers and chassis through borrowings under our revolving
credit agreement and other lines of credit or through secured financings with
the financial institutions with which we have relationships. Throughout our
years in business, we have been successful in completing financings on favorable
terms on a regular basis and in the ordinary course of our business. However,
while we have successfully completed several significant financings during 2003
(See Note 21 to the Consolidated Financial Statements for further discussion),
our ability to borrow funds on favorable terms has been severely limited since
March 31, 2003 because of the restatement to our historical financial
statements, the related Audit Committee and SEC investigations and the delay in
completing our audited 2002 financial statements and filing our Form 10-K for
2002. Our reduced ability to borrow funds on favorable terms has required us to
reduce the level of new business we have written with customers.

In addition, although we have in the past paid our equipment
manufacturers, most of which are located in China, for our acquisitions of
containers and chassis within normal trade terms (generally 60-90 days), in
recent months we have generally not been able to make payments on this schedule
because of the limited availability of new financings. As a result, we have
negotiated extensions of these trade terms and have obtained approval of our
manufacturers to defer our payment obligations to them. As of December 22, 2003,
the total amount we owed to these manufacturers for equipment already delivered
(most of which has been placed into service in our fleet) or committed to
purchase was approximately $120.5 million. Of this amount, $54.6 million of such
trade debt is represented by promissory notes we issued to these manufacturers
during 2003, each of which originally provided for payment in full by November
30, 2003. We advised our manufacturers that we intended to satisfy a total of
$54.0 million of these outstanding obligations in December 2003, with the
remaining balances to be paid in January or February 2004. Our manufacturers
have consented to this payment schedule. We have made the payments due in
December 2003 to these manufacturers. We may seek further deferrals from these
manufacturers.

We currently intend to fund our remaining payment obligations to
these manufacturers with proceeds from one or more financings that are currently
in process. We have received a signed commitment from a bank regarding a term
loan facility of up to $100.0 million, which would be secured by newly acquired
equipment. While this financing is not assured and remains subject to
documentation and other customary closing conditions before it would be
consummated, our discussions with this institution are at an advanced stage as
of the date of filing of this Annual Report on Form 10-K and the preparation of
formal legal documentation for this loan has been commenced by counsel for the
lender.

We also have had discussions with other financial institutions,
though at a more preliminary stage, regarding other potential financing
transactions that we believe could be consummated early in 2004. Therefore, we
believe that we should be able to obtain the financing necessary for us to
satisfy our remaining manufacturer payment obligations in the near future. We
may also elect to fund a portion of our remaining obligations to our
manufacturers through use of our available cash (subject to obtaining approval
from certain lenders, if required).

While we are optimistic that we will be able to obtain the
financing necessary to enable us to satisfy our remaining manufacturer
obligations on the schedule we have presented to our manufacturers, in the event
that we are unable to promptly consummate one or more financings of at least $50
million, our available cash resources would likely not be sufficient to make the
remaining payments that may be required by our manufacturers, and one or more of
these manufacturers could take action against us. These actions could be very
disruptive to our business and might include the commencement of legal
proceedings (either in the United States or in another country), exercising
offset rights with respect to lease payments due from lessees under common
ownership or otherwise affiliated with the manufacturer, directing lessees of
equipment not yet paid for to make their lease payments to the manufacturer, or
seeking to take possession of equipment sold to us for which payment had not
been made. Even without any such action being taken, our future relationships
with these manufacturers could be adversely affected by any failure to meet the
agreed upon schedule of payments. In addition, the taking of such action by one
or more manufacturers, or the possibility that such action could be taken based
upon our failure to satisfy our remaining payment obligations to these
manufacturers, may prompt one or more of our other lenders to claim that a
cross-default has occurred under the provisions of such lender's debt
instruments and to attempt to declare the obligations due to such lender
immediately due and payable. If at that time we were to be unable to pay these
obligations in full or obtain additional deferrals from, or otherwise satisfy,
the manufacturers, such a lender might attempt to exercise its rights as a
secured creditor with respect to its collateral or take other action against us.
Accordingly, we believe it is in our best interests for us to pay our
obligations to our equipment manufacturers as promptly as possible.

Because our financial restatement and re-audits, as well as the
completion of the internal investigations by special counsel to our Audit
Committee, prevented the timely completion of our financial statements and
Annual Report on Form 10-K for the year ended December 31, 2002 and our
financial statements and Quarterly Reports on Form 10-Q for interim periods in
2003, we requested and received necessary waivers under our debt agreements.
Most of these waivers, as currently in effect, waive any default resulting from
the late preparation and filing with the SEC of our financial statements and
required periodic reports for 2002 and the first three quarters of 2003,
provided that our Annual Report on Form 10-K is filed with the SEC by January 9,
2004, and our Quarterly Reports on Form 10-Q for the first three quarters of
2003 are filed with the SEC by January 31, 2004, February 29, 2004, and March
31, 2004, respectively. We hope that we will be able to make these SEC filings
by the applicable dates. We have not requested or received waivers with respect
to our Annual Report on Form 10-K for the year ending December 31, 2003, or our
Quarterly Reports on Form 10-Q for 2004, although we anticipate requesting such
waivers prior to March 31, 2004. In the event that any additional waiver is
required and cannot be obtained before the applicable deadline, we might be in
violation of the terms of the applicable indebtedness, and the lender could
exercise its right to declare us in default, accelerate the indebtedness owed to
such lender, and take other action against us. Moreover, the taking of any such
action, or the possibility that such action could be taken, could cause one or
more of our other financial institutions to take action against us. As described
below, in connection with the receipt of certain waivers, we agreed to certain
modifications to the terms of several of our debt agreements, including in a few
cases, the pledging of additional collateral and changes to amortization
schedules. Several of these waivers provide by their terms that the waiver is
void if certain events occur, such as a declaration of default by one or more of
our other lenders, or the commencement of civil or criminal proceedings against
us or any adverse action by the SEC or the New York Stock Exchange, if such
action has a material adverse effect upon our ability to perform our contractual
obligations. To date, we do not believe that any of these actions has occurred.
In addition, several of the waivers are contingent upon a determination by the
applicable lender that the changes resulting from our financial restatement to
our historical financial statements for 2001 and 2000 and the first nine months
of 2002 do not represent a material change to our financial condition for these
periods as originally reported. While the restatement was necessary, we believe
that our revised financial statements do not represent such a material change,
but we cannot assure that our lenders would reach a similar conclusion. In the
event any of our existing waivers ceased to be effective by its terms, we could
be deemed to be in violation of the terms of the indebtedness to which the
waiver relates.

In this event of any default or violation under the terms of our
indebtedness, one or more of our lenders could exercise their right to declare
us in default, accelerate the indebtedness owed to such lenders, and take other
actions against us, such as attempting to exercise rights as a secured creditor
with respect to any collateral. If any of these circumstances were to occur, we
might not be able to meet our obligations to our lenders and other creditors and
might not be able to prevent such parties from taking actions that could
jeopardize our ability to continue to operate our business.

In connection with our delayed SEC filings and the receipt of
waivers from our lenders necessitated by the delayed filings, the members of our
Board of Directors and certain of their affiliates who own shares of our common
stock have agreed to defer their receipt of any dividend payments, including
those we may declare in the future, until we are in compliance with all SEC
filing requirements.

Cash Flow Through 2002

Between 1990 and the early part of 2003, we steadily increased
our fleet of chassis and containers and added to our portfolio of finance
leases. We provided (used) cash flow from operations of $120.1 million, $410.8
million, and $(155.7) million in 2002, 2001 and 2000, respectively. In 2002,
2001 and 2000 net cash (used for) provided by financing activities was $123.1
million, $(216.5) million, and $631.0 million, respectively. We purchased
equipment and entered into direct finance leases requiring funding of $256.0
million in 2002, $328.2 million in 2001, and $286.8 million in 2000. Although,
as noted above, our equipment purchases have decreased in 2003, we plan to
resume increasing the size of our chassis and container fleets in 2004, once
financing is available to us.

The following table sets forth certain historical cash flow
information for the three years ended December 31, 2002.

`Year Ended December 31,
                                                                                                  2001        2000
                                                                                      2002      restated    restated
                                                                                      ----      --------    --------
                                                                                         (Dollars in millions)

Net cash provided by (used for) operating activities                                  $120.1       $410.8    $(155.7)
Proceeds from disposition of leasing equipment                                          12.0         15.6       83.9
Acquisition of leasing equipment                                                       191.9        201.4      198.2
Investment in direct financing leases                                                   64.1        126.8       88.6
Net collections on direct finance leases                                                59.7         65.3       76.6
Net proceeds (payments) of issuance of long-term debt and capital lease
obligations in excess of payment of long-term debt and capital lease
obligations                                                                            203.8        (91.0)     483.6`

Contractual Obligations and Commercial Commitments

We and our subsidiaries are parties to various operating and
capital leases and are obligated to make payments related to our long term
borrowings. (See Notes 4 and 5 to the Consolidated Financial Statements.) We are
also obligated under various commercial commitments, including obligations to
our equipment manufacturers. In the past, our equipment manufacturer obligations
have been in the form of conventional accounts payable and have been satisfied
within normal trade terms. As discussed above, in 2003, we have not been able to
pay our manufacturers on this schedule and have converted a total of $54.6 of
these obligations into promissory notes, which matured by their terms on
November 30, 2003. We obtained approval from our manufacturers to defer payment
of a portion of these obligations provided we make payments totaling $54.0
million to them in December 2003. We have made the payments due in December 2003
to the manufacturers. We are seeking to satisfy our remaining payment
obligations to our manufacturers as promptly as possible.

The following tables summarize our contractual obligations and
commercial commitments at December 31, 2002.

`Amounts Due by Period
                                                                     (Dollars in millions)
                                        ---------------------------------------------------------------------
                                                   Less than 1
  Contractual Obligations               Total          year         1-3 years      4-5 years    After 5 years
  -----------------------               -----          ----         ---------      ---------    -------------

Long Term Debt                          $823.0        $100.0          $416.5        $256.0           $50.5
Capital Lease Obligations                774.2          61.4           132.4         110.9           469.5
Operating Leases                         101.9          20.1            37.8          30.0            14.0
Unconditional Purchase
Obligations                               33.5          33.5            ---           ---             ---
Employment Agreements                     13.9           2.9             5.1           3.8             2.1
Obligations Related to PCR
Liquidation                                6.4           5.9              .5          ---             ---
                                           ---           ---              --          ----            ----
Total  Contractual  Cash
Obligations                           $1,752.9     $   223.8         $ 592.3       $ 400.7        $  536.1
                                      ========     =========         =======       =======        ========`

`Amount of Commitment Expiration Per Period
    Other Commercial         Total Amounts                ------------------------------------------
      Commitments              Committed          Less than 1 year       1-3 years      4-5 years     Over 5 years
      -----------              ---------          ----------------       ---------      ---------     ------------

Standby Letters  of
Credit                          $6.0                   $---                  $6.0             $---       $---
Guarantees                      12.4                    ---                  ---               1.5        10.9
                                ----                   ----                  ---               ---        ----
Total Commercial
Commitments                    $18.4                   $---                  $6.0             $1.5       $10.9
                               =====                   ====                  ====             ====       =====`

Debt Obligations

We have a container securitization facility, which was
originally established as an off-balance sheet source of financing in March
1999. This facility was amended in July 2001 to allow additional financings to
be accounted for as on-balance sheet secured debt financing. In August 2002, the
container securitization facility was extended with the maximum outstanding
limited to $150.0 million. In October 2002, the facility was renewed and the
facility amount was increased to $200.0 million. At December 31, 2002, $123.1
million of the container securitization facility was utilized, of which $31.1
million relates to off-balance sheet financing, while $92.0 million relates to
on-balance sheet financing and is included in debt and capital lease obligations
in the consolidated balance sheets. At December 31, 2002, the rate on this
facility was 5.85%, including the effect of interest rate swap contracts in
place as of December 31, 2002. In April 2003, the Company borrowed $33.6 million.
In July 2003 and October 2003, in connection with obtaining necessary waivers
under this facility to the late filing of our periodic reports with the SEC and
the restatement of our past financial statements, we amended the container
securitization facility to relinquish the right to request additional advances
under the facility and agreed that all lease payments subsequently received
under the facility would be used to reduce the indebtedness. In addition, we
agreed to comply with several new covenants, consistent with those contained in
our amendment to our revolving credit agreement, as described below.

In July 2000, we 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, 2001, $277.4 million of this
facility was outstanding with an interest rate of 4.75%, including the effect of
interest rate swap contracts in place as of December 31, 2001. We repaid this
facility in full in March 2002 with the proceeds from our new chassis
asset-backed securitization facility completed in March 2002.

In March 2002, we established a $500.0 million chassis
asset-backed securitization facility. This facility is guaranteed by MBIA, Inc.,
a financial guarantee company, and was therefore rated AAA by Standard &
Poor's and Aaa by Moody's. The proceeds from this financing were used to repay
debt related to a secured financing facility used to fund the acquisition of
assets from Transamerica, to repay a previously established chassis
securitization facility, to fund growth of our intermodal equipment fleet and
for working capital purposes. On September 30, 2002, we entered into a
sale/leaseback transaction and expanded the total debt and capital lease
obligations to a total of $540.9 million outstanding, of which $129.3 million is
a debt obligation and $411.6 million is a capital lease obligation under the
sale/leaseback. At December 31, 2002 the total debt and capital lease obligation
outstanding under the sale/leaseback totaled $530.7 million of which $120.2
million is a debt obligation and $410.5 million is a capital lease obligation.
At December 31, 2002, the interest rate on this facility was 5.08%, including
the effect of interest rate swap contracts in place as of December 31, 2002.
This facility continues to be accounted for as an on-balance sheet secured
financing. The assets used to secure this facility are segregated in a Delaware
statutory titling trust (the Trust) and in a special purpose entity (which is
consolidated by us) and amount to $18.6 million of accounts receivable and fixed
assets with a net book value of $504.3 million at December 31, 2002. In
addition, $24.0 million of cash and marketable securities at December 31, 2002
are restricted for use by the Trust and the special purpose entity and included
on our consolidated balance sheet. The assets, which are segregated in the
special purpose entity and included on our consolidated balance sheet, are not
available to pay the claims of our creditors. In July 2003 and October 2003, in
connection with obtaining necessary waivers under this facility to the late
filing of our periodic reports with the SEC and the restatement of our past
financial statements, we agreed to certain modifications of the terms of the
facility.

In May 2003, we established a $200.0 million revolving warehouse
facility within our chassis securitization facility and received funding from a
$25.5 million debt obligation issuance. This warehouse facility has a 364-day
revolving period and will start debt amortization in May 2004 if not extended or
renewed. The interest rate on the debt outstanding under this warehouse facility
is 4.12%, including the effect of an interest rate swap contract in place at
time of funding. In July 2003 and October 2003, in connection with obtaining
necessary waivers under this facility to the late filing of our periodic reports
with the SEC and the restatement of our past financial statements, we agreed,
among other things, to suspend our ability to incur additional funding under the
warehouse facility until such time as the loan and guarantee parties have each
agreed in their sole discretion to reinstate their funding commitments. The loan
and guarantee parties are under no obligation to reinstate any commitments to
the warehouse facility.

We have a $215.0 million revolving credit facility with a group
of commercial banks; on December 31, 2002, $175.0 million was outstanding, with
an interest rate of 2.64%. This facility, which is secured by equipment on lease
to customers and the related lease receivables, was renewed and amended in July
2000, at which time the term was extended until July 31, 2005. The credit limit
under this facility was $215.0 million through July 31, 2003, at which time the
credit limit declined to $193.5 million through July 31, 2004. The credit limit
is scheduled to decline to $172.0 million from July 31, 2004 through July 31,
2005. Under our revolving credit facility and most of our other debt
instruments, we are required to maintain a tangible net worth (as defined) of
$125.0 million, a fixed charge coverage ratio of 1.5 to 1 and a funded debt to
net worth ratio of 4.0 to 1. At December 31, 2002, we were in compliance with
these requirements.

In July 2003, October 2003 and January 2004, in connection with
obtaining necessary amendments under the revolving credit facility to the late
filing of our periodic reports with the SEC and the restatement of our past
financial statements, we agreed, among other things, to reduce advance rates
under the facility, to add several events of default, to increase the interest
rate margin until we are in compliance with all SEC reporting requirements, and
to maintain specified levels of unrestricted cash and cash equivalents until our
delinquent SEC filings are made. We also agreed to restrictions on dispositions
of collateral and on encumbrances of assets as well as a limitation on
concessions that could be made to our other financial institutions in connection
with obtaining waivers. The October 2003 amendment also required us to provide
additional financial information to the lenders under the facility and to
continue the engagement of our financial advisor, FTI Consulting Inc., or to
engage another acceptable financial advisor. We believe we are in compliance
with the requirements of the agreement as amended.

In February 1998, we issued $100.0 million principal amount of
6-5/8% Notes due 2003 (the "6-5/8% Notes"). The net proceeds were used to repay
$83.0 million in borrowings under our revolving credit agreement and for other
general corporate purposes. During the fourth quarter of 1999, we retired $17.0
million of the 6-5/8% Notes and recognized a gain of $1.2 million. During the
first quarter of 2000, we retired $8.2 million of the 6-5/8% Notes and
recognized a gain of $.8 million. During 2001, we retired $27.2 million of the
6-5/8% Notes and recognized a gain of $.7 million. During 2002, we retired $6.4
million of the 6-5/8% Notes and recognized a gain of $.03 million. In October
2002, we commenced a tender offer for any and all of our outstanding 6-5/8%
Notes, of which approximately $41.3 million principal amount was outstanding
upon commencement of the tender offer. The purchase price in the tender offer
was $1,000 per $1,000 principal amount of 6-5/8% Notes tendered, plus accrued
and unpaid interest. The source of the consideration for the tender offer was
cash on hand. The expiration date of the tender offer was November 15, 2002. As
a result of this tender offer we retired $33.1 million principal amount of the
6-5/8% Notes at par. As of December 31, 2002, $8.2 million principal amount of
the 6-5/8% Notes remained outstanding. On March 1, 2003 the remaining 6-5/8% Notes
outstanding were paid off in accordance with terms of the agreement.

In July and August 1997, we issued $225.0 million of ten year
notes, comprised of $150.0 million of 7.35% Notes due 2007 and $75.0 million 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, we retired $3.0 million of the 7.35% Notes and
recognized a gain of $.6 million. During 2001, we retired $2.1 million of the
7.20% Notes and recognized a gain of $.2 million. During 2002 we retired $10.1
million of the 7.20% Notes and recognized a gain of $1.1 million. As of December
31, 2002, $62.8 million and $147.0 million principal amount of the 7.20% and
7.35% Notes, respectively, remained outstanding.

In addition to the debt specifically identified above, we had
additional notes and loans outstanding with various financial institutions
totaling $111.7 million, as of December 31, 2002, with installments payable in
varying amounts through 2009 with interest rates of approximately 2.61% to 9.95%.
In the fourth quarter of 2003, we agreed to certain modifications to the
provisions of some of these instruments. These modifications include in certain
instances changes to the amortization schedule resulting in accelerated
principal payments totaling approximately $16.6 million to be paid in 2004 and
2005, an interest rate increase on $23.8 million of debt outstanding and the
pledging of additional collateral with a value of $35.7 million.

In July 2002, we commenced a registered subscription rights
offering of up to $31.5 million of our 9.25% Convertible Redeemable Subordinated
Debentures. The debentures were offered to holders of our common stock pursuant
to the exercise of non-transferable subscription rights and were to be
convertible into shares of our common stock. We had the right in our discretion
to accept offers from other parties to purchase debentures not subscribed for by
stockholders. On August 14, 2002, we terminated the subscription rights offering
due to a delay in filing our Form 10-Q for the quarter ended June 30, 2002. We
re-commenced the offering during November 2002 and accepted subscriptions for
$32.1 million of debentures, which were issued in December 2002. The size of the
offering was increased and we subsequently accepted $5.1 million of additional
subscriptions in January and February 2003, resulting in a total of $37.2
million of debentures being issued. The debentures bear interest at an annual
rate of 9.25%. They have a mandatory redemption feature upon the earlier of the
occurrence of a change of control or December 27, 2022. They have an optional
redemption feature after the third anniversary at a price of 100% of outstanding
principal, plus accrued interest. They have a special redemption feature between
December 27, 2006 and December 27, 2007, during which period we may redeem the
debentures at $25.50 per debenture plus accrued interest, if the average closing
price of our common stock for five consecutive trading days equals or exceeds
$25.50 per share. Lastly, at any time, any holder of the debentures may convert
the debentures into our common stock at a per share conversion price of
$25.

In October 2000, we established a secured financing facility in
the amount of $300.0 million, to fund our acquisition of assets from TA. At
December 31, 2001, $97.7 million of this facility was outstanding with an
interest rate of 3.94%. We repaid this facility in full in March 2002 with the
proceeds from our new chassis asset-backed securitization facility completed in
March 2002.

Subsequent to December 31, 2002, we have incurred additional
debt obligations in connection with financing our equipment leasing activities.
However, as indicated above, our financial restatement and Audit Committee and
SEC investigations, as well as the delay in completing our financial statements
and filing our SEC reports, have resulted in a significant reduction in our
amount of new financings during 2003 as compared to prior years.

In July 2003, October 2003 and January 2004, in connection with
obtaining necessary amendments under the revolving credit facility due to the
late filing of our periodic reports with the SEC and the restatement of our past
financial statements, we agreed, among other things, to reduce advance rates
under this facility, to add several events of default, to increase the interest
rate margin and to maintain specified levels of unrestricted cash and cash
equivalents until our delinquent SEC filings are made. We agreed to maintain
unrestricted cash and cash equivalents of at least $71.0 million at all times
and at least $80.0 million as of the last business day of each month, until our
Form 10-K is filed. Thereafter, we agreed to maintain at least $60.0 million at
all times and at least $67.5 million as of the last business day of the month
until receipt of all delayed financial statements. This minimum cash requirement
was also adopted in the waivers for the container securitization and one other
loan agreement. The Company also agreed to restrictions on dispositions of
collateral and on encumbrances of assets as well as a limitation on concessions
that could be made to its other financial institutions in connection with
obtaining waivers. The October 2003 amendment also required the Company to
provide additional financial information to the lenders under the facility and
to continue the engagement of a financial advisor.

As of December 31, 2002, our commitments for capital
expenditures totaled approximately $33.5 million. Our available liquidity at
December 31, 2002 was $188.1 million consisting of $148.1 million of cash and
marketable securities (which excludes $24.0 million of cash within the chassis
securitization facility) and $40.0 million of availability under our $215.0
million revolving credit facility. Required debt repayments and capital lease
payments for 2003 totaled $161.4 million for the next twelve months.

In the past, cash on hand, cash flow from operations, borrowings
under credit facilities and the net proceeds of the issuance of debt and equity
securities in appropriate markets has been sufficient to meet our working
capital needs, capital expenditures and required debt repayments. Because the
availability of financing to us has been limited in 2003, due to our financial
restatement and the investigations by our Audit Committee's special counsel and
the SEC, and the delay in completing our audited financial statements and filing
our 2002 Form 10-K, we have not been able to fund all of our capital expenditure
commitments, specifically our obligations to equipment manufacturers, during the
second half of 2003, and we have deferred payments due to our equipment
manufacturers. As described above, we are seeking to satisfy our remaining
payment obligations through proceeds of one or more financings that are
currently in process but have not been consummated. There can be no assurance
that we will be able to consummate any of these financings and satisfy our
obligations to manufacturers. We also expect to continue to rely in substantial
part on long-term financing for any future purchase of equipment or strategic
acquisitions to expand our business in the future. We cannot assure that
long-term financing will be available for these purposes on acceptable terms or
at all. In addition, from time to time, we may explore new sources of capital
both at the parent and subsidiary levels.

Transamerica Leasing

In October 2000, we 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, we acquired substantially all of the domestic containers, chassis and
trailers of the North American Intermodal Division and related assets and
assumed most of the liabilities of the business. We paid approximately $681
million in cash for the acquisition, which included $8.4 million in fees and
other costs for advisors. The acquisition was financed through a combination of
cash on hand, proceeds obtained from a committed secured financing facility
equal to approximately $300.0 million, as well as approximately $101.0 million
of proceeds obtained from a chassis securitization facility established in July
2000. In the acquisition, we acquired approximately 70,000 chassis, 23,000 rail
trailers and 18,000 domestic containers. In March 2001, we sold all rail
trailers and domestic containers previously acquired in the TA transaction along
with 9,000 of our existing rail trailers and domestic containers to GE Capital
for approximately $345.3 million.

Insurance Claim

In February 2001, we demanded return of all our equipment on
lease to a significant customer based in South Korea. The lessee subsequently
commenced insolvency proceedings and did not return our equipment. At the time
of this insolvency, we maintained insurance coverage against such lessee
defaults, and we submitted a claim to our insurance carriers seeking to recover
the value of the receivables owed by the customer (to the extent covered by the
insurance policies). Our claim includes per diem rental charges for up to one
hundred and eighty days after the default date for equipment not returned by the
lessee as well as loss, damage and recovery costs relating to the equipment on
lease that are also billable to the lessee in accordance with the lease. We have
filed an insurance claim in excess of the policy's maximum coverage of $34.6
million, net of a $.4 million deductible under the insurance policy. As of
December 31, 2002, the outstanding receivable recorded from the insurance
carrier is $19.6 million. The difference between the receivable recorded due
from the insurance carrier and the claim submitted primarily relates to per diem
revenues, repairs and maintenance and other costs billable to the lessee (and
covered by the insurance contract) that are in excess of costs incurred. Upon
collection of the receivable from the insurance carriers, any amounts in excess
of or less than the receivable recorded would be recorded as other
(income)/expense, net in the Consolidated Statements of Income. For further
explanation, see Note 2 Restatement of Previously Issued Financial Statements -
"Accounting for Insurance Claim" to the Consolidated Financial
Statements.

We provided the supporting documentation for our claim to an
adjuster appointed by the insurance underwriters. Based upon discussions with
the adjuster, the analysis of the supporting documentation is complete and a
report of the adjuster's findings was submitted to the underwriters in November
2002.

On December 26, 2002, our insurance underwriters commenced a
declaratory judgment action against us in the United States District Court for
the Southern District of New York seeking rescission of our customer default
insurance coverage or, in the alternative, a declaration that the premiums paid
by us for this insurance were inadequate. The insurance underwriters' primary
contention is that we did not fully disclose to them all material information
concerning our South Korean lessee. The underwriters also dispute the timing of
our notifications to them of this loss and the amount of the loss. We have filed
a response to this complaint. We intend to vigorously pursue our claim for
recovery under our insurance policies and believe that we have strong claims
under the policies and defenses to the arguments asserted by the insurance
underwriters. Although it is impossible to give assurances as to the ultimate
outcome of this proceeding in view of the uncertainties inherent in any
litigation, based upon the progress of this case to date and the merits of our
position, and after consultation with external counsel, we believe that the
facts as they have been developed through discovery, and the applicable law,
should entitle us to a recovery in the full amount of our claim. We will
continue to monitor the progress and development of this litigation. As the
litigation progresses, we will continue to evaluate the prospects for full
recovery on our insurance claim, and reserves for the impairment of the asset
values may become necessary.

Allowance for Doubtful Accounts

The allowance for doubtful accounts includes our estimate of
allowances necessary for receivables on both operating and finance lease
receivables. The allowance for doubtful accounts is developed based on two key
components (1) specific reserves for receivables which are impaired for which
management believes full collection is doubtful and (2) reserves for estimated
losses inherent in the receivables based upon historical trends. We believe our
allowance for doubtful accounts is adequate to provide for credit losses
inherent on our accounts and notes receivable. The allowance for doubtful
accounts is intended to provide for losses inherent in the accounts and notes
receivable, and requires the application of estimates and judgments as to the
outcome of collection efforts and the realization of collateral, among other
things. In addition, changes in economic conditions or other events may
necessitate additions or deductions to the allowance for doubtful accounts.
Finance leases are evaluated on a case by case basis. When evaluating our
operating and finance lease receivables for impairment, we consider, among other
things, the level of past-due amounts of the respective receivable, the
borrower's financial condition, credit quality indicators of the borrower, the
value of underlying collateral and third party credit enhancements such as
guarantees and insurance policies. Once a finance lease is determined to be
non-performing, our 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 finance lease is reclassified
to leasing equipment, and
| | - | -------------------------------------------------------------------------------------------

| |  | Collectibility is evaluated, taking into consideration equipment
book value and the total outstanding receivable, as well as the likelihood of
collection through the recovery of equipment.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The adequacy of our allowance for doubtful accounts is
periodically reviewed based on the risk profile of the receivables, credit
quality indicators such as the level of past-due amounts and economic
conditions, as well as the value of underlying collateral in the case of finance
lease receivables. (See Note 4 to the Consolidated Financial
Statements.)

As of December 31, 2002 and 2001, included in accounts and notes
receivable are non-performing receivables of $11.1 million and $6.0 million,
respectively. The Company's average non-performing receivables are $9.2 million
and $4.8 million for the years ended December 31, 2002 and 2001, respectively.
As of December 31, 2002 and 2001, included in the allowance for doubtful
accounts are reserves for the non-performing receivables of $9.5 million and
$2.8 million, respectively. As of December 31, 2002 and 2001 our non-performing
receivables net of applicable reserves, were 2.54% and 5.96%, respectively, of
accounts and notes receivable, net.

Other

CAI

In April 1998, we acquired a 50% common equity interest in CAI.
CAI owns and leases its own fleet of containers and manages, for a fee,
containers owned by third parties. We entered into an operating relationship
with CAI primarily to facilitate the rental in the short-term market of
containers coming off long-term lease, to gain access to new companies looking
to lease containers on a long term basis and to realize cost efficiencies from
the operation of a coordinated container lease marketing group. The marketing
group which is organized as our wholly-owned subsidiary, is responsible for
soliciting container lease business for both us and for CAI, including long-term
and direct finance lease business and short-term lease business on master lease
agreements. All long-term and direct finance lease business is purchased by us,
except that we offer to CAI, at cost, 10% of this long-term and direct finance
lease business.

In connection with the acquisition of our equity interest in
CAI, we loaned CAI $33.7 million under a Subordinated Note Agreement (Note) that
is collateralized by all containers owned by CAI as of April 30, 1998 or
thereafter acquired, subject to the priority security interest lien of CAI's
senior credit facility, except for certain excluded collateral. Interest on the
Note was calculated at an annual fixed rate of 10.5% payable quarterly. The
original repayment terms required mandatory quarterly principal payments of $1.7
million beginning July 30, 2003 through April 30, 2008. The Note was subject to
certain financial covenants and was cross-defaulted with CAI's senior credit
facility, subject to the terms of a subordination agreement.

On June 27, 2002, CAI entered into an amended $110.0 million
senior revolving credit agreement with a group of financial institutions. To
facilitate the closing of this new credit facility, we agreed to extend the
repayment terms of our Note so as to require mandatory quarterly principal
payments of $1.7 million beginning July 30, 2006 through April 30, 2011 and
modified certain financial covenants in the Note. Interest on the Note continues
to accrue at an annual fixed rate of 10.5% and is payable quarterly. The Note
continues to be cross-defaulted with CAI's senior credit agreement, subject to
the terms of an amended and restated subordination agreement. At the same time,
we were provided a majority position on CAI's board of directors. As a result of
these transactions and gaining a majority position on CAI's board, our financial
statements include CAI as a consolidated subsidiary commencing June 27, 2002.
Previously, CAI was accounted for under the equity method of accounting. Our
share of the equity earnings (losses) of CAI for the periods from January 1,
2002 through June 26, 2002 have been recorded in "Loss for Investments Accounted
for Under the Equity Method" in the accompanying Consolidated Statements of
Income. For the period from June 27 through December 31, 2002, CAI's results of
operations have been included in the appropriate captions on the accompanying
Consolidated Statements of Income. The assets and liabilities of CAI at December
31, 2002 have been included on the accompanying Consolidated Balance
Sheets.

A total of $74.0 million was outstanding under CAI's senior
revolving credit facility at December 31, 2002. Borrowings under CAI's senior
credit facility are secured by substantially all CAI's assets, other than
certain excluded assets, and are payable on June 27, 2005. The senior credit
facility contains various financial and other covenants. At June 30, 2002, CAI
would not have been in compliance with one of the financial covenants then
contained in its senior credit facility as well as similar covenants under two
master lease agreements relating to equipment in CAI's fleet. CAI received
amendments to these covenants in September 2002 that were made retroactive to
June 30, 2002. As a result, CAI was in compliance as of June 30, 2002 with all
senior credit facility and lease covenants as amended and continued to be in
compliance as of December 31, 2002. The senior credit facility was amended in
May 2003 to increase the letter of credit commitment by the lenders'
administrative agent.

In addition, CAI has entered into numerous sale-leaseback
transactions with third parties pursuant to which CAI sells maritime shipping
containers to such third parties and then leases the shipping containers back
from such third parties. In connection with such transactions, CAI has entered
into the following lease agreements:

CAI entered into a master lease agreement dated April 30, 1998,
as amended, which amends and restates a prior agreement dated July 17, 1996,
pursuant to which CAI currently leases shipping containers from a banking
corporation. The master lease agreement has an expiration date of July 31, 2008.
CAI is required to make regular payments to lessor and, as of December 31, 2002,
CAI's total outstanding obligation under this lease agreement was approximately
$23.2 million. CAI has the option to purchase the leased equipment on a date
prior to the expiration of the initial term of the lease agreement or at the
time of such expiration. In addition, upon the expiration of the initial term of
the lease agreement, CAI has the right to extend the lease agreement for one
year or return the leased equipment to lessor under the terms and conditions set
forth in the lease agreement. This lease agreement was amended in 2002 to
include certain additional negative covenants and financial covenants of CAI.
The lease agreement was amended in May 2003 to provide for a rent prepayment
under the lease agreement in the approximate amount of $3.75 million to the
lessor.

CAI entered into a master lease agreement dated April 30, 1998,
as amended, which amends and restates a prior agreement dated November 21, 1996,
pursuant to which CAI currently leases shipping containers from a banking
corporation. The master lease agreement has a term of ten years. CAI is required
to make regular payments to lessor and, as of December 31, 2002, CAI's total
outstanding obligation under this lease agreement was approximately $5.6
million. CAI has the option to purchase the leased equipment on a date prior to
the expiration of the initial term of the lease agreement or at the time of such
expiration. In addition, upon the expiration of the initial term of the lease
agreement, CAI has the right to extend the lease agreement for one year or
return the leased equipment to lessor under the terms and conditions set forth
in the lease agreement. This lease agreement was amended in 2002 to include
certain additional negative covenants and financial covenants of CAI.

Chassis Holdings I, LLC

For many years, The Ivy Group, a New Jersey general partnership
composed directly or indirectly of certain of our current and former directors
and executive officers, together with certain of its principals, leased chassis
to our wholly owned subsidiary Trac Lease, Inc. (Trac Lease) for use in Trac
Lease's business. As of January 1, 2001, Trac Lease leased a total of 6,047
chassis from The Ivy Group and its principals for an aggregate annual lease
payment of approximately $2.6 million. On July 1, 2001, we restructured our
relationship with The Ivy Group and its principals to provide us with managerial
control over the 6,047 chassis previously leased by Trac Lease from The Ivy
Group and its principals. As a result of the restructuring, the partners of The
Ivy Group contributed these 6,047 chassis and certain other assets and
liabilities to a newly formed subsidiary, Chassis Holdings I LLC (Chassis
Holdings), in exchange for $26.0 million face value of preferred membership
units and 10% of the common membership units, and Trac Lease contributed 902
chassis and $2,000 in cash to Chassis Holdings in exchange for $3.0 million face
value of preferred membership units and 90% of the common membership units. The
preferred membership units are entitled to receive a preferred return prior to
the receipt of any distributions by the holders of the common membership units.
The value of the contributed chassis was determined by taking the arithmetic
average of the results of independent appraisals performed by three nationally
recognized appraisal firms in connection with our establishment of a chassis
securitization facility in July 2000. As the managing member of Chassis
Holdings, Trac Lease exercises sole managerial control over the entity's
operations. Chassis Holdings leases all of its chassis to Trac Lease at a rental
rate equal to the then current Trac Lease fleet average per diem. Chassis
Holdings and the holders of the preferred membership units are party to a
Put/Call Agreement providing that the holders of preferred units may put such
units to Chassis Holdings under certain circumstances and Chassis Holdings has
the right to redeem such units under certain circumstances. Chassis Holdings
will be required to make certain option payments to the holders of the preferred
membership units in order to preserve its right to redeem such units. Dividends
paid on the common units and distributions on the preferred units owned by The
Ivy Group, totaling $3.1 million and $1.7 million for the years ended December
31, 2002 and 2001, respectively, are included in minority interest
(income)/expense, net in the accompanying Consolidated Statements of
Income.

Chassis Distribution Agreement

In April 2003, we agreed to become a 50% owner through an
initial investment of $500,000 of a limited liability company (the "LLC") formed
with a foreign chassis manufacturer. The purpose of the LLC is to be the
exclusive worldwide distributor of chassis built by this manufacturer and for us
to share in the profits the LLC earns in selling these chassis to third parties.
Under the terms of the Distribution agreement for this equipment, we have agreed
to purchase approximately 15,000 chassis at preferred pricing over a ten-year
period, of which 1,100 chassis were ordered by us during 2003. The LLC began
operations during the second quarter of 2003.

Stock Repurchases

During 1999, we authorized the repurchase of up to 1,000,000
shares of our common stock from time to time through open market purchases or
privately negotiated transactions. During 2002, we purchased 9,300 shares for an
aggregate price of $.13 million. During the fourth quarter of 2001, we purchased
58,100 shares for an aggregate purchase price of $.9 million.

United States Federal Income Tax

We are subject to federal and state income taxes as a Subchapter
"C" corporation under the Internal Revenue Code. Interpool, Trac Lease 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. The federal
income tax laws have two requirements for classifying a company as a personal
holding company. We and our subsidiaries currently satisfy the first
requirement, the ownership of more than 50% of the value of Interpool's stock by
five or fewer individuals. Whether or not we or any of our subsidiaries satisfy
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.

Based upon current management projections, we will not be
considered a personal holding company for federal income tax purposes for 2002
(and possibly in subsequent years). If, we or any of our subsidiaries were
classified as a personal holding company for federal income tax purposes, in
addition to our regular federal income tax liability, our 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 at the rate of 38.6% (15% for 2003 and
later years). Management anticipates that for the immediate future, our current
level of dividends will be sufficient to avoid having any undistributed personal
holding company income, and thus does not anticipate that any personal holding
company tax will be imposed. There can be no assurance, however, that we will
not at some point in the future become liable for personal holding company tax.
Furthermore, we may at some point in the future elect to increase the dividend
rate on our common stock in order to avoid personal holding company
tax.

We have 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, 2002, such suspended passive losses totaled approximately
$193.0 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,
Interpool may be liable for United States federal income taxes on earnings of
Interpool Limited and any other foreign subsidiaries of ours, whether or not
such earnings are distributed to us. 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 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,
we believe 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, we would be taxed on the amount we would have received if
Interpool Limited had distributed all its income to us 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 we expect that rental income will constitute
at least 50% of Interpool Limited's gross income, we do 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. We do not expect that Interpool Limited will
invest any earnings in United States property.

At December 31, 2002, unremitted earnings of this subsidiary
were approximately $275.7 million. The deferred U.S. Federal Income taxes
related to the unremitted earnings of this subsidiary would be approximately
$96.5 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 income tax convention
between the United States and Barbados, including any protocols and amendments
(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. 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 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. We believe 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 this 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.

The Tax Convention does not afford Interpool Limited any relief
from the personal holding company tax or any other tax that may be imposed on
the undistributed earnings of a Barbados corporation. 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 this income unless it is distributed to Interpool as a dividend. We
expect that Interpool Limited would distribute this income to
Interpool.

As a company resident in Barbados, Interpool Limited is required
to file tax returns in Barbados and pay any tax liability to Barbados. However,
no Barbados tax returns have been prepared or filed for Interpool Limited for
any period subsequent to its 1997 tax year, because such tax returns are
required to be accompanied by audited financial statements for Interpool
Limited, which are not available. We believe that the failure to file these
returns has not resulted in any underpayment of taxes, interest or penalties
(other than a nominal late filing penalty recently enacted in Barbados), because
we believe that no Barbados taxes would have been due for the years for which
returns have not been filed. We further believe that Interpool Limited's failure
to file these returns would not present any other material risk to Interpool.
Nonetheless, we intend to have the necessary Interpool Limited financial
statements prepared and audited as promptly as practicable so that Interpool
Limited's Barbados tax returns can be filed as required.

State and Local Taxes

Income taxes. Interpool 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. In the early 1990's, 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. We cannot predict the extent to which states other than Tennessee
will now attempt to collect sales tax on our equipment leasing revenues based on
this Supreme Court decision. Under the terms of our equipment leases, we would
be entitled to pass any such sales tax on to our lessees.

Inflation

Management believes that inflation has not had a material
adverse effect on our 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.

Critical Accounting Policies

The preparation of financial statements in conformity with
generally accepted accounting principles requires management to use judgment in
making estimates and assumptions that affect 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 income and expenses during
the reporting period. The following accounting policies include inherent risks
and uncertainties related to judgments and assumptions made by management.
Management's estimates are based on the relevant information available at the
end of each period.

Allowance for Doubtful Accounts  The allowance for
doubtful accounts is set on a quarterly basis and is based on the risk profile
of the receivables, credit quality indicators such as the level of past due
amounts and economic conditions, as well as the value of underlying collateral.
Changes in economic conditions or other events may necessitate additions or
deductions to the allowance for doubtful accounts. The allowance is intended to
provide for losses inherent in the accounts and notes receivable, and requires
the application of estimates and judgments as to the outcome of collection
efforts and the realization of collateral, among other things.

Accounting for Leasing Equipment  Long lived
assets are depreciated on a straight-line basis over their estimated useful
lives to residual values that approximate fair value. Equipment useful lives are
based upon actual experience in our fleet as well as the useful lives assigned
to the equipment by independent appraisers. We continue to review our
depreciation policies on a regular basis to evaluate if changes have taken place
that would suggest that a change in the depreciation policies is warranted.
Periodically a determination is made as to whether the carrying amount of the
fleet exceeds its estimated future undiscounted cash flows. In addition, all
idle equipment is evaluated to determine whether the units will be repaired and
returned to service or sold based upon the best economic alternative. Assets to
be disposed are reported at the lower of the carrying amount or fair
value.

Accounting for an Insurance Claim for a Customer in
Default  We have sought to reduce credit risk by maintaining
insurance against customer insolvency and equipment related losses. The Company
ceases the recognition of lease revenues for amounts billable to the lessee
after the lease default date at the time the Company determines that such
amounts are not probable of collection from the lessee. In connection with the
accounting for the insurance policy, the Company records a receivable which is
limited to the actual costs incurred or losses recognized that would have been
billable to the lessee pursuant to the lease contract (which are also covered by
the insurance contract). Items that are covered under the insurance contract,
for amounts billable to the lessee in accordance with the lease, that are in
excess of costs incurred and losses recognized by the Company, are considered a
gain contingency. Upon collection of the receivable from the insurance carriers,
any amounts in excess of or less than the receivable recorded would be recorded
as other (income)/expense, net in the Consolidated Statements of Income. At
December 31, 2002, the receivable due from the insurance carriers totaled
approximately $19.6 million related to our claim that exceeded $34.6 million,
the maximum coverage of our insurance policy. The collectibility of the claim is
subject to litigation. It is impossible to give assurance as to the ultimate
outcome of this proceeding in view of the uncertainties inherent in any
litigation. We believe that the facts as they have been developed through
discovery, and the applicable law, should entitle us to a recovery in the full
amount of the claim. If we were unsuccessful in this litigation, our maximum
write-off would amount to $19.6 million ($17.2 million, net of tax) or $0.63 and
$0.59 in basic and diluted net income per share, respectively.

Income Taxes  Deferred tax liabilities and
assets are recognized for the expected future tax consequences of events that
have been reflected in the Consolidated Financial Statements. Deferred tax
liabilities and assets are determined based on the differences between the book
values and the tax basis of particular assets and liabilities, using tax rates
in effect for the years in which the differences are expected to reverse. A
valuation allowance is provided to offset any net deferred tax assets if, based
upon the available evidence which may be subject to management estimates, it is
more likely than not that some or all of the deferred tax assets will not be
realized.

United States/Barbados income tax convention
 We currently receive tax benefits under an income tax convention between
the United States and Barbados, the jurisdiction in which our subsidiary,
Interpool Limited, operates our container business, is incorporated.
Specifically, under that income tax convention, any profits of Interpool Limited
from leasing of containers used in international trade, generally are taxable
only in Barbados at an approximate 3% tax rate, and not in the United States.
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 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. We believe 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 this
continued eligibility. Historically, no deferred U.S. Federal income taxes have
been provided on the unremitted earnings of the subsidiary since it is our past
practice and future intention to permanently reinvest such earnings. We have
documented our ability to reinvest earnings generated annually from our
international operations. This documentation contains certain management
judgments and estimates of economic conditions and the future demand for
containers. Any unremitted earnings that we would be unable to reinvest in our
international operations could be subject to taxation at United States tax
rates.

Recent Accounting Pronouncements

In June 2002, the FASB issued SFAS No. 146, Accounting for
Costs Associated with Exit or Disposal Activities ("SFAS 146"). SFAS
146 requires that a liability for costs associated with exit or disposal
activities be recognized when the liability is incurred. Existing U.S. GAAP
provide for the recognition of such costs at the date of management's commitment
to an exit plan. In addition, SFAS 146 requires that the liability be measured
at fair value and be adjusted for changes in estimated cash flows. The
provisions of the new standard are effective for exit or disposal activities
initiated after December 31, 2002. It is not expected that SFAS 146 will
materially affect our consolidated financial statements.

In November 2002, the FASB issued FASB Interpretation No. 45,
Guarantor's Accounting and Disclosure Requirements for Guarantees, Including
Indirect Guarantees of Indebtedness of Others ("FIN 45"). FIN 45 elaborates
on the disclosures to be made by a guarantor in interim and annual financial
statements about its obligations under certain guarantees it has issued. A
guarantor is required to disclose (a) the nature of the guarantee, including the
approximate term, how the guarantee arose, and the events and circumstances that
would require the guarantor to perform under the guarantee; (b) the maximum
potential amount of future payments under the guarantee; (c) the carrying amount
of the liability, if any, for the guarantor's obligation under the guarantee;
and (d) the nature and extent of any recourse provisions or available collateral
that would enable the guarantor to recover the amounts paid under the guarantee.
FIN 45 also clarifies that a guarantor is required to recognize, at the
inception of a guarantee, a liability for the fair value of the obligation
undertaken in issuing the guarantee. Disclosure requirements are effective for
financial statements with periods ending after December 15, 2002 while the
initial recognition and initial measurement provisions shall be applied on a
prospective basis to guarantees issued or modified after December 31, 2002. We
have adopted the disclosure requirements of FIN 45 on December 31, 2002. (See
Note 12 to the Consolidated Financial Statements for disclosures regarding our
guarantees.) We do not expect the adoption of the recognition and measurement
provision to have a material impact on our consolidated financial
statements.

In January 2003, the FASB issued FASB Interpretation No. 46,
Consolidation of Variable Interest Entities ("FIN 46"). FIN 46 clarifies
the application of Accounting Research Bulletin No. 51, Consolidated
Financial Statements ("ARB 51"), to certain entities in which equity
investors do not have the characteristics of a controlling financial interest or
do not have sufficient equity at risk for the entity to finance its activities
without additional subordinated financial support from other parties. ARB 51
requires that an enterprise's consolidated financial statements include
subsidiaries in which the enterprise has a controlling financial interest. That
requirement usually has been applied to subsidiaries in which an enterprise has
a majority voting interest. The voting interest approach is not effective in
identifying controlling financial interests in entities that are not
controllable through voting interests or in which the equity investors do not
bear the residual economic risk. FIN 46 explains how to identify variable
interest entities and how an enterprise assesses its interests in a variable
interest entity to decide whether it is its primary beneficiary and therefore is
required to consolidate that entity. FIN 46 also addresses the initial valuation
of the assets and liabilities to be consolidated, the treatment of any gain or
loss resulting from the initial measurement and disclosure requirements for the
primary beneficiary. All entities with variable interests in variable interest
entities created after January 31, 2003 shall apply the provisions of FIN 46
immediately. Public entities with a variable interest in a variable interest
entity created before February 1, 2003 shall apply the provisions of this
interpretation no later than the first interim or annual reporting period
beginning after December 15, 2003. On December 24, 2003, FASB issued an
Interpretation which clarified and modified FASB Interpretation No. 46. We are
in the process of analyzing FIN 46, as modified. Based upon its preliminary
analysis, it would appear we may be required to deconsolidate our investment in
Interpool Capital Trust. As a result, Company-obligated Mandatorily Redeemable
Preferred Securities in Subsidiary Grantor Trusts would be eliminated and
replaced by an amount reported as debt in the Consolidated Financial Statements.
Such changes are not expected to have any significant impact on our financial
condition or results of operations.

In May 2003, the FASB issued SFAS No. 150, Accounting for
Certain Financial Instruments with Characteristics of Both Liabilities and
Equity ("SFAS 150"). This statement requires that certain financial
instruments that, under previous guidance, issuers could account for as equity,
be classified as liabilities in statements of financial position. Almost all
instruments within the scope of this statement are initially measured at fair
value with subsequent changes in fair value flowing through the income
statement. One exception is mandatorily redeemable instruments. These
instruments are initially measured at the present value of the amount to be paid
at the earliest settlement date and adjusted to their redemption/settlement
amount using the implicit interest rate at inception. Most of the guidance in
SFAS 150 is effective for financial instruments entered into or modified after
May 31, 2003, and otherwise is effective at the beginning of the first interim
period beginning after June 15, 2003. On November 7, 2003, the provisions of
SFAS 150, relating to mandatorily redeemable non-controlling interest, were
deferred indefinitely. It is not expected that SFAS 150 will materially affect
our consolidated financial statements.

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. We manage interest rate risk to protect margins
on existing transactions. Interest rate risk is the risk of earnings volatility
attributable to changes in interest rates. Additionally, we consider interest
rate swap contracts as an integral part of borrowing transactions. We seek to
minimize our exposure by entering into amortizing interest rate swap contracts,
which coincide with the principal and maturity of the underlying debt
instruments hedged. We do not use leveraged swaps and do not use leverage in any
of our investment activities that would put principal capital at
risk.

For 2002, a 10% change in variable interest rates would have
resulted in a $1.1 million change in pretax earnings.

For further information regarding our floating and fixed rate
debt, see Note 5 to the Consolidated Financial Statements.

Credit Risk

We maintain detailed credit records about our customers. Our
credit policy sets different maximum exposure limits for our 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, operational history and
financial strength.

We seek to reduce credit risk by maintaining insurance coverage
against customer insolvency and related equipment losses. Through January 31,
2002 we maintained contingent physical damage, recovery/repatriation and loss of
revenue insurance, which provided coverage in the event of a customer's
insolvency, bankruptcy or default giving rise to our demand for return of all of
our equipment. The policy covered the cost of recovering our equipment from the
customer, including repositioning cost, damage to the equipment and the value of
equipment which could not be located or was uneconomical to recover. It also
covered a portion of the lease revenues that we might lose as a result of the
customer's default (i.e., up to 180 days of lease payments following an
occurrence under the policy). The premium rates and deductibles for this type of
insurance have increased as a result of higher claim experience by the Company
and also within the industry. As a result, effective March 1, 2003, we obtained
a new policy covering similar occurrences for a twelve-month period but with
revised terms. The new coverage decreases the recoverable amount per occurrence
to $9 million as compared to $35 million in our previous policy and increases
the deductible per occurrence from $.4 million to $3 million. There can be no
assurance that this or similar coverage will be available in the future or that
such insurance will cover the entirety of any loss.

Allowance for Doubtful Accounts

The allowance for doubtful accounts includes our estimate of
allowances necessary for receivables on both operating and finance lease
receivables. The allowance for doubtful accounts is developed based on two key
components (1) specific reserves for receivables which are impaired for which
management believes full collection is doubtful and (2) reserves for estimated
losses inherent in the receivables based upon historical trends. We believe our
allowance for doubtful accounts is adequate to provide for credit losses
inherent on our accounts and notes receivable. The allowance for doubtful
accounts is intended to provide for losses inherent in the accounts and notes
receivable, and requires the application of estimates and judgments as to the
outcome of collection efforts and the realization of collateral, among other
things. In addition, changes in economic conditions or other events may
necessitate additions or deductions to the allowance for doubtful accounts.
Finance leases are evaluated on a case by case basis. When evaluating our
operating and finance lease receivables for impairment, we consider, among other
things, the level of past-due amounts of the respective receivable, the
borrower's financial condition, credit quality indicators of the borrower, the
value of underlying collateral and third party credit enhancements such as
guarantees and insurance policies. Once a finance lease is determined to be
non-performing, our 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 finance lease is reclassified
to leasing equipment, and
| | - | -------------------------------------------------------------------------------------------

| |  | Collectibility is evaluated, taking into consideration equipment
book value and the total outstanding receivable, as well as the likelihood of
collection through the recovery of equipment.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The adequacy of our allowance for doubtful accounts is
periodically reviewed based on the risk profile of the receivables, credit
quality indicators such as the level of past-due amounts and economic
conditions, as well as the value of underlying collateral in the case of finance
lease receivables. (See Note 4 to the Consolidated Financial
Statements.)

As of December 31, 2002 and 2001, included in accounts and notes
receivable are non-performing receivables of $11.1 million and $6.0 million,
respectively. The Company's average non-performing receivables are $9.2 million
and $4.8 million for the years ended December 31, 2002 and 2001, respectively.
As of December 31, 2002 and 2001, included in the allowance for doubtful
accounts are reserves for the non-performing receivables of $9.5 million and
$2.8 million, respectively. As of December 31, 2002 and 2001 our non-performing
receivables, net of applicable reserves, were 2.54% and 5.96%, respectively, of
accounts and notes receivable, net.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA

Index to Consolidated Financial Statements

`Page No.

INTERPOOL, INC.

Independent Auditor's Report....................................................  69

Consolidated Balance Sheets--At December 31, 2002 and 2001 (restated)...........  70

Consolidated Statements of Income For the Years Ended December 31, 2002,
   2001 (restated) and 2000 (restated)..........................................  71

Consolidated Statements of Changes in Stockholders' Equity For the Years Ended
   December 31, 2002, 2001 (restated) and 2000 (restated).......................  72

Consolidated Statements of Cash Flows For the Years Ended December 31, 2002,
   2001 (restated) and 2000 (restated)..........................................  73

Notes to Consolidated Financial Statements......................................  74`

Independent Auditors' Report

The Board of Directors
Interpool, Inc.:

We have audited the accompanying consolidated balance sheets of
Interpool, Inc. (a Delaware corporation) and subsidiaries as of December 31,
2002 and 2001 and the related consolidated statements of income, changes in
stockholders' equity and cash flows for each of the years in the three year
period ended December 31, 2002. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards
generally accepted in the United States of America. 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 consolidated financial statements referred
to above presents fairly, in all material respects, the financial position of
Interpool, Inc. and subsidiaries as of December 31, 2002 and 2001, and the
results of their operations and their cash flows for each of the years in the
three year period ended December 31, 2002 in conformity with accounting
principles generally accepted in the United States of America.

As discussed in Note 2 to the accompanying consolidated
financial statements, the Company has restated its consolidated balance sheet as
of December 31, 2001, and the related consolidated statements of income, changes
in stockholders' equity, and cash flows for each of the years in the two year
period ended December 31, 2001, which consolidated financial statements were
previously audited by other independent auditors who have ceased
operations.

As discussed in Notes 1, 6, and 11 to the consolidated financial
statements, in 2002 the Company changed its method of accounting for (i)
goodwill and (ii) the impairment or disposal of long-lived assets; in 2001 the
Company changed its method of accounting for derivative instruments; and in 2000
the Company changed its method of accounting for repair costs on its equipment
from the accrual in advance to the direct expense method.

(signed) KPMG LLP
New York, New York
January 9, 2004

INTERPOOL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2002 AND 2001(dollars in thousands, except share and per share amounts)

`ASSETS                                                                                           2002         2001
                                                                                                 ----         ----
                                                                                                             Restated
                                                                                                             --------

CASH AND SHORT-TERM INVESTMENTS                                                                 $170,613    $103,760
MARKETABLE SECURITIES, available for sale at fair value                                            1,467         638
ACCOUNTS AND NOTES RECEIVABLE, less allowance of $14,033 and $6,674,
    respectively                                                                                  63,950      52,964
NET INVESTMENT IN DIRECT FINANCING LEASES                                                        334,129     275,372
OTHER RECEIVABLES, net                                                                            26,691      48,611
LEASING EQUIPMENT, net of accumulated depreciation and amortization of $463,809
    and $316,626, respectively                                                                 1,556,816   1,334,787
OTHER INVESTMENT SECURITIES, available for sale at fair value                                     10,319      15,652
OTHER ASSETS                                                                                      75,234      78,884
ASSETS OF BUSINESS TRANSFERRED UNDER CONTRACTUAL AGREEMENT                                         1,902      11,561
                                                                                                   -----      ------
TOTAL ASSETS                                                                                  $2,241,121  $1,922,229
                                                                                              ==========  ==========

LIABILITIES AND STOCKHOLDERS' EQUITY

ACCOUNTS PAYABLE AND ACCRUED EXPENSES                                                           $161,914     $74,047
INCOME TAXES:
    Current                                                                                        ( 216)        162
    Deferred                                                                                      31,869      35,114
                                                                                                  ------      ------
TOTAL TAXES                                                                                       31,653      35,276

DEFERRED INCOME                                                                                    3,688         540
DEBT AND CAPITAL LEASE OBLIGATIONS
    Due within one year                                                                          161,407     186,657
    Due after one year                                                                         1,435,804   1,168,023
                                                                                               ---------   ---------
         TOTAL DEBT AND CAPITAL LEASE OBLIGATIONS                                              1,597,211   1,354,680
LIABILITIES OF BUSINESS TRANSFERRED UNDER CONTRACTUAL                                              1,902       5,078
    AGREEMENT
COMPANY-OBLIGATED MANDATORILY REDEEMABLE PREFERRED SECURITIES IN SUBSIDIARY GRANTOR TRUSTS        75,000      75,000
    (holding solely junior Subordinated Deferrable interest debentures of the Company)
    (75,000 shares 9-7/8% Capital Securities outstanding, liquidation preference $75,000)
MINORITY INTEREST IN EQUITY OF SUBSIDIARIES                                                       33,560      26,339
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,                           28          28
      27,579,952 issued at December 31, 2002 and 2001
    Additional paid-in capital                                                                   126,165     124,182
    Treasury stock, at cost, 225,900 and 216,600 shares at December 31, 2002 and 2001,            (2,229)     (2,099)
      respectively
    Retained earnings                                                                            237,227     239,065
    Accumulated other comprehensive loss                                                         (24,998)     (9,907)
                                                                                                 -------      ------
    Total stockholders' equity                                                                   336,193     351,269
                                                                                                 -------     -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                     $2,241,121  $1,922,229
                                                                                               ==========  ==========

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

INTERPOOL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000(dollars in thousands, except share and per share amounts)

`2002         2001            2000
                                                                                        ----         ----            ----
                                                                                                   Restated        Restated
                                                                                                   --------        --------

REVENUES, including income recognized on direct financing leases of $36,246,
  $26,499 and $23,845, respectively                                                   $327,124      $338,718       $287,553
                                                                                      --------      --------       --------
COSTS AND EXPENSES:
  Lease operating expenses                                                              75,954        87,144         55,974
  Administrative expenses                                                               27,948        41,745         34,583
  Provision for doubtful accounts                                                        7,843         9,001          3,784
  Fair value adjustment for derivative instruments                                       5,530         8,248            ---
  Depreciation and amortization of leasing equipment                                    93,538        79,678         66,075
  Losses for investments accounted for under the equity method                           6,603           804            598
  Other (income)/expense, net                                                            1,131        (9,798)         1,553
  Interest expense                                                                     108,345        98,270         87,809
  Interest income                                                                       (4,610)       (9,439)       (17,237)
                                                                                       -------       -------        -------
                                                                                       322,282       305,653        233,139
                                                                                       =======       =======        =======
Income before minority interest income/(expense), (benefit)/provision for income
  taxes and cumulative effect of change in accounting principle                          4,842        33,065         54,414
MINORITY INTEREST INCOME/(EXPENSE), NET                                                 (1,846)          439           (807)
                                                                                       -------       -------        -------
Income before (benefit)/provision for income taxes and cumulative effect of
  change in accounting principle                                                         2,996        33,504         53,607
(BENEFIT)/PROVISION FOR INCOME TAXES                                                    (1,393)        5,400          9,567
                                                                                       -------       -------        -------
Income before cumulative effect of change in accounting principle                        4,389        28,104         44,040
Cumulative effect of change in accounting principle, net of applicable
  taxes of $440                                                                            ---           ---            660
                                                                                       -------       -------        -------
NET INCOME                                                                              $4,389       $28,104        $44,700
                                                                                       =======       =======        =======
INCOME PER SHARE
BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE:
     Basic                                                                               $0.16         $1.03          $1.61
                                                                                       =======       =======        =======
     Diluted                                                                             $0.15         $0.97          $1.61
                                                                                       =======       =======        =======
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE:
     Basic                                                                                 ---           ---          $0.02
                                                                                       =======       =======        =======
     Diluted                                                                               ---           ---          $0.02
                                                                                       =======       =======        =======
NET INCOME PER SHARE:
     Basic                                                                               $0.16         $1.03          $1.63
                                                                                       =======       =======        =======
     Diluted                                                                             $0.15         $0.97          $1.63
                                                                                       =======       =======        =======
WEIGHTED AVERAGE SHARES OUTSTANDING (in thousands):
     Basic                                                                              27,360        27,417         27,421
                                                                                       =======       =======        =======
     Diluted                                                                            29,202        28,973         27,426
                                                                                       =======       =======        =======

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

INTERPOOL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000(dollars and shares in thousands)

`Accum.
                              Preferred Stock      Common Stock    Additiona                           Other
                              ---------------      ------------       Paid-                             Comp      Comp.
                                         Par                 Par       in      Treasury   Retained     Income     Income
                              Shares    Value     Shares    Value    Capital     Stock    Earnings     (Loss)     (Loss)
                              ------    -----     ------    -----    -------     -----    --------     ------     ------
BALANCE, December 31, 1999
  originally reported            ---     $---     27,580     $28    $124,182   $(1,170)   $177,612      $713
Beginning Balance
  Adjustments (See Note 2-
  Restatement of Previously
  Issued Financial Statements)   ---      ---        ---     ---         ---       ---      (1,954)      ---
                                 ---      ---        ---     ---         ---       ---      -------      ---
BALANCE, January 1, 2000
  (Unaudited and Restated)       ---      ---     27,580      28     124,182    (1,170)    175,658       713
Net income (Restated)            ---      ---        ---     ---         ---       ---      44,700       ---      $44,700
Other comprehensive income       ---      ---        ---     ---         ---       ---         ---       521          521
                                                                                                                      ---
Comprehensive income
  (Restated)                                                                                                      $45,221
Cash dividends declared:
  Common stock, $0.15 per
  share                          ---      ---        ---     ---         ---       ---      (4,113)      ---
                                 ---      ---        ---     ---         ---       ---      -------      ---
BALANCE, December 31,
  2000(Restated)                 ---      ---     27,580      28     124,182    (1,170)    216,245     1,234
Net Income (Restated)            ---      ---        ---     ---         ---       ---      28,104       ---      $28,104
Adoption of FAS 133-
  Cumulative effect through
  December 31, 2000
  (Restated)                     ---      ---        ---     ---         ---       ---         ---    (6,578)      (6,578)
Other comprehensive loss
  (Restated)                     ---      ---        ---     ---         ---       ---         ---    (4,563)      (4,563)
Comprehensive income                                                                                              -------
  (Restated)                                                                                                      $16,963
                                                                                                                  =======
Purchase of 58,100 shares of
  treasury stock                 ---      ---        ---     ---         ---      (929)        ---       ---
Cash dividends declared:
  Common stock, $0.1925 per
  share                          ---      ---        ---     ---         ---       ---      (5,284)      ---
                                 ---      ---        ---     ---         ---       ---      -------      ---
BALANCE, December 31,
  2001(Restated)                 ---      ---     27,580      28     124,182    (2,099)    239,065    (9,907)
Net Income                       ---      ---        ---     ---         ---       ---       4,389       ---       $4,389
Other comprehensive loss         ---      ---        ---     ---         ---       ---         ---   (15,091)     (15,091)
                                                                                                                 --------
Comprehensive loss                                                                                               $(10,702)
                                                                                                                 =========
Purchase of 9,300 shares of
  treasury stock                 ---      ---        ---     ---         ---      (130)        ---       ---
Capital contribution by
  officers and directors         ---      ---        ---     ---       1,983       ---         ---       ---
Cash dividends declared:
  Common stock, $.2275 per
  share                          ---      ---        ---     ---         ---       ---      (6,227)      ---
                                 ---      ---        ---     ---         ---       ---      -------      ---
BALANCE, December 31,
  2002                           ---     $---     27,580     $28    $126,165   $(2,229)   $237,227  $(24,998)
                                 ===     ====     ======     ===    ========   ========   ========  =========

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

INTERPOOL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000(dollars in thousands)

`2002          2001             2000
                                                                                       ----          ----             ----
                                                                                                  (Restated)       (Restated)

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                                           $  4,389     $  28,104       $  44,700
Adjustments to reconcile net income to net cash provided by operating activities --
  Depreciation and amortization                                                       101,007        88,565          70,691
  Accrued losses on business transferred under contractual agreement                   13,780             -               -
  (Benefit)/provision for deferred income taxes                                        (3,118)        3,502           5,866
  Loss on sale of leasing equipment                                                     4,257         1,223           2,198
  Loss/(gain) on sale of marketable securities                                             30             -             (11)
  Gain on sale of assets held for sale                                                      -        (1,774)              -
  Gain on sale of land held for sale                                                   (4,766)            -               -
  Provision for uncollectible accounts                                                  7,843         9,001           3,784
  Gain on retirement of debt                                                           (1,118)         (930)         (1,400)
  Cumulative effect of change in accounting principle                                       -             -          (1,100)
  Fair value adjustment for derivative instruments                                      5,530         8,248               -
  Losses on investments accounted for under the equity method                           6,603           804             598
  Sale (purchase) of assets held for sale                                                   -       291,587        (273,571)
  Other, net                                                                          (14,290)      (17,538)         (7,463)
                                                                                      -------       -------         -------
          Net cash provided by (used for) operating activities                        120,147       410,792        (155,708)
                                                                                      -------       -------         -------

CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of leasing equipment                                                     (191,938)     (201,370)       (198,176)
Proceeds from dispositions of leasing equipment                                        12,041        15,635          83,939
Proceeds from sale of land                                                              7,955             -               -
Investment in direct financing leases                                                 (64,088)     (126,792)        (88,618)
Cash collections on direct financing leases, net of income
  recognized of $36,246, $26,499 and $23,845, respectively                             59,749        65,298          76,581
Purchase of marketable securities                                                      (1,494)         (498)              -
Sales and matured marketable securities and other investing activities                    574             -             107
Investment in and advances to subsidiary                                                  765             -               -
Acquisitions, net of cash acquired                                                          -             -        (399,797)
                                                                                      -------       -------         -------
          Net cash used for investing activities                                     (176,436)     (247,727)       (525,964)
                                                                                      -------       -------         -------

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of debt                                                      1,227,406       146,315         597,504
Payment of long-term debt and capital lease obligations                            (1,023,645)     (237,292)       (113,859)
Borrowings of revolving credit lines                                                   47,000       238,992         237,737
Repayment of revolving credit lines                                                  (121,846)     (358,816)        (86,226)
Purchase of treasury stock                                                               (130)         (929)              -
Dividends paid                                                                         (5,643)       (4,799)         (4,113)
                                                                                      -------       -------         -------

Net cash provided by (used for) financing activities                                  123,142      (216,529)        631,043
                                                                                      -------       -------         -------

Net increase (decrease) in cash and short-term investments                            $66,853      $(53,464)       $(50,629)

CASH AND SHORT-TERM INVESTMENTS, beginning of period                                  103,760       157,224         207,853
                                                                                      -------       -------         -------

CASH AND SHORT-TERM INVESTMENTS, end of period                                       $170,613      $103,760        $157,224
                                                                                      =======       =======         =======

Supplemental schedule of non-cash financing activities:

Assumption of debt in connection with sale of assets held for sale                         $-       $58,037              $-
Transfer of leasing equipment to assets held for sale                                      $-            $-         $62,009
Increase in minority interest in consolidated subsidiary from contribution of
equipment                                                                                  $-       $26,326              $-

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

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 ("US GAAP").

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 leasing and computer equipment leasing.
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 freight rail
cars. 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, as well as major U.S. railroads. Equipment is purchased directly or
acquired through conditional sales contracts and lease agreements, many of which
qualify as capital leases.

The Company's container leasing operations are conducted through
our subsidiary, Interpool Limited, a Barbados corporation. Profits of Interpool
Limited from container leasing operations are exempt from federal taxation in
the United States. These profits are subject to Barbados tax at rates that are
substantially lower than the applicable rates in the United States.

The Company's computer leasing segment consisted of two majority
owned subsidiaries, Microtech Leasing Corporation ("Microtech") and Personal
Computer Rental Corporation ("PCR"). During the third quarter of 2001, the
Company adopted a plan to exit this segment that included i) acquiring the
remaining ownership interest in Microtech and terminating its operations, and
ii) selling the Company's ownership interest in PCR. As of December 31,
2002, the Company is continuing to liquidate the assets of Microtech. PCR's
financial results deteriorated throughout 2002 and PCR ceased active operations
and began to liquidate in 2003. Notwithstanding its plan to discontinue the
operations of Microtech, such operations are reported on a continuing basis. See
Note 9 to the Consolidated Financial Statements.

Beginning June 27, 2002, the Company's consolidated financial
statements include Container Applications International, Inc. ("CAI"), which was
previously accounted for under the equity method of accounting. The Company owns
a 50% common equity interest in CAI. (See Note 15 for further information
regarding CAI.)

Basis of consolidation--

The Company's consolidated financial statements are prepared in
accordance with U.S. GAAP. The consolidated financial statements include the
accounts of the Company and subsidiaries more than 50% owned or otherwise
controlled by the Company. 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/(losses) of the
subsidiaries.

In connection with certain investments in which the Company does
not own a majority interest or otherwise control, or have the ability to assert
significant influence over the investee, these investments are accounted for
using the equity method of accounting. The Company's investment in its equity
method investees is included in other assets.

Goodwill--

On June 29, 2001, the FASB approved its proposed SFAS No. 142,
Goodwill and Other Intangible Assets("SFAS 142"). SFAS 142 requires that
goodwill and intangible assets with indefinite useful lives no longer be
amortized, but instead be tested for impairment at least annually in accordance
with the provisions of SFAS 142. SFAS 142 also requires that intangible assets
with definite useful lives be amortized over their respective estimated useful
lives to their estimated residual value, and reviewed for impairment in
accordance with SFAS No. 144, "Accounting for the Impairment of Long-Lived
Assets to Be Disposed Of" ("SFAS 144"). Goodwill acquired in business
combinations completed before July 1, 2001 was amortized through the end of
2001.

Goodwill represents the excess of costs over the fair value of
net assets acquired and was amortized through December 31, 2001 using the
straight-line method over twenty years. Goodwill amortization for the years
ended December 31, 2001 and 2000 totaled $727 and $755, respectively which is
included in other (income)/expense, net in the accompanying consolidated
statements of income. Commencing January 1, 2002, as a result of adopting SFAS
142, goodwill is no longer amortized but is reviewed for impairment. During the
first quarter 2002, the Company performed a transitional goodwill impairment
test as required and determined that no goodwill impairment existed at January
1, 2002, therefore, no adjustment to the goodwill balance was required at that
time. During December 2002 the Company conducted its annual goodwill impairment
test. The testing disclosed that at December 31, 2002 the fair value of an
investment accounted for using the equity method included in the domestic
intermodal leasing segment was below its carrying value. As a result, the
Company's basis for this equity method investment was written down by $1,095 to
its estimated fair market value. Total goodwill recorded at December 31, 2002
and 2001 is $8,558 and $9,653, respectively and is included in other assets on
the accompanying Consolidated Balance Sheet. This goodwill is included in total
assets within the Domestic Intermodal Leasing segment. If SFAS 142 had been in
effect for the years ended December 31, 2001 and 2000, net income would have
increased by $437 and $453, (net of tax) respectively. The basic and diluted net
income per share would have been increased by $.02 in both 2001 and 2000.

Translation of foreign currencies--

The Company has determined that the U. S. dollar is its
functional currency for each of its overseas operations therefore, all gains and
losses resulting from translating foreign currency transactions into the
functional currency are included in income.

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. Rental income on operating leases is
recognized on the accrual basis based on the contractual agreement with the
lease customer.

Maintenance and repair expense--

Maintenance and repair expenses are accounted for under the
direct expense method; thus these amounts are charged to operating expenses when
incurred.

Allowance for doubtful accounts--

The adequacy of our allowance for doubtful accounts is
periodically reviewed based on the risk profile of the receivables, credit
quality indicators such as the level of past-due amounts and economic
conditions, as well as the value of underlying collateral. Changes in economic
conditions or other events may necessitate additions or deductions to the
allowance for doubtful accounts. The allowance for doubtful accounts is intended
to provide for losses inherent in the accounts and notes receivable, and
requires the application of estimates and judgments as to the outcome of
collection efforts and the realization of collateral, among other things. The
Company believes our allowance for doubtful accounts is adequate to provide for
credit losses inherent on our accounts and notes receivable.

Non-performing receivables--

Non performing receivables reflect both operating lease
receivables and finance lease receivables which the Company considers impaired.
When evaluating its operating and finance lease receivables for impairment, the
Company considers, among other things, the level of past-due amounts of the
respective receivable, the borrower's financial condition, credit quality
indicators of the borrower, and the value of underlying collateral.

Stock-Based compensation--

Stock option plans are accounted for in accordance with SFAS No.
148, Accounting for Stock-Based Compensation ("SFAS 148"). This Statement
amends SFAS No. 123, Accounting for Stock-Based Compensation ("SFAS
123"), which allows for the retention of principles within Accounting Principles
Board Opinion 25, Accounting for Stock Issued to Employees ("APB 25"). 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 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:

`Year Ended December 31,
                                                       -------------------------------------------
                                                                         2001             2000
                                                         2002          Restated         Restated
                                                         ----          --------         --------

Net income, as reported                                 $4,389          $28,104          $44,700
Deduct: Total stock-based employee compensation
expense determined under fair value based
method for all awards, net of related tax effects         (112)             (72)             (20)
                                                        ------          -------          -------
Pro forma net income                                    $4,277          $28,032          $44,680
                                                        ======          =======          =======

Earnings per share:
Basic-as reported                                        $0.16            $1.03            $1.63
                                                          ====             ====             ====
Basic-pro forma                                          $0.16            $1.02            $1.63
                                                          ====             ====             ====
Diluted-as reported                                      $0.15            $0.97            $1.63
                                                          ====             ====             ====
Diluted-pro forma                                        $0.15            $0.97            $1.63
                                                          ====             ====             ====`

This pro forma impact only takes into account options granted
since January 1, 1995. The average fair value of options granted during 2002 was
$6.66. The fair value was estimated using the Black-Scholes Option pricing model
based on the market price at Grant Date of $13.73 and the following assumptions:
risk-free interest rate of 3.5%, expected life of 7 years, volatility of 50% and
dividend yield of 1.31%.

The 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. No
options were granted by the Company in 2001.

Insurance receivables--

The Company has maintained insurance coverage in the event of a
lessee's insolvency, bankruptcy or default. Amounts recorded as an insurance
claim receivable are included in other receivables, net in the Consolidated
Balance Sheets and are limited to those amounts that are probable of collection
and include only incurred costs and losses related to the insurable event.
Amounts recorded as insurance claim receivable are recorded in other
(income)/expense, net in the Consolidated Statements of Income. Upon collection
of the receivable from the insurance carriers, any amounts in excess of or less
than the receivable recorded would be recorded as other (income)/expense, net in
the Consolidated Statements of Income.

Leasing equipment--

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

`Dry freight standard containers              12.5 years
          Chassis                                      17.5 to 22.5 years
          Other                                        3 to 15 years`

Effective October 1, 2000, in connection with information
obtained from independent appraisals completed for the acquisition of
Transamerica's chassis fleet in October 2000, the Company revised its estimate
of the depreciation life of chassis to 17.5 years in order to establish the same
life for all chassis whether initially purchased by the Company or by
Transamerica. These assets had been previously depreciated over periods that
ranged between 15 and 20 years. The effect of this change was to reduce
depreciation expense by $947 for the year ended December 31, 2000 which resulted
in a $.03 increase in the basic and diluted net income per share.

In March 2002, the Company completed a $500,000 chassis
securitization facility. At that time, independent appraisals indicated a
chassis useful life of between 20 and 25 years. As a result, effective April 1,
2002, the Company has further revised its estimate of the useful life of certain
of its chassis from 17.5 years to 22.5 years. The effect of this change was to
decrease depreciation expense by $6,866 ($4,120 net of tax) for the year ended
December 31, 2002 which resulted in a $0.15 and $0.14 increase in the basic and
diluted net income per share, respectively. The valuations and in-depth review
concluded that no change was required to the residual value of the Company's
chassis. Annually, the effect of this change in useful lives is to decrease
depreciation expense by approximately $9,155.

CAI, the Company's 50% owned subsidiary, had an independent
valuation performed on its container fleet to determine the useful life of the
containers as well as the estimated market value at the end of their useful
life. As a result, effective April 1, 2002, the Company has adjusted the useful
life for all of its containers to 12.5 years (previously 12.5 to 15 years) and
has changed its residual values to the estimated market value of the containers
as determined by the appraisal. The effect of this change for the year ended
December 31, 2002 was to decrease depreciation expense of the Company by $489.
In addition, the Company recognized additional depreciation recorded by CAI
prior to June 27, 2002 of $626 that was recorded by the Company in loss for
investments accounted for under the equity method. The net effect of these
changes increased net income by $51, considering the Company's 50% common equity
interest in CAI.

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

In August 2001, the FASB approved its proposed SFAS No. 144,
Accounting for the Impairment or Disposal of Long Lived Assets ("SFAS
144"). SFAS 144 addresses financial accounting and reporting for the impairment
or disposal of long-lived assets. SFAS 144 requires that long-lived assets be
reviewed for impairment whenever events or changes in circumstances occur
measured by a comparison of the carrying amount of an asset to undiscounted
future net cash flows expected to be generated by the asset. If the carrying
amount of an asset exceeds it estimated future undiscounted cash flows, an
impairment charge is recognized for the amount by which the carrying amount of
the asset exceeds the fair value of the asset. SFAS 144 requires companies to
separately report discontinued operations and extends that reporting to a
component of an entity that either has been disposed of (by sales, abandonment,
or in a distribution to owners) or is classified as held for sale. Assets to be
disposed are reported at the lower of the carrying amount or fair value less
costs to sell. The Company adopted SFAS 144 on January 1, 2002.

During the first quarter of 2002, the Company evaluated the
carrying value of its long-lived assets as prescribed by SFAS 144. The adoption
of this statement in the first quarter of 2002 did not result in an adjustment
to our consolidated financial statements. At December 31, 2002, the Company
performed a review of its container and chassis fleet in order to determine
whether these assets are impaired in accordance with SFAS 144. The container
fleet is reported within the container leasing segment, while the chassis are
reported within the domestic intermodal equipment segment. This review indicated
that there was no impairment to the fleet with the exception of a small portion
of the fleet that was idle or that had specific design flaws. The Company
performed a review of this equipment to determine whether the units would be
repaired and returned to service or sold based upon the best economic
alternative for the Company. This determination was based on the condition of
the unit, its location and the resale market within that location. All units
identified for sale were then written down to net realizable value. For the year
ended December 31, 2002, the impairment loss on this equipment was $5,715 of
which $4,065 is included in depreciation expense and $1,650 is included in lease
operating expense on the accompanying consolidated Statement of Income.

During the year ended December 31, 2002, CAI recognized an
impairment loss on certain containers including containers in its operating
inventory that were damaged and for units in its held for sale inventory. The
loss was calculated by comparing the equipment's net book value to the estimated
realizable value of the equipment. The total impairment loss recorded by CAI was
$4,231. The Company's 50% share of this loss is $2,115 of which $1,732 was
recognized by CAI before June 27, 2002 and was recorded by the Company in loss
for investments accounted for under the equity method. In addition $766 of
additional depreciation was recognized by CAI after June 27, 2002 which reduced
income before taxes by $383 after taking into account the Company's 50% minority
interest adjustment.

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 in the off-balance
sheet direct finance lease securitization completed in March 1999 as an
available-for-sale security, which is included in "Other Investment Securities"
in the accompanying consolidated balance sheets. Impairment losses of $134 for
the year ended December 31, 2002 were recorded and included in the accompanying
consolidated income statements based upon management's analysis of projected
cash flows of the underlying direct finance lease receivables in the
securitization trust.

During the year ended December 31, 2002, sales of
available-for-sale securities resulted in proceeds of $574, gross gains of $5,
and gross losses of $35. During the year ended December 31, 2001, no sales of
available-for-sale securities took place. Sales of available-for-sale securities
for the year ended December 31, 2000 resulted in proceeds of $107 and gross
gains of $11.

The amortized cost and estimated fair value of available for
sale securities as of December 31, 2002 and 2001 are as follows:

`Gross Unrealized
                                         Amortized      Holding      Holding      Estimated
                                           Cost          Gains        Losses     Fair Value
                                           ----          -----        ------     ----------
     2002
     ----
     Other Investment Securities          $10,319         $---        $---         $10,319
     Marketable Securities                  1,553          ---         (86)          1,467
                                            -----         ----        -----          -----
                                          $11,872         $---        $(86)        $11,786
                                          =======         ====        =====        =======
     2001 (Restated)
     ---------------
     Other Investment Securities          $15,348         $304        $---         $15,652
     Marketable Securities                    663           42         (67)            638
                                              ---           --         ----            ---
                                          $16,011         $346        $(67)        $16,290
                                          =======         ====        =====        =======`

Comprehensive income--

Comprehensive income consists of net income or loss for the
current period 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 other comprehensive income (loss) is as
follows:

`Before Tax      Tax       Net of
Year Ended December 31, 2002                                 Amount      Effect    Tax Amount
                                                             ------      ------    ----------
Unrealized holding losses arising during the period:
Marketable securities (1)                                      $(40)        $14         $(26)
Other investment securities (2)                                (304)         15         (289)
Cumulative foreign currency translation adjustment              (66)         23          (43)
Swap agreements                                             (23,436)      8,703      (14,733)
                                                            --------      -----      --------
                                                           $(23,846)     $8,755     $(15,091)
                                                           =========     ======     =========

(1)  Amounts are net of losses on sales of marketable securities of $30
     (before income tax effect of $12) recognized in the income statement.
(2)  Amounts are net of impairments of $134 (before income tax effect of $5)
     recognized in the income statement.

Year Ended December 31, 2001 (restated)
Unrealized holding losses arising during the period:
Marketable securities                                          $(29)        $11         $(18)
Other investment securities                                  (1,005)         50         (955)
Swap agreements (3)                                         (12,363)      2,195      (10,168)
                                                            --------      -----      --------
                                                           $(13,397)     $2,256     $(11,141)
                                                           =========     ======     =========

(3)  Includes $9,012 (before income tax effect of $2,434) relating to the
     cumulative effect of adopting SFAS 133.

Year Ended December 31, 2000 (restated)
Unrealized holding gains arising during the period:
   Marketable securities (4)                                    $14         $(5)           $9
   Other investment securities                                  539         (27)          512
                                                                ---         ----          ---
                                                               $553        $(32)         $521
                                                               ====        =====         ====

(4)  Amounts are net of gross gains on sales of marketable securities of $11
     (before income tax effect of $4) recognized in the income statement.`

The components of accumulated other comprehensive loss, net of
taxes, are as follows:

`December 31,
                                                               ------------------------------
                                                                                     2001
                                                                      2002         Restated
                                                                      ----         --------
Marketable securities                                                $(54)            $(28)
Other investment securities                                            ---              289
Cumulative foreign currency translation adjustment                    (43)              ---
Swap agreements                                                   (24,901)         (10,168)
                                                                  --------         --------
                                                                 $(24,998)         $(9,907)
                                                                 =========         ========`

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 $898,037 and $863,060, respectively, at December 31,
2002. The carrying amount and estimated fair value of the Company's debt and
capital securities is $1,061,296 and $1,017,062, respectively, at December 31,
2001.

On January 1, 2001, the Company adopted SFAS 133. The carrying
amount of the interest rate swap contracts approximated fair value as of
December 31, 2002 and 2001.

Concentration of credit risk--

At December 31, 2002 approximately 48% of accounts receivable
and notes receivable and 72% of the net investment in direct financing leases
were from customers outside of the United States. At December 31, 2001,
approximately 25% of accounts receivable and notes receivable and 69% of the net
investment in direct financing leases were from customers outside of the United
States. The majority of the increase in customers outside the United States is a
result of consolidating CAI as of June 27, 2002. Excluding CAI, approximately
26% of accounts receivable and notes receivable and 73% of the net investment in
direct financing leases were from customers outside the United States at
December 31, 2002.

In 2002, 2001 and 2000 the Company's top 25 customers
represented approximately 71%, 69% and 67%, respectively, of its consolidated
billings, with no single customer accounting for more than 8.2%.

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 has 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)
                                                                 2002(2)     2001       2000
                                                                 -------     ----       ----
     Average common shares outstanding                           27,360     27,417     27,421
     Plus: Dilutive stock options (1)                             1,842      1,556          5
                                                                  -----      -----          -
     Average common shares outstanding assuming dilution         29,202     28,973     27,426
                                                                 ======     ======     ======

     (1)  Issuable primarily under stock option plans. (4,474,001 options to acquire common
          shares are not included in 2000 because they were antidilutive.)

     (2)  The convertible redeemable subordinated debentures issued by the Company on
          December 27, 2002 had no effect on diluted net income per share in 2002.`

Adoption of New Accounting Standard--

In April 2002, the FASB issued SFAS No. 145 ("SFAS 145"). This
Statement rescinds SFAS No. 4, Reporting Gains and Losses from Extinguishment
of Debt, and an amendment of that Statement, SFAS No. 64, Extinguishments
of Debt Made to Satisfy Sinking-Fund Requirements. This Statement also
rescinds SFAS No. 44, Accounting for Intangible Assets of Motor Carriers.
This Statement amends SFAS No. 13, Accounting for Leases, to eliminate an
inconsistency between the required accounting for sale-leaseback transactions
and the required accounting for certain lease modifications that have economic
effects that are similar to sale-leaseback transactions.  This Statement
also amends other existing authoritative pronouncements to make various
technical corrections, clarify meanings, or describe their applicability under
changed conditions. The statement is effective for the fiscal year beginning
January 1, 2003, with early adoption permitted. The Company adopted the
provisions of the statement on October 1, 2002. Extraordinary gains on the
retirement of certain debt of $671 (net of $447 of tax), $558 (net of $372 of
tax) and $840 (net of $560 of tax) for the years ended December 31, 2002, 2001,
and 2000 were reclassified into other (income)/expense, net and recorded on a
pre-tax basis.

Prospective accounting pronouncements--

In June 2002, the FASB issued SFAS No. 146, Accounting for
Costs Associated with Exit or Disposal Activities ("SFAS 146"). SFAS 146
requires that a liability for costs associated with exit or disposal activities
be recognized when the liability is incurred. Prior to SFAS 146, U.S. GAAP
provided for the recognition of such costs at the date of management's
commitment to an exit plan. In addition, SFAS 146 requires that the liability be
measured at fair value and be adjusted for changes in estimated cash flows. The
provisions of the new standard are effective for exit or disposal activities
initiated after December 31, 2002. It is not expected that SFAS 146 will
materially affect the Company's consolidated financial statements.

In January 2003, the FASB issued FASB Interpretation No. 46,
Consolidation of Variable Interest Entities("FIN 46"). FIN 46 clarifies
the application of Accounting Research Bulletin No. 51, Consolidated
Financial Statements ("ARB 51"), to certain entities in which equity
investors do not have the characteristics of a controlling financial interest or
do not have sufficient equity at risk for the entity to finance its activities
without additional subordinated financial support from other parties. ARB 51
requires that an enterprise's consolidated financial statements include
subsidiaries in which the enterprise has a controlling financial interest. That
requirement usually has been applied to subsidiaries in which an enterprise has
a majority voting interest. The voting interest approach is not effective in
identifying controlling financial interests in entities that are not
controllable through voting interests or in which the equity investors do not
bear the residual economic risk. FIN 46 explains how to identify variable
interest entities and how an enterprise assesses its interests in a variable
interest entity to decide whether it is its primary beneficiary and therefore is
required to consolidate that entity. FIN 46 also addresses the initial valuation
of the assets and liabilities to be consolidated, the treatment of any gain or
loss resulting from the initial measurement and disclosure requirements for the
primary beneficiary. All entities with variable interest in variable interest
entities created after January 31, 2003 shall apply the provisions of FIN 46
immediately. Public entities with a variable interest in a variable interest
entity created before February 1, 2003 shall apply the provisions of this
interpretation no later that the first interim or annual reporting period
beginning after December 15, 2003. On December 24, 2003, FASB issued an
Interpretation which clarified and modified FASB Interpretation No. 46. The
Company is in the process of analyzing FIN 46, as modified. Based upon its
preliminary analysis, it would appear the Company may be required to
deconsolidate its investment in Interpool Capital Trust. As a result,
Company-obligated Mandatorily Redeemable Preferred Securities in Subsidiary
Grantor Trusts would be eliminated and replaced by an amount reported as debt in
the Consolidated Financial Statements. Such changes are not expected to have any
significant impact on the Company's financial condition or results of
operations.

In May 2003, the FASB issued SFAS No. 150, Accounting for
Certain Financial Instruments with Characteristics of Both Liabilities and
Equity ("SFAS 150"). This statement requires that certain financial
instruments that, under previous guidance, issuers could account for as equity,
be classified as liabilities in statements of financial position. Almost all
instruments within the scope of this statement are initially measured at fair
value with subsequent changes in fair value flowing through the income
statement. One exception is mandatorily redeemable instruments. These
instruments are initially measured at the present value of the amount to be paid
at the earliest settlement date and adjusted to their redemption/settlement
amount using the implicit interest rate at inception. Most of the guidance in
SFAS 150 is effective for financial instruments entered into or modified after
May 31, 2003, and otherwise is effective at the beginning of the first interim
period beginning after June 15, 2003. On November 7, 2003, the provisions of
SFAS 150, relating to mandatorily redeemable non-controlling interest, were
deferred indefinitely. It is not expected that SFAS 150 will materially affect
our consolidated financial statements.

Use of estimates--

The preparation of financial statements in conformity with
accounting principles generally accepted in the United States 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.

Reclassifications--

Certain reclassifications have been made to the 2000 and 2001
amounts in order to conform to the 2002 presentation. In addition, certain
amounts included in the previously issued 2000 and 2001 financial statements
have been restated as described in Note 2 to the Consolidated Financial
Statements.

|(2) | Restatement of Previously Issued Financial Statements
|--- | -----------------------------------------------------

The Company determined that it misinterpreted or misapplied
generally accepted accounting principles in certain circumstances. As a result,
the Company has restated the audited consolidated financial statements for the
years ended December 31, 2001 and 2000. In addition, the Company recorded a
reduction of $1,954 to opening retained earnings at January 1, 2000.

The following tables set forth the effects of the restatement
adjustments and the adoption of SFAS 145 in 2002 (which changes the income
statement classification of the early extinguishment of debt) on income before
tax and change in accounting principles, net income and the basic and diluted
earnings per share for the years ended December 31, 2001 and 2000. The
restatement adjustments are discussed in the "Description of Restatement Items"
section following the tables below.

`Year Ended December 31, 2001
                                                                        ----------------------------
                                                       Income before
                                                      taxes and change                     Income Per      Income Per
                                                       in accounting          Net            Share           Share
                                                         principle          Income          (Basic)        (Diluted)
                                                         ---------          ------          -------        ---------

Previously Reported                                       $49,723           $42,480           $1.55            $1.47

Lease accounting                                           (1,817)           (2,023)          (0.07)           (0.07)
Residual guarantees                                         2,150             1,290            0.05             0.05
Swap accounting                                            (6,435)           (4,320)          (0.16)           (0.15)
Income on piggyback trailer fleet                             (26)              (16)          (0.00)           (0.00)
Intercompany transactions with CAI                         (1,290)           (1,121)          (0.04)           (0.04)
Reduction in carrying value of containers                      38                36            0.00             0.00
Deferred tax asset valuation                                    0              (924)          (0.03)           (0.03)
Intercompany account reconciliations                       (1,305)           (1,259)          (0.05)           (0.04)
Accounting for insurance claim                             (5,125)           (4,497)          (0.16)           (0.16)
Changes in accruals and estimates
  Bonus accrual                                              (614)             (369)          (0.01)           (0.01)
  Estimated repair costs incurred on equipment               (728)             (437)          (0.02)           (0.02)
  Other                                                       663               565            0.02             0.02
                                                       ----------------------------------------------------------------
Net restatements                                          (14,489)          (13,075)          (0.47)           (0.45)
                                                       ----------------------------------------------------------------

As restated, before reclassifications of
extraordinary items and discontinued
operations                                                 35,234            29,405            1.08             1.02

Change in accounting for adoption of SFAS 133 in
  2001                                                        ---              (833)          (0.03)           (0.03)
Elimination of discontinued operations
  classification and gain on sale of PCR                   (2,660)             (468)          (0.02)           (0.02)
Adoption in 2002 of SFAS 145 on retirement of
  debt                                                        930               ---          ---              ---
                                                       ----------------------------------------------------------------
As restated                                               $33,504           $28,104           $1.03            $0.97
                                                       ================================================================


                                                                        Year Ended December 31, 2000
                                                                        ----------------------------
                                                       Income before
                                                      taxes and change                     Income Per      Income Per
                                                       in accounting          Net            Share           Share
                                                         principle          Income          (Basic)        (Diluted)
                                                         ---------          ------          -------        ---------

Previously Reported                                       $49,975           $44,456           $1.62            $1.62

Lease accounting                                             (116)              133            0.01             0.01
Residual guarantees                                           525               315            0.01             0.01
Income on piggyback trailer fleet                          (1,448)             (869)          (0.03)           (0.03)
Intercompany transactions with CAI                           (762)             (603)          (0.02)           (0.02)
Reduction in carrying value of containers                      38                36            0.00             0.00
Deferred tax asset valuation                                    0              (584)          (0.02)           (0.02)
Intercompany account reconciliations                        1,178             1,137            0.04             0.04
Changes in accruals and estimates
  Bonus accrual                                               614               369            0.01             0.01
  Estimated repair costs incurred on equipment                340               204            0.01             0.01
  Other                                                       257               106            0.00             0.00
                                                       ----------------------------------------------------------------
Net restatements                                              626               244            0.01             0.01
                                                       ----------------------------------------------------------------

As restated, before reclassifications of
extraordinary items and discontinued
operations                                                 50,601            44,700            1.63             1.63

Elimination of discontinued operations
classification                                              1,606               ---          ---              ---
Adoption in 2002 of SFAS 145 on retirement of
debt                                                        1,400               ---          ---              ---

                                                       ----------------------------------------------------------------
As restated                                               $53,607           $44,700           $1.63            $1.63
                                                       ================================================================`

The significant components of this reduction are described in
the "Description of Restatement Items" section below.

Description of Restatement Items

Lease Accounting

During 2000 and 2001, the Company billed customers under four
direct finance leases that required a down payment from the customer. The value
of equipment leased to these customers totaled $7,055 while the initial down
payment called for under the leases amounted to $1,899. These down payments were
incorrectly recorded as revenue when collected rather than as a reduction to the
net investment in the direct finance leases. This treatment had the effect of
overstating revenue in the period that the down payments were made by the
customer and understating revenue for the remaining periods of the leases. The
effect was to overstate pre tax income for the years ended December 31, 2001 and
2000 by $1,255 and $179, respectively.

After discovering the aforementioned leases, the Company
conducted a review of all of its active leases and determined that a number of
leases to customers were incorrectly classified as operating leases when these
leases met the criteria for capitalization as direct finance leases under the
provisions of SFAS 13,
Accounting for Leases. As a result, the Company has reduced opening
retained earnings at January 1, 2000 by $617 and pre tax income earned under the
terms of these leases by $756 for the year ended December 31, 2000. In addition,
the Company has increased pre tax income by $246 for the year ended December 31,
2001.

The Company determined that the system used to account for its
finance lease portfolio incorrectly calculated the income earned on these
leases. The Company recalculated the interest recorded on its lease portfolio
which has resulted in an increase to opening retained earnings at January 1,
2000 of $1,106, as well as an increase to pretax income of $819 for the year
ended December 31, 2000 and a decrease of $808 for the year ended December 31,
2001.

The adjustments to leases, as noted above, resulted in increases
in amounts recorded as Investment in Direct Financing Leases of $45,652 and
$46,821 at December 31, 2001 and 2000, respectively. In addition, there was a
reduction in Leasing Equipment, net of Accumulated Depreciation of $45,433 and
$46,947 at December 31, 2001 and 2000, respectively.

Elimination of Discontinued Operations Classification and
Gain on Sale of PCR

During the three months ended September 30, 2001, the Company
adopted a formal plan to dispose of PCR, a 51%-owned subsidiary, and to
discontinue the operations of Microtech after acquiring the remaining 24.5%
ownership interest of this 75.5%-owned subsidiary, and liquidate its lease
portfolio. Within the historical financial statements of the Company, PCR and
Microtech comprised the computer-leasing segment and specialized in the leasing
of microcomputers and related equipment.

As a result of the decision made by the Company, PCR and
Microtech were classified as discontinued operations in the previously reported
Consolidated Financial Statements at December 31, 2001. Pursuant to APB No. 30,
"Reporting the Results of Operations-Reporting the Effects of Disposal of a
Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring
Events and Transactions," the Consolidated Financial Statements and notes
thereto were restated for all comparative periods presented in the December 31,
2001 Consolidated Financial Statements to reflect the decision to discontinue
the computer leasing segment. Accordingly, the assets and liabilities, results
of operations and cash flows of PCR and Microtech were accounted for as
discontinued operations in the previously reported Consolidated Financial
Statements at December 31, 2001 and December 31, 2000.

On December 31, 2001, the Company acquired from the management
of Microtech (the same individuals who manage PCR) the remaining 24.5% ownership
interest in Microtech for $792 in cash, thereby increasing the Company's
ownership in Microtech to 100%.

In addition, on December 31, 2001, the Company completed the
contractual sale of its 51% ownership stake of PCR to an investment group
comprised of the management of PCR. Under the agreement, the Company sold its
share of PCR for $3,200. The purchase price was satisfied through the issuance
of a non-recourse note in the amount of $2,560 and a cash payment of $640
received by the Company on January 2, 2002. This transaction was recorded as a
sale in December 2001 resulting in an after tax gain of $468 included in the
previously reported 2001 Consolidated Financial Statements.

At December 31, 2001, the Company also had a loan due from PCR
in the amount of $3,500 under a long term revolving credit facility which was
due on demand and was secured by substantially all of PCR's assets, subordinated
to the interest of a financial institution which provided PCR an additional line
of credit. The Company was also a guarantor of PCR debts due to parties other
than the Company totaling $5,000.

At the time of closing of the sale of the Company's interest in
PCR, the Company provided a guarantee of an additional line of credit from a
financial institution of up to $3,000 on PCR's behalf. The financial institution
subsequently agreed, at the Company's request, to rescind this guarantee,
retroactive to December 31, 2001. In lieu of the Company's guarantee, effective
December 31, 2001, certain directors and officers of the Company guaranteed an
additional line of credit of up to $3,000 on behalf of PCR. In addition, on
December 31, 2001 the Company had entered into consulting and bonus contracts
with two officers of PCR. Microtech also had a finance lease and other
receivables in the amount of approximately $1,400 due from PCR at December 31,
2001. These transactions and continuing obligations of the Company and its
officers and directors were not considered by the Company when evaluating the
accounting for the PCR transaction at December 31, 2001. These items preclude
the use of sale accounting for this transaction. As a result, classification of
the computer leasing segment as a discontinued operation was inappropriate.
Effective December 31, 2001, the assets and liabilities of PCR are included in
the Consolidated Balance Sheets as assets of business transferred under
contractual agreement and liabilities of business transferred under contractual
agreement, respectively. The assets and liabilities of Microtech are included in
the respective line items on the Consolidated Balance Sheets.

The Consolidated Financial Statements have been restated for the
years ended December 31, 2001 and 2000 to include the results of the computer
leasing segment in net income from continuing operations and to reverse the sale
accounting treatment of the PCR disposition at December 31, 2001. This has
resulted in a reduction of $468 to net income and $2,660 to income before taxes
and change in accounting principle ($2,377, net of tax) for the year ended
December 31, 2001 and an increase of $1,606 to income before taxes and change in
accounting principle for the year ended December 31, 2000. During 2002, the
results of Microtech's activities were included in the Company's results from
continuing operations. In accordance with SEC Staff Accounting Bulletin Topic
5e, the Company has recorded PCR's operating losses generated during 2002 which
are classified in other (income)/expense, net and has correspondingly reduced
PCR's assets included in assets of business transferred under contractual
agreement.

Residual Guarantees

During the year ended December 31, 2000, the Company acquired
certain leasing equipment subject to long term lease agreements and financed the
transaction through sale/leaseback arrangements with financial institutions.
These leases generally called for the Company to guarantee a stated portion of
the residual value at the end of the lease term. During a review of these
leases, it was determined that the Company had been accruing for the full amount
of its residual, rather than for an estimate of the Company's potential payment
under the residual guaranty. As a result, the Company has reduced its provisions
for these guarantees amounting to $1,830 and $504 for the years ended December
31, 2001 and 2000, respectively. These amounts have been reflected in lease
operating expense on the accompanying Consolidated Statements of Income.

In addition, during the review of these leases, the Company
determined that two leases that had been treated as operating leases should have
been classified as finance leases. The reclassification of these leases resulted
in additional pre tax income of $320 and $21 for the years ended December 31,
2001 and December 31, 2000, respectively. The effect of capitalizing these
leases was to increase debt and capital lease obligations by $13,131 and $13,948
at December 31, 2001 and December 31, 2000, respectively. In addition, it
increased leasing equipment, net of accumulated depreciation by $13,472 and
$13,969 at December 31, 2001 and December 31, 2000, respectively.

Swap Accounting and Change in Accounting for Adoption of SFAS
133 in 2001

The Company entered into a swap facility in July 2000 with a
notional value of $149,882 related to its chassis securitization. This facility
qualified for hedge accounting based upon the rules in effect prior to the
Company's adoption of SFAS 133. Upon the adoption of SFAS 133 in January 2001,
the Company believed that the swap would be effective in hedging the underlying
debt and accounted for the swap as a cash flow hedge under SFAS 133. However,
the documentation of the hedging relationship did not exist in 2001 as required
by generally accepted accounting principles and, therefore, the swap should have
been accounted for as a speculative contract until it was terminated in March
2002. The swap had a negative fair value of $6,580 on December 31, 2000 which
was included in accumulated other comprehensive loss at the date of adoption.
This negative value will be amortized over the life of the swap in accordance
with the transition rules set forth in SFAS 133. For the period from January 1,
2001 to March 28, 2002, the date the swap terminated, all changes to the value
of the swap have been reflected in fair value adjustment for derivative
instruments on the accompanying Consolidated Statements of Income.

In connection with the adoption of SFAS 133 on January 1, 2001,
the Company incorrectly applied the transition rules under SFAS 133 and recorded
the cumulative effect of the adoption of SFAS 133 relating to certain swaps
which previously qualified for hedge accounting as an adjustment to net income
rather than accumulated other comprehensive income.

In addition, the Company has re-measured the ineffectiveness
related to a swap and has reclassified this ineffectiveness from accumulated
other comprehensive loss to fair value adjustment for derivative instruments on
the accompanying Consolidated Statements of Income.

The effect of all of the changes described above was to reduce
pre tax income by $6,435 for the year ended December 31, 2001. These changes had
no impact on the previously reported stockholders' equity.

Income on Piggyback Trailer Fleet

Prior to the sale of its piggyback trailer fleet to TIP
Intermodal Services (TIP) in March 2001, the Company estimated the net revenue
earned by its fleet of trailers that were being managed under the terms of
management services agreements with third parties. These estimates were based
upon the historical performance of these trailers and did not reflect the
reduction in the utilization of this equipment and the increase in the repair of
this equipment resulting from a downturn in demand. As a result, the Company has
reduced January 1, 2000 opening retained earnings by $833 and has reduced
revenue by $26 for the year ended December 31, 2001 and $1,448 for the year
ended December 31, 2000. The Company had previously recorded the write off of
the related receivable of $3,254 as an adjustment to the cost of the TIP sale
and related acquisition of the North American Intermodal Division of
Transamerica Leasing Inc. (See Note 7 to the Consolidated Financial Statements.)

Inter-company Transactions with CAI

During the period from 1998 to March 2002, there were several
transactions wherein Interpool acquired equipment, and the related leases, from
CAI on terms that resulted in a profit for CAI.

Prior to June 27, 2002, the Company's investment in CAI was
accounted for under the equity method of accounting. (See Note 15 to the
Consolidated Financial Statements.) The Company failed to eliminate a portion of
inter-company profits in recording its equity portion of the income or loss
incurred by CAI. The elimination of these intercompany transactions resulted in
a reduction to opening retained earnings of $760 at January 1, 2000, and a
reduction to pre tax income of $1,290 and $762 for the years ended December 31,
2001 and 2000, respectively.

Reduction in Carrying Value of Containers

In December 1996, the Company re-acquired certain containers
that had previously been sold by the Company to an investment partnership. The
containers were acquired at a premium to cover losses that had been incurred by
the investors in the partnership and certain other fees paid to those that
arranged the partnership. Officers and directors of the Company held a 3.3%
interest either directly or indirectly in the partnership. These additional
costs were capitalized and the equipment was treated as new for depreciation
purposes. The Company has adjusted the basis of this equipment to the comparable
book value for similar equipment in its fleet. As a result, the Company has
reduced opening retained earnings and leasing equipment, net of accumulated
depreciation at January 1, 2000 by $831. In addition, pre tax income has
increased by $38 for each of the years ended December 31, 2001 and 2000.

Intercompany Account Reconciliations

The Company identified an inter-company account in 2002 that had
not been reconciled at December 31, 2001 or 2000. This reconciliation, when
performed in 2002, resulted in a decrease to pre tax income of $1,305 for the
year ended December 31, 2001 and an increase to pre tax income of $1,178 for the
year ended December 31, 2000.

Accounting for Insurance Claim

In February 2001, the Company demanded return of all of its
equipment on lease to a significant customer based in South Korea. The lessee
subsequently commenced insolvency proceedings and did not return our equipment.
At the time of this insolvency, the Company maintained insurance coverage
against such lessee defaults, and submitted a claim in 2002 to its insurance
carriers seeking to recover the value of the receivables owed by the customer
(to the extent covered by the insurance policies). The claim includes per diem
rental charges for up to one hundred and eighty days after the default date for
equipment not returned by the lessee as well as loss, damage and recovery costs
relating to the equipment on lease that are also billable to the lessee in
accordance with the lease.

In the past, the Company has accounted for this claim under the
assumption that the insurance policy was a guarantee of the lease contract with
the customer in default. The Company, therefore, recorded all amounts billable
to the lessee under the lease contract, to the extent they were deemed to be
collectible from the insurance company, in the periods that they were billable
under the terms of the lease. This resulted in the recognition of lease
revenues, gains on the disposition of equipment and the recovery of costs
related to the default in the periods that they would have been recorded under
the terms of the lease.

As a result of comments made on analogous accounting matters in
December 2003 by representatives of regulatory authorities, the Company reviewed
its accounting for the insurance claim and determined that the insurance policy
should not be treated as a guaranty of the lease because the policy is not
imbedded in the lease contract. Utilizing this approach, the lease and the
insurance policy are accounted for separately. As such, in connection with the
lease, the Company ceased the recognition of lease revenues for amounts billable
to the lessee after the lease default date at the time the Company determined
that such amounts were not probable of collection from the lessee. In connection
with the accounting for the insurance policy, the Company has recorded a
receivable which has been limited to the actual costs incurred or losses
recognized that would have been billable to the lessee pursuant to the lease
contract which are also covered by the insurance contract. Items that are
covered under the insurance contract, for amounts billable to the lessee in
accordance with the lease that are in excess of costs incurred and losses
recognized by the Company, are considered a gain contingency. Upon collection of
the receivable from the insurance carriers, any amounts in excess of or less
than the receivable recorded would be recorded as other (income)/expense, net in
the Consolidated Statements of Income.

As of December 31, 2001, the receivable due from the insurance
company totaled approximately $9.0 million and is included in other receivables,
net in the accompanying Consolidated Balance Sheets.

The change in the accounting for this insurance claim resulted
in a decrease to previously reported pre-tax and net income of $5,125 and
$4,497, respectively, for the year ended December 31, 2001.

Changes in Accruals and Estimates

The Company made other adjustments consisting of changes to
accruals and estimates as well as entries to reclassify previously recorded
entries to their correct periods including the following:

| | Bonus Accrual
The Company over-accrued for bonuses in the year ended December 31, 2000. This
excess accrual resulted in a lower bonus provision during the year ended
December 31, 2001 when the excess accrual was adjusted. The over accrual at
December 31, 2000 was corrected during the re-statement process resulting in an
increase to pre tax income for the year ended December 31, 2000 by $614 with a
corresponding decrease to pre tax income for the year ended December 31,
2001.Estimated Repair Costs Incurred on Equipment
After the acquisition of certain used equipment in 1998, the Company capitalized
the estimated cost of repairs incurred for the equipment to the depreciable
basis of the assets acquired. During 2001, the Company determined that the
actual repair costs were less than the estimated costs, resulting in an excess
asset balance being depreciated since 1998. During 2001, the Company made an
adjustment reducing depreciation expense by $728 (pre-tax) to correct for the
excess depreciation expense recorded by the Company from 1998 through 2000. In
connection with the re-statement, this 2001 adjustment to depreciation expense
was reversed and depreciation expense was corrected for the periods from 1998
through 2000, resulting in an increase to retained earnings of $229 (after tax)
at December 31, 1999, an increase to pre-tax income by $340 for the year ended
December 31, 2000 and a reduction of pre-tax income by $728 for the year ended
December 31, 2001.Other
Other
similar adjustments were made that were individually immaterial and had the
effect of increasing opening retained earnings by $1,334 at January 1, 2000.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Income Tax Expense (Benefit)

The change in the provision for income taxes due to the
correction of the errors described above decreased the provision for income
taxes by $2,621 and increased the provision for income taxes by $248 for the
years ended December 31, 2001 and 2000, respectively. In addition, the provision
for income taxes was increased as a result of the adoption of SFAS 145 by $372
and $560 for the years ended December 31, 2001 and 2000, respectively.

Deferred Tax Asset Valuation Allowance

The Company also completed a review of its deferred tax
liabilities and the carrying value of certain tax assets. In connection with
this review, the Company reclassified certain tax liabilities to properly
reflect them as deferred tax valuation allowances and has reduced its opening
retained earnings and increased its deferred tax liability at January 1, 2000 by
$1,582. In addition, it has increased its provision for income taxes by $924 and
$584 for the years ended December 31, 2001 and 2000, respectively, with a
comparable increase to its deferred tax liabilities at those dates.

Financial Statement Impacts

The correction of the above items resulted in the restatement of
certain amounts on the Consolidated Balance Sheet as of December 31, 2001 and
the Consolidated Statements of Income for fiscal years 2001 and 2000 as follows:

`AS PREVIOUSLY                     AS
                                                                    REPORTED      INCREASE/     RESTATED
                                                                    2001(1)       (DECREASE)      2001
                                                                 ----------------------------------------

ASSETS
Cash and short-term investments                                     $ 102,189      $ 1,571       $103,760
Marketable securities                                                     638            -            638
Accounts and notes receivable, net                                     45,156        7,808         52,964
Net investment in direct financing leases                             229,239       46,133        275,372
Other receivables, net                                                 63,169      (14,558)        48,611
Leasing equipment, net                                              1,372,326      (37,539)     1,334,787
Other investment securities                                            15,970         (318)        15,652
Other assets                                                           79,078         (194)        78,884
Assets related to discontinued operations                              10,020      (10,020)             -
Assets of business transferred under contractual agreement                  -       11,561         11,561
                                                                 ----------------------------------------
TOTAL ASSETS                                                       $1,917,785       $4,444     $1,922,229
                                                                 ========================================


LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses                                $ 80,683      $(6,636)       $74,047
Total taxes                                                            30,243        5,033         35,276
Deferred income                                                           766         (226)           540
Total debt and capital lease obligations                            1,335,310       19,370      1,354,680
Liabilities related to discontinued operations                          6,072       (6,072)             -
Liabilities of business transferred under contractual agreement             -        5,078          5,078
Preferred securities                                                   75,000            -         75,000
Minority interest in equity of subsidiaries                            27,247         (908)        26,339
Total stockholders' equity                                            362,464      (11,195)       351,269
                                                                 ----------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                         $1,917,785       $4,444     $1,922,229
                                                                 ========================================`

`AS PREVIOUSLY                     AS
                                                                    REPORTED      INCREASE/     RESTATED
STATETMENT OF OPERATIONS                                            2001(1)       (DECREASE)      2001
                                                                 ----------------------------------------

REVENUES                                                             $305,133      $33,585       $338,718

COSTS AND EXPENSES
Lease operating and administrative expense                             88,439       40,450        128,889
Provision for doubtful accounts                                         2,302        6,699          9,001
Fair value adjustment for derivative instruments                        2,647        5,601          8,248
Depreciation and amortization of leasing equipment                     74,311        5,367         79,678
Losses for investments under equity method                               (146)         950            804
Other (income)/expense, net                                               612      (10,410)        (9,798)
Interest expense                                                       95,044        3,226         98,270
Interest income                                                        (9,400)         (39)        (9,439)
                                                                 ----------------------------------------
TOTAL COSTS AND EXPENSES                                              253,809       51,844        305,653
                                                                 ----------------------------------------
INCOME BEFORE MINORITY INTEREST INCOME/(EXPENSE),
PROVISION FOR INCOME TAXES AND CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE                                         51,324      (18,259)        33,065
Minority interest income/(expense), net                                (1,601)       2,040            439
                                                                 ----------------------------------------
INCOME FROM CONTINUING OPERATIONS BEFORE PROVISION
FOR INCOME TAXES, DISCONTINUED OPERATIONS AND
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE                    49,723      (16,219)        33,504
Provision for income taxes                                              6,725       (1,325)         5,400
                                                                 ----------------------------------------
INCOME FROM CONTINUING OPERATIONS BEFORE
DISCONTINUED OPERATIONS AND CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE                                         42,998      (14,894)        28,104
(Loss)/income from discontinued operations, net of tax                 (1,909)       1,909              -
Cumulative effect of change in accounting principle, net of tax           833         (833)             -
Extraordinary gain on retirement of debt, net of tax                      558         (558)             -
                                                                 ----------------------------------------
NET INCOME                                                            $42,480     $(14,376)       $28,104
                                                                 ========================================

                                                                 AS PREVIOUSLY                     AS
                                                                    REPORTED      INCREASE/     RESTATED
                                                                    2000(1)       (DECREASE)      2000
                                                                 ----------------------------------------

REVENUES                                                             $242,255      $45,298       $287,553

COSTS AND EXPENSES
Lease operating and administrative expense                             58,727       31,830         90,557
Provision for doubtful accounts                                         2,192        1,592          3,784
Depreciation and amortization of leasing equipment                     60,767        5,308         66,075
(Income)/loss investments under equity method                             235          363            598
Other (income)/expense, net                                             2,274         (721)         1,553
Interest expense                                                       84,596        3,213         87,809
Interest income                                                       (16,511)        (726)       (17,237)
                                                                 ----------------------------------------
TOTAL COSTS AND EXPENSES                                              192,280       40,859        233,139
                                                                 ----------------------------------------

INCOME BEFORE MINORITY INTEREST INCOME/(EXPENSE),
PROVISION FOR INCOME TAXES AND CUMULATIVE EFFECT OF
CHANGE IN ACCOUNTING PRINCIPLE                                         49,975        4,439         54,414
Minority interest income/(expense), net                                     -         (807)          (807)
                                                                 ----------------------------------------
INCOME FROM CONTINUING OPERATIONS BEFORE PROVISION FOR
INCOME TAXES, DISCONTINUED OPERATIONS AND CUMULATIVE
EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE                               49,975        3,632         53,607
Provision for income taxes                                              8,175        1,392          9,567
                                                                 ----------------------------------------
INCOME FROM CONTINUING OPERATIONS BEFORE DISCONTINUED
OPERATIONS AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
PRINCIPLE                                                              41,800        2,240         44,040
(Loss)/income from discontinued operations, net of tax                  1,156       (1,156)             -
Cumulative effect change in accounting principle, net of tax              660            -            660
Extraordinary gain on retirement of debt, net of tax                      840         (840)             -
                                                                 ----------------------------------------
NET INCOME                                                            $44,456         $244        $44,700
                                                                 ========================================

(1)  Certain amounts in the "As Previously Reported 2001" column have been reclassified to conform to the
     classification in 2002.`

|(3) | Income taxes:
|--- | -------------

Significant components of deferred tax assets and liabilities as
of December 31, 2002 and 2001 were as follows:

`2002         2001
                                                              ----         ----
     Deferred tax assets:
         Loss carry forwards                                $112,925     $102,999
         Other                                                30,327        7,330
                                                            --------     --------
            Total deferred tax assets                        143,252      110,329
              Valuation allowances                          (14,806)      (8,553)
                                                            --------     --------
            Net deferred tax assets                          128,446      101,776
                                                            --------     --------
     Deferred tax liabilities:
         Operating property, net                             154,878      119,357
         Other                                                 5,437       17,533
                                                            --------     --------
            Total deferred tax liabilities                   160,315      136,890
                                                            --------     --------
            Net deferred tax liability                       $31,869      $35,114
                                                            ========     ========`

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. A valuation allowance has
been recorded for the full amount of these NOLs because the utilization of these
NOLs prior to their expiration is considered unlikely. In 2002 the Company
recorded additional valuation allowances aggregating $6,253 primarily for future
tax deductions related to an equity investment, the Chassis Holdings partnership
and for losses incurred with respect to PCR. In 2001 the Company recorded
valuation allowances of $661 relating to future deductions relating to its
Chassis Holdings partnership. Valuation allowances have been established for
certain payments with respect to the Chassis Holdings partnership since it could
not be concluded that "it is more likely than not" that such items will give
rise to a realizable tax benefit in the foreseeable future. Additionally,
valuation allowances have been established for future tax losses relating to an
equity investment of the Company since it would give rise to a capital loss the
deductibility of which is limited under the tax law. Since the Company is not
presently projected to generate capital gain income, the "more likely than not"
standard for realization of such future capital losses has not been met.

Through December 31, 2002, the Company has incurred passive
activity loss carryovers of approximately $192,959 for U.S. federal income tax
purposes. These losses can be carried forward indefinitely to offset income from
future leasing activities. Additionally, the Company and its subsidiaries have
net operating loss carryovers aggregating approximately $151,184 which (after
2003 for New Jersey) can be used to offset future taxable income for state
purposes. For New Jersey state tax purposes these losses are scheduled to expire
after 2009 if not utilized.

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, 2002 unremitted earnings of this subsidiary were approximately
$275,650. The deferred U.S. Federal income taxes related to the unremitted
earnings of this subsidiary would be approximately $96,478, assuming these
earnings are taxable at the U.S. statutory rate, net of foreign tax credits.

As a company resident in Barbados, Interpool Limited is required
to file tax returns in Barbados and pay any tax liability to Barbados. However,
no Barbados tax returns have been prepared or filed for Interpool Limited for
any period subsequent to its 1997 tax year, because such tax returns are
required to be accompanied by audited financial statements for Interpool
Limited, which are not available. The Company believes that the failure to file
these returns has not resulted in any underpayment of taxes, interest or
penalties (other than a nominal late filing penalty recently enacted in
Barbados), because no Barbados taxes would have been due for the years for which
returns have not been filed. The Company further believes that Interpool
Limited's failure to file these returns would not present any other material
risk to Interpool. The Company intends to have the necessary Interpool Limited
financial statements prepared and audited as promptly as practicable so that
Interpool Limited's Barbados tax returns can be filed as required.

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

`2002      2001     2000
                                                                   ----      ----     ----
     U.S. statutory rate                                           35.0%     35.0%    35.0%
     Difference due to operation of subsidiary in Barbados       (285.5)    (26.7)   (21.1)
     State taxes                                                  (52.0)      1.5      2.8
     Other                                                          4.3       1.4      0.1
     PCR losses                                                    39.3       2.1      ---
     Valuation allowances                                         212.4       2.8      1.1
                                                                  -----       ---      ---

     Actual tax rate                                              (46.5)%    16.1%    17.9%
                                                                  =======    =====    =====`

The provision (benefit) for income taxes, including the tax
effect for the cumulative effect of change in accounting principle, reflected in
the accompanying consolidated statements of income is as follows:

`2002           2001           2000
                                               ----           ----           ----
     U.S.                                    $(1,883)        $5,107         $9,265
     Other                                       490            293            742
                                                 ---            ---            ---
                                             $(1,393)        $5,400        $10,007
                                             ========        ======        =======

     Current                                  $1,725         $1,898         $4,141
     Deferred                                 (3,118)         3,502          5,866
                                              -------         -----          -----
                                             $(1,393)        $5,400        $10,007
                                             ========        ======        =======`

|(4) | Leasing activities:
|--- | -------------------

As lessee--

The aggregate capital lease obligations, secured by equipment,
with installments payable in varying amounts through 2018, were $774,173 at
December 31, 2002. The aggregate capital lease obligation, secured by equipment,
with installments payable in varying amounts through 2011 were $368,384 at
December 31, 2001.

As of December 31, 2002, the annual maturities of capital leases
and related interest were as follows:

`Payment       Interest         Principal
                                       -------       --------         ---------
     2003                              $81,256        $19,852           $61,404
     2004                               75,734         16,100            59,634
     2005                               86,139         13,329            72,810
     2006                               57,736          9,643            48,093
     2007                               69,914          7,097            62,817
     Thereafter                        479,930         10,515           469,415
                                       -------         ------           -------
                                      $850,709        $76,536          $774,173
                                      ========        =======          ========`

The Company leases office space and certain leasing equipment
under operating leases expiring at various dates through 2010. Rental expense
under operating leases aggregated $17,074, $14,856, and $8,439 for the years
ended December 31, 2002, 2001 and 2000, respectively.

As of December 31, 2002, the aggregate minimum rental commitment
under operating leases having initial or remaining noncancellable lease terms in
excess of one year was as follows:

`2003                                         $20,067
          2004                                          19,856
          2005                                          17,934
          2006                                          15,909
          2007                                          14,108
          Thereafter                                    14,043
                                                        ------
                                                      $101,917
                                                      ========`

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 total 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, and is included in total lease receivables
(approximately $60,012 and $44,221 at December 31, 2002 and 2001, respectively).
Unearned income represents the excess of gross investment over equipment cost.
Receivables under these direct financing leases, net of unearned income, are
collectible through 2011 as follows:

`December 31, 2002
                                                 -----------------
                                   Total Lease        Unearned          Net Lease
                                   Receivable       Lease Income       Receivable
                                   ----------       ------------       ----------
     2003                             $94,716            $34,601          $60,115
     2004                              88,930             26,991           61,939
     2005                              71,055             19,394           51,661
     2006                              61,081             14,659           46,422
     2007                              57,975              9,487           48,488
     Thereafter                        81,506             16,002           65,504
                                       ------             ------           ------
                                     $455,263           $121,134         $334,129
                                     ========           ========         ========`

As of December 31, 2001, the Company had total lease receivable,
unearned lease income and net lease receivables of $385,227, $109,855 and
$275,372 respectively.

As of December 31, 2002 the Company also had noncancellable
operating leases, under which it will receive future minimum rental payments as
follows:

`2003                                         $82,509
          2004                                          46,772
          2005                                          31,472
          2006                                          20,776
          2007                                          15,880
          Thereafter                                    20,809
                                                        ------
                                                      $218,218
                                                      ========`

The Company capitalizes lease commissions and amortizes this
cost over the average life of the related lease contract. At December 31, 2002
and 2001, $3,987 and $3,268 of these commissions were included in other assets.

In February 2001, the Company demanded return of all its
equipment on lease to a significant customer based in South Korea. The lessee
subsequently commenced insolvency proceedings and did not return our equipment.
At the time of this insolvency, the Company maintained insurance coverage
against such lessee defaults, and submitted a claim to its insurance carriers
seeking to recover the value of the receivables owed by the customer (to the
extent covered by the insurance policies). Our claim includes per diem rental
charges for up to 180 days after the default date for equipment not returned by
the lessee as well as loss, damage and recovery costs relating to the equipment
on lease that are also billable to the lessee in accordance with the lease. The
Company filed an insurance claim in excess of the policy's maximum coverage of
$34,600, net of a $400 deductible under the insurance policy. As of December 31,
2002 and 2001, the outstanding receivable recorded from the insurance carrier is
$19,605 and $9,045, respectively.

The Company provided the supporting documentation for its claim
to an adjuster appointed by the insurance underwriters. A report of the
adjuster's findings was submitted to the underwriters in November 2002.

On December 26, 2002, the Company's insurance underwriters
commenced a declaratory judgment action against the Company in the United States
District Court for the Southern District of New York seeking rescission of its
customer default insurance coverage or, in the alternative, a declaration that
the premiums paid by the Company for this insurance were inadequate. The
insurance underwriters' primary contention is that the Company did not fully
disclose to them all material information concerning its South Korean lessee.
The underwriters also dispute the timing of the Company's notifications to them
of this loss and the amount of the loss. The Company has filed a response to
this complaint. The Company intends to vigorously pursue its claim for recovery
under its insurance policies and believes that they have strong claims under the
policies and defenses to the arguments asserted by the insurance underwriters.
Although it is impossible to give assurances as to the ultimate outcome of this
proceeding in view of the uncertainties inherent in any litigation, based upon
the progress of this case to date and the merits of its position, and after
consultation with external counsel, the Company believes that the facts as they
have been developed through discovery, and the applicable law, should entitle it
to a recovery in the full amount of its claim. The Company will continue to
monitor the progress and development of this litigation. As the litigation
progresses, the Company will continue to evaluate the prospects for full
recovery on its insurance claim, and reserves for the impairment of the asset
values may become necessary.

Allowance for doubtful accounts--

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

`2001          2000
                                                      2002      Restated      Restated
                                                      ----      --------      --------

      Balance, beginning of year                    $6,674       $16,372       $11,508
           Provision charged to expense              7,843         9,001         3,784
           Increase for allowance due to
           consolidation of CAI as of June
           27, 2002                                  1,898           ---           ---
           Reserves Acquired in Business
           Combination                                 ---           ---         1,281
           Reclassification of Liabilities of
           Business Transferred Under
           Contractual Agreement                       ---          (538)         ---
           Write-offs                               (2,504)      (18,327)        (760)
           Recoveries                                  132           170          563
           Other                                       (10)           (4)          (4)
                                                       ----           ---          ---
      Balance, end of year                         $14,033        $6,674      $16,372
                                                   =======        ======      =======`

The allowance for doubtful accounts includes the Company's
estimate of allowances necessary for receivables on both operating and finance
lease receivables. The allowance for doubtful accounts is developed based on two
key components (1) specific reserves for receivables which are impaired for
which management believes full collection is doubtful and (2) reserves for
estimated losses inherent in the receivables based upon historical trends. The
Company believes its allowance for doubtful accounts is adequate to provide for
credit losses inherent on its accounts and notes receivable. The allowance for
doubtful accounts is intended to provide for losses inherent in the accounts and
notes receivable, and requires the application of estimates and judgments as to
the outcome of collection efforts and the realization of collateral, among other
things. In addition, changes in economic conditions or other events may
necessitate additions or deductions to the allowance for doubtful accounts.
Finance leases are evaluated on a case by case basis. When evaluating its
operating and finance lease receivables for impairment, the Company considers,
among other things, the level of past-due amounts of the respective receivable,
the borrower's financial condition, credit quality indicators of the borrower,
the value of underlying collateral and third party credit enhancements such as
guarantees and insurance policies. 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 finance lease is reclassified to leasing
equipment, and
| | - | -------------------------------------------------------------------------------------------

| |  | Collectibility is evaluated, taking into consideration equipment book value, and
the total outstanding receivable, as well as the likelihood of collection
through the recovery of equipment.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

As of December 31, 2002 and 2001, included in accounts and notes
receivable are non-performing receivables of $11,127 and $6,000, respectively.
The Company's average non-performing receivables are $9,150 and $4,807 for the
years ended December 31, 2002 and 2001, respectively. As of December 31, 2002
and 2001, included in the allowance for doubtful accounts are reserves for the
non-performing receivables of $9,505 and $2,845, respectively. As of December
31, 2002 and 2001, our non-performing receivables, net of applicable reserves,
were 2.54% and 5.96%, respectively, of accounts and notes receivable, net.

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

The Company seeks to reduce credit risk by maintaining insurance
coverage against customer insolvency and related equipment losses. Through
January 31, 2002, the Company maintained contingent physical damage,
recovery/repatriation and loss of revenue insurance, which provided coverage in
the event of a customer's insolvency, bankruptcy or default giving rise to its
demand for return of all of its equipment. The policy covered the cost of
recovering the Company's equipment from the customer, including repositioning
cost, damage to the equipment and the value of equipment that could not be
located or was uneconomical to recover. It also covered a portion of the lease
revenues that the Company might lose as a result of the customer's default
(i.e., up to 180 days of lease payments following an occurrence under the
policy). The premium rates and deductibles for this type of insurance have
increased as a result of higher claim experience by the Company and also within
the industry. As a result, effective March 1, 2003, the Company has obtained a
new policy covering similar occurrences for a twelve-month period but with
revised terms. The new coverage decreases the recoverable amount per occurrence
to $9 million as compared to $35 million in our previous policy and increases
the deductible per occurrence from $.4 million to $3 million. There can be no
assurance that this or similar coverage will be available in the future or that
such insurance coverage will cover the entirety of any loss.

|(5) | Debt:
|--- | -----

The Company's debt consists of notes and loans with installments
payable in varying amounts through 2010, with effective interest rates of
approximately 2.61% to 9.95% and a weighted average rate of 5.32% in 2002. The
principal amount of debt payable under fixed rate contracts is $276,542.
Remaining debt of $546,496 is payable under floating rate arrangements, of which
$208,206 has been converted to fixed rate debt through the use of interest rate
swap agreements. Approximately $555,996 of floating rate debt and capital lease
obligations outstanding, have been converted to fixed rate debt through the use
of interest rate swaps of which $529,200 qualify as cash flow hedges and $26,796
are free standing derivatives and do not qualify as cash flow hedges (see
accounting treatment for interest rate swap contracts accounted for as either
cash flow hedges or free standing derivative contracts in Note 6 to the
Consolidated Financial Statements). 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, 2002, under covenants in the Company's loan agreement approximately
$33,365 of retained earnings were available for dividends. The Company was in
compliance with its debt covenants at December 31, 2002 except for having
previously issued consolidated financial statements that were not in accordance
with generally accepted accounting principles (GAAP).

As a result of the Company's financial restatement and the
re-audit, as well as the completion of the internal investigations by special
counsel to its Audit Committee, the Company was delinquent in the completion of
its financial statements and Form 10-K for the year ended December 31, 2002 and
its financial statements and quarterly reports for all interim quarterly periods
in 2003. The Company requested and received necessary waivers under its debt
agreements. Most of these waivers, as currently in effect, waive any default
resulting from having previously issued financial statements that were not in
accordance with GAAP and for the late preparation and filing with the Securities
and Exchange Commission (SEC) of its financial statements and required periodic
reports for 2002 and the first three quarters of 2003. The waivers require that
the Company's 2002 Annual Report on Form 10-K to be filed with the SEC by
January 9, 2004, and its quarterly reports on Form 10-Q for the first three
quarters of 2003 to be filed with the SEC by January 31, 2004, February 29,
2004, and March 31, 2004, respectively. The Company has not requested or
received waivers with respect to its Annual Report on Form 10-K for the year
ending December 31, 2003, or its quarterly reports for 2004, although the
Company anticipates requesting such waivers prior to March 31, 2004. In
addition, several of the waivers are contingent upon a determination by the
applicable lender that the changes resulting from the Company's financial
restatement to its historical financial statements for 2001 and 2000 and the
first nine months of 2002 do not represent a material change from its financial
condition for these periods as originally reported. While the restatement was
necessary, the Company believes that its revised financial statements do not
represent such a material change, but it cannot assure that its lenders would
reach a similar conclusion.

The Company has deferred until January or February 2004 payment
obligations to certain equipment manufacturers for containers and chassis
previously acquired by the Company. In order to meet these further payments
obligations, the Company will most likely need to raise additional funds from
new financings. While the Company has received a signed commitment from a bank
regarding a term loan facility for up to $100,000, this financing is not assured
and is subject to documentation and other customary closing conditions before it
could be consummated. Should the Company be unable to meet these payments
obligations in January or February 2004, the manufacturers could take action
against the Company, including the commencement of legal proceedings. Such
actions could prompt one or more of the Company's lenders to claim a
cross-default has occurred under such lender's debt instrument.

In the event (i) that any additional waiver is required and
cannot be obtained before the applicable deadline; (ii) the banks determined the
restatement was a material change to the Company's financial condition; or (iii)
the Company is unable to meet the payment obligations to the equipment
manufacturers and such manufacturers commence an action against the Company, the
Company might be in violation of the terms of the applicable indebtedness, and
the lenders could exercise their right to declare the Company in default,
accelerate the indebtedness owed to such lenders, and take other action against
the Company. Moreover, the taking of any such action, or the possibility that
such action could be taken, could cause one or more of the Company's financial
institutions to take action against us, such as declaring the Company in
default, accelerating the indebtedness owed to such lender, and/or attempting to
exercise rights as a secured creditor with respect to any collateral. If any of
these circumstances were to occur, the Company might not be able to meet its
obligations to its lenders or other creditors and might not be able to prevent
such parties from taking actions that could jeopardize the Company's ability to
continue to operate its business.

As of December 31, 2002, the annual maturities of notes and
loans, net of interest thereon were as follows:

`2003                                        $100,003
          2004                                          94,735
          2005                                         321,775
          2006                                          37,936
          2007                                         218,112
          Thereafter                                    50,477
                                                        ------
                                                      $823,038
                                                      ========`

The Company has a $215,000 revolving credit facility with a
group of commercial banks; on December 31, 2002, $175,000 was outstanding, with
an interest rate of 2.64%. In July 2000, this facility was renewed and amended
with the term extended to July 31, 2005. The credit limit remains at $215,000
through July 31, 2003; thereafter the credit limit declines to $193,500 through
July 31, 2004 and $172,000 through July 31, 2005. Under its revolving credit
facility and most of its other debt instruments, the Company is required to
maintain covenants (as defined) for a tangible net worth of $125,000, a fixed
charge coverage ratio of 1.5 to 1 and a funded debt to net worth ratio of 4.0 to
1. In July 2003 and October 2003, in connection with obtaining necessary waivers
under the revolving credit facility due to the late filing of the Company's
periodic reports with the SEC and the restatement of its past financial
statements, the Company agreed, among other things, to reduce advance rates
under this facility, to define several additional events as events of default,
to increase the interest rate margin until it is in compliance with all SEC
reporting requirements, and to maintain specified levels of unrestricted cash
and cash equivalents until the delinquent SEC filings are made. The Company also
agreed to restrictions on dispositions of collateral and on encumbrances of
assets as well as a limitation on concessions that could be made to its other
financial institutions in connection with obtaining waivers. The October 2003
amendment also required the Company to provide additional financial information
to the lenders under the facility and to continue the engagement of a financial
advisor.

In March 2002, the Company established a $500,000 chassis
asset-backed securitization facility. This facility is guaranteed by MBIA and
was therefore rated AAA by Standard & Poor's and Aaa by Moody's. The
proceeds from this financing were used to repay debt related to a secured
financing facility used to fund the acquisition of assets from Transamerica (See
Note 7 to the Consolidated Financial Statements), to repay a previously
established chassis securitization facility, to fund growth of our intermodal
equipment fleet and for working capital purposes. On September 30, 2002, the
Company entered into a sale/leaseback transaction and expanded the total debt
and capital lease obligations to a total of $540,968 outstanding, of which
$129,328 is a debt obligation and $411,640 is a capital lease obligation under
the sale/leaseback. At December 31, 2002 the total debt and capital lease
obligation outstanding under the sale/leaseback totaled $530,743 of which
$120,246 is a debt obligation and $410,497 is a capital lease obligation. The
interest rate on this facility is 5.08%, including the effect of interest rate
swap contracts (accounted for as cash flow hedges) in place as of December 31,
2002. This facility continues to be accounted for as an on-balance sheet secured
financing. The assets used to secure this facility are segregated in a Delaware
statutory titling trust (the Trust) and in a special purpose entity (which is
consolidated by the Company) and consist of $18,622 of accounts receivable and
fixed assets with a net book value of $504,253 at December 31, 2002. In
addition, $23,998 of cash and marketable securities at December 31, 2002 are
restricted for use by the Trust and the special purpose entity and included on
the Company's consolidated balance sheet. The assets, which are segregated in
the special purpose entity and included on the Company's consolidated balance
sheet, are not available to pay the claims of the Company's creditors.

In October 2000, the Company established a secured financing
facility in the amount of $300,000, to fund the TA transaction. At December 31,
2001, $97,656 of this facility was outstanding with an interest rate of 3.94%.
The Company repaid this facility in full in March 2002 with proceeds from its
new chassis asset-backed securitization facility completed in March 2002.

In July 2001, the Company's container securitization facility,
which was originally established as an off-balance sheet source of financing in
March 1999, was amended allowing additional financings to be accounted for as
on-balance sheet secured debt financing. In August 2002, the container
securitization facility was extended with the maximum outstanding limited to
$150,000. In October 2002 the facility was renewed and the facility amount was
increased to $200,000. At December 31, 2002, $123,100 of the container
securitization facility was utilized, of which $31,109 relates to off-balance
sheet financing, while $91,991 relates to on-balance sheet financing and is
included in debt and capital lease obligations in the consolidated balance
sheets. At December 31, 2002, the rate on this facility is 5.85%, including the
effect of interest rate swap contracts (accounted for as cash flow hedges) in
place as of December 31, 2002. In April 2003 the Company borrowed $33,550 under
this facility. Subsequently, the Company amended its container securitization
facility to relinquish the right to request additional advances under the
facility and agreed that all lease payments subsequently received under the
facility would be used to reduce the indebtedness. In addition, the Company
agreed to comply with several new covenants, consistent with those contained in
the amendment to its revolving credit agreement, as described previously.

In July 2000, the Company established a chassis securitization
facility of $280,000. In October 2000, this chassis securitization facility was
increased to $300,000. At December 31, 2001, $277,410 of this facility was
outstanding with an interest rate of 4.75%, including the effect of interest
rate swap contracts (accounted for as cash flow hedges) in place as of December
31, 2001. The Company repaid this facility in full in March 2002 with proceeds
from its new chassis asset-backed securitization facility completed in March
2002.

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 first quarter of 2000, the Company
retired $8,200 of the 6-5/8% Notes and recognized a gain of $785. During 2001,
the Company retired $27,174 of the 6-5/8% Notes and recognized a gain of $725.
During 2002 the Company retired $6,365 of the 6-5/8% Notes and recognized a gain
of $32. On October 16, 2002, we commenced a tender offer for any and all of our
outstanding 6-5/8% Notes due 2003. Approximately $41,261 principal amount of
6-5/8% Notes were outstanding upon commencement of the tender offer. The
purchase price in the tender offer was $1,000 per $1,000 principal amount of the
6-5/8% Notes, plus accrued and unpaid interest. The source of the consideration
for the tender offer was cash on hand. The expiration date of the tender offer
was November 15, 2002. As a result of this tender offer, the Company retired
$33,071 principal amount of the 6-5/8% Notes at par. As of December 31, 2002,
$8,190 principal amount of the 6-5/8% Notes remains outstanding. On March 1,
2003 the remaining 6-5/8% Notes outstanding were paid off in accordance with
terms of the agreement.

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 a
gain of $615. During 2001, the Company retired $2,075 of the 7.20% Notes and
recognized a gain of $205. During 2002, the Company retired $10,100 of the 7.20%
Notes and recognized a gain of $1,086. As of December 31, 2002, $62,825 and
$147,000 principal amount of the 7.20% and 7.35% Notes, respectively, remains
outstanding.

On June 27, 2002, CAI entered into an amended $110,000 senior
revolving credit agreement with a group of financial institutions. (See Note 15
to the Consolidated Financial Statements.) To facilitate the closing of this new
credit facility, the Company agreed to extend the repayment terms of its Note so
as to require mandatory quarterly principal payments of $1,683 beginning July
30, 2006 through April 30, 2011 and modified certain financial covenants in the
Note. Interest on the Note continues to accrue at an annual fixed rate of 10.5%
and is payable quarterly. The Note continues to be cross-defaulted with CAI's
senior credit agreement, subject to the terms of an amended and restated
subordination agreement.

A total of $74,000 was outstanding under CAI's senior revolving
credit facility at December 31, 2002. Borrowings under CAI's senior credit
facility are secured by substantially all CAI's assets totaling approximately
$170,000 in the Company's Consolidated Financial Statements at December 31,
2002, and are payable on June 27, 2005. The senior credit facility contains
various financial and other covenants. At June 30, 2002, CAI would not have been
in compliance with one of the financial covenants then contained in its senior
credit facility as well as similar covenants under two master lease agreements
relating to equipment in CAI's fleet. CAI received amendments to these covenants
in September 2002 which were made retroactive to June 30, 2002. As a result, CAI
was in compliance as of June 30, 2002 with all revolving credit facility and
lease covenants as amended and continues to be in compliance as of December 31,
2002.

In addition to the debt specifically identified above, the
Company has additional notes and loans outstanding with various financial
institutions totaling $111,667, as of December 31, 2002, with installments
payable in varying amounts through 2009 with interest rates of approximately
2.61% to 9.95%.

In July 2002, the Company commenced a registered subscription
rights offering of up to $31,465 of its 9.25% Convertible Redeemable
Subordinated Debentures. The debentures were offered to holders of its common
stock pursuant to the exercise of non-transferable subscription rights and were
to be convertible into shares of its common stock. The Company had the right in
its discretion to accept offers from other parties to purchase debentures not
subscribed for by stockholders. On August 14, 2002, the Company terminated the
subscription rights offering due to a delay in filing its Form 10-Q for the
quarter ended June 30, 2002. The Company re-commenced the offering during
November 2002 and accepted subscriptions for $32,118 of debentures, which were
issued in December 2002. The Company also increased the size of the offering and
subsequently accepted $5,064 of additional subscriptions in January and February
2003, resulting in a total of $37,182 million of debentures being issued. The
debentures bear interest at an annual rate of 9.25%. They have a mandatory
redemption feature upon the earlier of the occurrence of a change of control or
on December 27, 2022. They have an optional redemption feature after the third
anniversary at a price of 100% of outstanding principal, plus accrued interest.
They have a special redemption feature between December 27, 2006 and December
27, 2007, during which period the Company may redeem the debentures by issuing
common stock at $25.50 per debenture plus accrued interest, if the average
closing price of its common stock for five consecutive trading days equals or
exceeds $25.50 per share. Lastly, at any time, the holder of the debentures may
convert the debentures into the Company's common stock at a per share conversion
price of $25 per debenture.

|(6) | Derivative instruments:
|--- | -----------------------

The Company's assets are primarily fixed rate in nature while
its debt instruments are primarily floating rate. The Company employs derivative
financial instruments (interest rate swap agreements) to effectively convert
certain floating rate debt instruments into fixed rate instruments and thereby
manage its exposure to fluctuations in interest rates.

Prior to the adoption of SFAS 133, interest differentials paid
or received under swap contracts were 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.

In June 1998, the FASB issued SFAS 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 SFAS No. 138, Accounting for Certain Derivative Instruments and
Certain Hedging Activities, an amendment of SFAS 133. Statement 133,
collectively referred to hereafter as SFAS 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. On January 1, 2001, the Company adopted SFAS 133. SFAS
133, in part, allows special hedge accounting for fair value and cash flow
hedges. SFAS 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. SFAS 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 $389,500 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, and contractually
terminate at various dates between 2001 and 2007. The adoption of SFAS 133 on
January 1, 2001 increased liabilities by approximately $9,012, with offsetting
amounts recorded as decreases to deferred tax liabilities of $2,434 and
accumulated other comprehensive income of $6,578.

As of December 31, 2002 and December 31, 2001, included in
accounts payable and accrued expenses in the accompanying consolidated balance
sheets is a liability of $49,577 and $20,611, respectively, representing the
market value of the Company's interest rate swap contracts.

The unrealized pre-tax losses on cash flow hedges as of December
31, 2002 of $23,436 and the related income tax benefit of $8,703 have been
recorded by the Company as a component of other comprehensive income (loss). See
Note 1 to the Consolidated Financial Statements for additional disclosures
regarding swap agreements and their impact on other comprehensive income.

The unrealized pre-tax losses on cash flow hedges as of December
31, 2001 of $12,363 and the related income tax benefit of $2,195 have been
recorded by the Company as a component of other comprehensive income (loss).
See Note 1 to the Consolidated Financial Statements for additional disclosures
regarding swap agreements and their impact on other comprehensive income.

Amounts recorded in accumulated other comprehensive income would
be reclassified into earnings upon termination of these interest rate swap
agreements and related debt instruments prior to their contractual maturity. The
Company may at its discretion terminate or redesignate any such interest rate
swap agreements prior to maturity. At that time, any gains or losses on
termination would continue to amortize into income to correspond to the
recognition of interest on the hedged debt. If such debt instrument was also
terminated the gain or loss associated with the terminated derivative included
in Accumulated Other Comprehensive Loss at the time of termination of the debt
would be recognized in the consolidated income statement at that time.

Pre-tax losses for the year ended December 31, 2002 resulting
from the change in fair value of interest rate swap agreements held which do not
qualify as cash flow hedges under Statement 133 of $5,621 have been recorded on
the consolidated statements of income as fair value adjustment for derivative
instruments. This compares to $8,096 for year ended December 31, 2001. Pre-tax
income of $91 for the year ended December 31, 2002 resulting from interest rate
swap agreements which qualify as cash flow hedges but are not perfectly
correlated have associated ineffectiveness and have been recorded in the
consolidated statements of income as fair value adjustment for derivative
instruments. This compares to $152 of pre tax losses for the year ended December
31, 2001. Future ineffectiveness related to these interest rate swap agreements
will continue to be recorded in the consolidated statements of income during the
next twelve months.

As of December 31, 2002, the annual maturities of the notional
principal amounts, with installments payable in varying amounts through 2012,
and the weighted average interest rates expected to be received or paid for
interest rate swap contracts were as follows:

`Notional        Receive          Pay
                                   Amount          Rate           Rate
                                   ------          ----           ----
     2003                         $79,310         1.45%          5.06%
     2004                          75,968         1.46%          5.08%
     2005                          82,699         1.51%          5.14%
     2006                          50,478         1.46%          5.37%
     2007                         159,096         1.43%          5.86%
     Thereafter                   108,445         1.42%          5.86%
                               -------------
     Total                        $555,996        1.45%          5.49%
                               =============`

The weighted average receive rate is based on the floating rate
option specified by the interest rate swap contract and are either one-month or
three-month USD-LIBOR.

The Company estimates that approximately $14,600 of accumulated
other comprehensive loss will be reclassified into the Consolidated Statement of
Income within the next 12 months.

|(7) | 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 was paid to an ex-director and member of management 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 their estimated fair values at the date of acquisition based
primarily from independent appraisals (and other relevant information for assets
that were subsequently sold in March 2001 as further described below). The fair
value of the assets and liabilities acquired was approximately $134,473 greater
than the purchase price of $681,000. This difference was recorded as a reduction
to the recorded value of long-term assets acquired (chassis) as of the
acquisition date.

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 fair value at October 2000 for the assets acquired
from TA to be sold to TIP was estimated based on the expected sale price of
these assets to TIP adjusted for (i) the cash collections (net of cash
disbursements) resulting from the operations of these assets from October 1,
2000 through the date of disposition of March 31, 2001 and (ii) the incremental
amount of interest expense from October 1, 2000 through March 31, 2001
associated with the acquisition of these assets.

During the year ended 2001, the Company adjusted the estimated
fair value of the assets and liabilities acquired for certain pre-acquisition
contingencies and estimated costs included in the original purchase price
allocation. This adjustment increased the allocated basis of the chassis
acquired in the TA acquisition by $1,843 and is being amortized over the average
remaining depreciable life of the assets.

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

`2000
                                                             Restated
                                                             --------
          Revenues                                           $343,681
          Income before change in accounting principle
          and extraordinary items                              49,290
          Basic net income per share                            $1.80
          Diluted net income per share                          $1.80`

|(8) | Assets Sold to TIP:
|--- | -------------------

In March 2001, the Company sold 50,000 rail trailers and
domestic containers, including all 41,000 rail trailers and domestic containers
the Company acquired from TA in October 2000, to TIP. The asset value as of
March 31, 2001 includes $281,354 related to the units acquired from TA, $4,716
of accounts receivable and $62,009 of assets previously owned by the Company.
The Company recorded a gain of $1,774 upon the consummation of this sale, which
represents the premium paid for the units previously owned by the Company over
their net book value.

|(9) | Sale of PCR and Discontinuation of Microtech's
Operations
|--- | ---------------------------------------------------------

During the three months ended September 30, 2001, the Company
adopted a formal plan to dispose of PCR, a 51%-owned subsidiary, and to
discontinue the operations of Microtech, (after acquiring the remaining 24.5%
ownership interest of this 75.5%-owned subsidiary) and liquidate its lease
portfolio. Within the historical financial statements of the Company, PCR and
Microtech comprised the computer-leasing segment and specialized in the leasing
of microcomputers and related equipment.

On December 31, 2001, the Company acquired from the management
of Microtech (who are the same individuals who managed PCR) the remaining 24.5%
ownership interest in Microtech for $792 in cash, thereby increasing the
Company's ownership in Microtech to 100%.

In addition, on December 31, 2001, the Company completed the
contractual sale of its 51% ownership stake of PCR to an investment group
comprised of the management of PCR. Under the agreement, the Company sold its
share of PCR for $3,200. The purchase price was satisfied through the issuance
of a non-recourse note in the amount of $2,560 and a cash payment of $640
received by the Company on January 2, 2002. This transaction was not accounted
for as a sale by the Company because of the level of the Company's continued
involvement in PCR subsequent to the transaction which included:

| |  | A $3,500 loan due from PCR under a long-term revolving credit
facility;
| | - | -----------------------------------------------------------------------

| |  | A $1,400 finance lease and other receivables due from PCR
primarily for its lease of computer equipment from Microtech;
| | - | -----------------------------------------------------------------------------------------------------------------------

| |  | A $5,000 guarantee provided by the Company for PCR borrowings from
an unrelated financial institution;
| | - | ------------------------------------------------------------------------------------------------------

| |  | A $3,000 guarantee provided by certain directors and officers of
the Company for a line of credit obtained by PCR from a financial institution
(related to the Company  See Note 14 to the Consolidated Financial
Statements); and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Bonus and consulting contracts entered into between the Company
and the key executives of PCR.
| | - | ----------------------------------------------------------------------------------------------

Effective December 31, 2001, all of the assets of PCR were
aggregated under the caption, assets of business transferred under contractual
agreement, and all of the liabilities and minority interest of PCR were
aggregated under the caption liabilities of business transferred under
contractual agreement on the Company's Consolidated Balance Sheet. The
receivables due from PCR on the Company's Consolidated Balance Sheet at December
31, 2001 were eliminated against the related liabilities included in liabilities
of business transferred under contractual agreement.

During 2002, the Company included in other (income)/expense, net
in the Company's Consolidated Income Statement losses resulting from PCR's
operations with a corresponding reduction to assets of business transferred
under contractual agreement in the Company's Consolidated Balance Sheet. During
the first three quarters of 2002, $4,002 of such PCR's losses were recorded by
the Company.

During the fourth quarter of 2002, the Company determined that
it was unlikely that PCR would be able to continue as a going concern, and, in
the first quarter of 2003, PCR entered bankruptcy proceedings and began the
voluntary liquidation of its business. As a result, during the fourth quarter of
2002, the Company accrued for its obligations related to the liquidation of PCR.
The amounts accrued by the Company in 2002 include $4,429 in expected payments
related to its guarantee of PCR's debt, $2,681 in payments made by The Ivy Group
(which had assumed the $3,000 guarantee made by certain officers and directors
of the Company) to pay-off PCR's bank debt and provide short term liquidity (see
further discussion below), the write-off of $1,400 in computer equipment related
receivables due to Microtech, and $1,168 related to consulting and bonus
agreements provided to key officers of PCR. These amounts have been included in
other (income)/expense, net in the Company's Consolidated Statements of Income.

At the time of closing of the sale of the Company's interest in
PCR, the Company provided a guarantee of an additional line of credit from a
financial institution of up to $3,000 on PCR's behalf. The financial institution
subsequently agreed, at the Company's request, to rescind this guarantee,
retroactive to December 31, 2001. In lieu of the Company's guarantee, effective
December 31, 2001, certain directors and officers of the Company guaranteed an
additional line of credit of up to $3,000 on behalf of PCR. Advances amounting
to $1,983 and $698 in 2002 and 2003, respectively, were made to PCR by The Ivy
Group to pay off borrowings under the line of credit and to provide PCR with
working capital. The Ivy Group is a partnership controlled by certain current
and former officers and directors of the Company. The advances made by The Ivy
Group to PCR are considered capital contributions to the Company and payment by
the Company to PCR. The payments to PCR have been determined to be uncollectible
and, accordingly, were written off by the Company as described above. Payments
made in 2002 amounting to $1,983 have been included in additional paid in
capital. The remaining payments made in 2003 of $698 have been included in
accounts payable and accrued expenses and will be reclassified to additional
paid in capital in the period when the payments were made.

|(10) | 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. The assets were
sold to a qualified special purpose entity whose sole business activity is
issuing asset backed notes ("ABNs"), supported by the future cash flows of the
assets and the underlying residuals.

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 stockholders' equity. As of December 31,
2002 and 2001, the Company estimated the fair market value of retained interest
was $10,319 and $15,652, respectively using a discounted cash flow model
assuming expected credit losses of 1.5% and a discount rate of 12.6%, in both
years. For the years ended December 31, 2002, 2001 and 2000, the Company
recorded interest income on the retained interest totaling $1,777, $3,558, and
$4,145, respectively, which is included in revenues in the accompanying
Consolidated Statements of Income. As of December 31, 2002 assets with a
historical book value of $39,969 remain in the qualified special purpose entity
with $31,109 of asset-backed notes outstanding. Impairment losses of $134 for
the year ended December 31, 2002 were recorded and included in the accompanying
Consolidated Statements of Income based upon changes in management's projected
cash flows of the underlying direct finance lease receivables in the
securitization trust.

Interpool Limited, a subsidiary of the Company (the "Servicer"),
acts as servicer for the assets. Pursuant to the terms of the servicing
agreement as amended on October 18, 2002, the Servicer is paid a fee of 0.75% of
the assets under management. Prior to the amendment to the servicing agreement,
the Servicer was paid a fee of 0.40%. As a result of this amendment, the Company
recorded a permanent impairment loss of $240 for the year ended December 31,
2002 in the accompanying Consolidated Statements of Income. 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. For the years ended December 31, 2002, 2001 and 2000 the Company
received servicing fees totaling $591, $486 and $611 which are included in
revenues in the accompanying consolidated statement of income. For the years
ended December 31, 2002, 2001 and 2000 cash flows received on the retained
interest were $ 6,435, $15,585 and $7,593, respectively.

At December 31, 2002 and 2001, 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:

`December 31, 2002       December 31, 2001
                                                        -----------------       -----------------

Carrying amount/fair value of retained interests            $10,319                 $15,652
Weighted-average life (in years)                                1.8                     2.0
Expected credit losses (annual rate)                            1.5%                    1.5%
Impact on fair value of 10% adverse change                      $83                    $145
Impact on fair value of 20% adverse change                     $167                    $289
Residual cash flows discount rate (annual)                     12.6%                   12.6%
Impact on fair value of 10% adverse change                     $182                    $324
Impact on fair value of 20% adverse change                     $354                    $631`

|(11) | 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 accrual in advance to the direct expense method. Prior to the
change in accounting, the Company estimated and accrued in advance for the cost
to repair equipment that was coming off lease in future periods. Under its new
practice, the Company accrues only for repairs (for equipment that is off lease)
that have been completed but not yet paid for. The Company believes the direct
expense method is preferable because maintenance and repair expense is not
recorded until the services are performed and, accordingly, the direct expense
method eliminates significant estimates and judgments inherent in the accrual in
advance method.

|(12) | Other contingencies and commitments:
|---- | ------------------------------------

Lease Commitments: The Company and its subsidiaries are
parties to various operating leases relating to office facilities,
transportation vehicles, and certain other equipment. All leasing arrangements
contain normal leasing terms without unusual purchase options or escalation
clauses. Rental expense under operating leases aggregated was $17,074, $14,856
and $8,439 for the years ended December 31, 2002, 2001 and 2000, respectively>

The Company and its subsidiaries are parties to various capital
leases and obligated to make payments related to its long-term borrowings. (See
Notes 4 and 5 to the Consolidated Financial Statements).

The minimum commitment under noncancellable operating and capital
leases are disclosed in Note 4 to the Consolidated Financial Statements.

Employment Agreements: The Company has entered into
employment agreements with certain executive officers and employees which
provide for minimum salary, bonus arrangements and benefits for periods from 1
to 7 years. As of December 31, 2002, the minimum obligation related to these
agreements approximated $13,910.

Guarantees: In November 2002, the FASB issued FASB
Interpretation No. 45, Guarantor's Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees of Indebtedness of Others ("FIN
45"). FIN 45 elaborates on the disclosures to be made by a guarantor in interim
and annual financial statements about its obligations under certain guarantees
it has issued. A guarantor is required to disclose (a) the nature of the
guarantee, including the approximate term, how the guarantee arose, and the
events and circumstances that would require the guarantor to perform under the
guarantee; (b) the maximum potential amount of future payments under the
guarantee; (c) the carrying amount of the liability, if any, for the guarantor's
obligation under the guarantee; and (d) the nature and extent of any recourse
provisions or available collateral that would enable the guarantor to recover
the amounts paid under the guarantee. FIN 45 also clarifies that a guarantor is
required to recognize, at the inception of a guarantee, a liability for the fair
value of the obligation undertaken in issuing the guarantee. Disclosure
requirements are effective for financial statements with periods ending after
December 15, 2002 while the initial recognition and initial measurement
provisions shall be applied on prospective basis to guarantees issued or
modified after December 31, 2002. The Company has provided the disclosures
required by FIN 45 on December 31, 2002 and it is not expected that the adoption
of the recognition and measurement provisions will have a material effect on the
Company's consolidated financial statements.

At December 31, 2002, the following guarantees were issued and
outstanding:

Indemnifications: In the ordinary course of
business, the Company executes contracts involving indemnifications standard in
the industry and indemnifications specific to a transaction such as an
assignment and assumption agreement. These indemnifications might include claims
related to any of the following: tax matters and governmental regulations, and
contractual relationships. Performance under these indemnities would generally
be triggered by a breach of terms of the contract or by a third party claim. The
Company regularly evaluates the probability of having to incur costs associated
with these indemnifications and have accrued for any expected losses that are
probable. The types of indemnifications for which payment are possible are as
follows:

| | Taxes: In the ordinary course of business, the
Company provides various tax-related indemnifications as part of transactions.
The indemnified party typically is protected from certain events that result in
a tax treatment different from that originally anticipated. The Company's
liability typically is fixed when a final determination of the indemnified
party's tax liability is made. In some cases, a payment under a tax
indemnification may be offset in whole or in part by refunds from the applicable
governmental taxing authority. The Company is party to numerous tax
indemnifications and many of these indemnities do not limit potential payment;
therefore, it is unable to estimate a maximum amount of potential future
payments that could result from claims made under these indemnities.
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Contractual relationships: The Company entered into
a number of operating leases during 2000 and 2002 in which they guaranteed a
portion of the residual value of the leased equipment. These leases have terms
that expire between 7 and 10 years. If at the end of the lease term the fair
market value of the equipment is below the guaranteed residual value in the
agreement the Company is liable for a percentage of the deficiency. The total of
these guarantees is $12,405 of which $1,451 could be due in 4 to 5 years, with
the remaining $10,954 potentially due in greater than 5 years. As of December
31, 2002 and 2001, included in accounts payable and accrued expenses in the
accompanying consolidated balance sheets is a liability of $99 and $55,
respectively, representing the accrual for these guarantees.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Standby Letters of Credit: As of December 31, 2002,
CAI, a consolidated subsidiary, has two outstanding letters of credit totaling
$6,000 which guarantee its obligations under certain operating lease agreements.
These letters of credit expire in May, 2005.
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Guarantee of Unconsolidated Affiliate Debt: Since
2000, the Company has guaranteed PCR debts due to third parties totaling $5,000.
At December 31, 2002, with PCR in liquidation, a determination was made that it
is probable that the Company will incur costs related to this guarantee. As a
result, the Company has recorded a liability for $4,429 representing its
guarantee of PCR debts net of amounts collected related to PCR's liquidation.
This is included in accounts payable and accrued expenses in the 2002
Consolidated Balance Sheet. Although there is a recourse provision that allows
the Company to recover payments under the guarantee, recovery is unlikely. (See
Note 14 to the Consolidated Financial Statements for additional discussion of
guarantees for PCR debt provided by The Ivy Group).
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Other:

At December 31, 2002 commitments for capital expenditures
totaled approximately $33,505. (See Note 21 for further discussion of
commitments entered into during 2003.)

The Company is engaged in various legal proceedings from time to
time incidental to the conduct of its business. Such proceedings may relate to
claims arising out of chassis accidents that occur from time to time which
involve death and injury to persons and damage to property. Accordingly, the
Company requires all of its lessees to indemnify the Company against any losses
arising out of such accidents while the chassis are on-hire to the lessees. In
addition lessees are generally required to maintain a minimum of $2,000 in
general liability insurance coverage which is standard in the industry. In
addition, the Company maintains a back-up general liability policy of $200,000,
in the event that the above lessee coverage is insufficient. While the Company
believes that such coverage should be adequate to cover current claims, there
can be no guarantee that future claims will never exceed such amounts.
Nevertheless, the Company believes that no current or potential claims of which
it is aware will have a material adverse effect on its financial condition or
results of operations and that the Company is adequately insured against such
claims.

|(13) | 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, 2002, 2001 and 2000, cash paid
for interest was approximately $108,886, $102,881, and $82,884, respectively.
Cash paid for income taxes was approximately $3,249, $2,719, and $2,021,
respectively.

|(14) | Related party transactions:
|---- | ---------------------------

During 2001, the Company leased approximately 28,500 square feet
of commercial space for its corporate offices in Princeton, New Jersey from 211
College Road Associates, a New Jersey general partnership in which Martin
Tuchman, a director and Chief Executive Officer and Warren L. Serenbetz, a
director, held a significant equity interest. The 2001 annual base rental for
this property was approximately $557 under a triple net lease expiring in 2010.
In the opinion of the Company's management, rent paid under this lease does not
exceed rent that the Company would have paid in an arms' length transaction with
an unrelated third party. On January 28, 2002, the Company executed a Purchase
and Sale Agreement, pursuant to which on May 1, 2002 the Company acquired the
building which houses its corporate offices. The fair market value purchase
price of the approximately 39,000 square feet building was $6,250, based upon a
determination of the fair market value of the property by an independent
property appraisal firm. The purchase price and other terms of the purchase were
unanimously approved by the Company's Board of Directors.

In January 1992 the Company executed a Consultation Services
Agreement with Radcliff Group, Inc. pursuant to which Radcliff designated Warren
L. Serenbetz, a stockholder and director, as an executive consultant. The
Consultation Services Agreement was terminated in January 1995. Under the terms
of the agreement compensation continued through December 2002 and payment of
health related costs will continue through December 31, 2007. The final payment
under the terms of the Consultation Services Agreement was made in January 2003.
Compensation under this agreement was $492 in 2002, 2001 and 2000.

Eurochassis L.P., a New Jersey limited partnership in which
Raoul J. Witteveen is one of the limited partners and the general partner,
leases 100 chassis to Trac Lease for an annual lease payment of approximately
$114 and $91, respectively for the years ended December 31, 2002 and 2001. The
annual lease term renews automatically unless canceled by either party prior to
the first day of the renewal period. The members of the Board of Directors have
unanimously determined that the terms of all arrangements between Eurochassis
L.P. and Trac Lease are beneficial and fair to the Company.

In January 1998, the Company entered into a non-exclusive
Consulting Agreement with Atlas Capital Partners, LLC pursuant to which Mitchell
I. Gordon, a Director of Interpool from 1998 to October 2003 and Chief Financial
Officer and Executive Vice President from October 2000 to July 2003,
provided investment banking consultation services. Under the terms of the
Consulting Agreement, Atlas was to have been paid $240 (plus reimbursement of
reasonable expenses), additional compensation of $560 and a twenty percent
carried interest in investments made with funds provided by Interpool. In
addition, Atlas was contractually entitled to an annual bonus in an amount that
is usual and customary in the investment banking business for investment
opportunities actually completed by the Company subject to set-off of the $560
additional compensation. In 2000, other compensation in the amount of $1,650 to
be paid over three years, was earned by Atlas in connection with the acquisition
by the Company of the North American Intermodal Division of Transamerica. As of
October 2000, the Consulting Agreement was terminated with the exception of the
deferred compensation related to the acquisition of Transamerica. Mr. Gordon
resigned as an officer and director of the Company in 2003.

Chassis Holdings I, LLC

The Ivy Group, a New Jersey general partnership composed
directly or indirectly of Martin Tuchman, Radcliff Group, Inc., Raoul J.
Witteveen, Thomas P. Birnie and Graham K. Owen, has previously leased chassis to
Trac Lease, Inc. (Trac Lease). As of December 31, 2000, pursuant to various
equipment lease agreements, Trac Lease leased 6,047 chassis from The Ivy Group
and its principals for an aggregate annual lease payment of approximately
$2,900. On January 1, 2001, the various leases for the 6,047 units were combined
into a single lease pursuant to which The Ivy Group and its principals were paid
an aggregate lease payment of $2,691 through June 30, 2001. On July 1, 2001, the
Company restructured its relationship with The Ivy Group and its principals to
provide the Company with managerial control over 6,047 chassis previously leased
by Trac Lease, a wholly owned subsidiary of the Company, from The Ivy Group. As
a result of the restructuring, the partners of The Ivy Group contributed these
6,047 chassis and certain other assets and liabilities to a newly formed
subsidiary, Chassis Holdings I LLC (Chassis Holdings), in exchange for $26,000
face value of preferred membership units and 10% of the common membership units,
and Trac Lease contributed 902 chassis and $2 in cash to Chassis Holdings in
exchange for $3,000 face value of preferred membership units and 90% of the
common membership units. The preferred membership units are entitled to receive
a preferred return prior to the receipt of any distributions by the holders of
the common membership units. The value of the contributed chassis was determined
by taking the arithmetic average of the results of independent appraisals
performed by three nationally recognized appraisal firms in connection with the
Company's establishment of a chassis securitization facility in July 2000. As
the managing member of Chassis Holdings, Trac Lease exercises sole managerial
control over the entity's operations. Chassis Holdings leases all of its chassis
to Trac Lease at a rental rate equal to the then current Trac Lease fleet
average per diem. Chassis Holdings and the holders of the preferred membership
units are party to a Put/Call Agreement which provides that the holders of
preferred units may put such units to Chassis Holdings under certain
circumstances and Chassis Holdings may redeem such units under certain
circumstances. Chassis Holdings will be required to make certain option payments
to the holders of the preferred membership units in order to preserve its right
to redeem such units.

Based on 90% common unit ownership held by Trac Lease, the
Company's Consolidated Financial Statements include the accounts of Chassis
Holdings. The Ivy Group's interest in the common and preferred units of Chassis
Holdings of approximately $26,326 is classified as minority interest in equity
of subsidiaries in the accompanying Consolidated Balance Sheets. Dividends paid
on the common units and distributions on the preferred units owned by The Ivy
Group, totaling $3,120 and $1,651 for the years ended December 31, 2002 and
2001, are included in minority interest (income)/expense, net in the
accompanying Consolidated Statements of Income.

Trac Lease previously leased an additional 983 chassis from The
Ivy Group under a lease with buyout provisions expiring in 2000. In 2000 Trac
Lease paid The Ivy Group lease payments of $252 under this agreement. Trac Lease
exercised its buyout right under the lease during 2000 and purchased the chassis
for $2,212.

During 1992 through 1996, The Ivy Group borrowed $13,433 from
the Company which bears interest at LIBOR plus 1.75%. On July 1, 2001, the
aggregate loan balance of $13,433 along with 6,047 chassis and certain other
assets were contributed to Chassis Holdings as part of the Company's
restructuring of its relationship with The Ivy Group.

The members of the Board of Directors have unanimously
determined that the terms of all arrangements between The Ivy Group and Trac
Lease, including the formation of Chassis Holdings, are beneficial and fair to
the Company.

PCR Transactions

In July 2000, Yardville National Bank (a subsidiary of an entity
in which the Company's CEO owns approximately five percent of the common stock
and serves on the Executive Committee) extended a revolving credit facility of
$2,500 to PCR, secured by substantially all of PCR's assets. On August 31, 2000
this facility was increased to $5,000. Amounts due under this facility amounted
to $828 and $3,744 at December 31, 2001 and 2000, respectively.

In connection with the sale of PCR in December 2001, Martin
Tuchman and Raoul Witteveen agreed in March 2002 to guarantee this line of
credit between PCR and Yardville National Bank which had been reduced to $3,000
and the Company was released from a guarantee it had previously executed. This
guarantee was subsequently paid off through advances made to PCR by The Ivy
Group. PCR's line of credit with Yardville National Bank was reduced to $1,656
in March 2002 and later increased to $2,000 in September 2002. Advances
amounting to $1,983 and $698 in 2002 and 2003, respectively, were made to PCR by
The Ivy Group to pay off borrowings under the line of credit and to provide
working capital. The Ivy Group is a partnership controlled by certain current
and former officers and directors of the Company. The advances made by The Ivy
Group to PCR are considered capital contributions to the Company and payments by
the Company to PCR. The payments to PCR have been determined to be uncollectible
and have been expensed by the Company and included in other (income)/expense,
net. Payments made in 2002 amounting to $1,983 have been included in additional
paid in capital. The remaining payments made in 2003 of $698 have been included
in accounts payable and accrued expenses and will be reclassified to additional
paid in capital in the period when the payments were made.

Bank Loans

In September 2000, Yardville National Bank provided a revolving
line of credit to the Company. The line of credit was initially $9,750 and was
secured by equipment and the related leases. The interest rate was Yardville
National Bank's base interest rate minus .5%. The Company utilized a portion of
this facility from inception through April 2002 when the loan balance was paid
and the facility ended.

Summary of Related Party Transactions

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

`2002       2001      2000
                                                  ----       ----      ----
       Revenue                                    $---       $496    $1,104
                                                  ====       ====    ======
       Lease operating expense                  $3,234     $4,343    $3,033
                                                ======     ======    ======
       Administrative expense                     $741     $1,379    $1,061
                                                  ====     ======    ======
       Other (income)/expense, net              $2,763       $---      $---
                                                ======     ======    ======
       Interest expense                            $40       $452      $331
                                                   ===       ====      ====`

Subsequent Events-Bank Loans - (unaudited)

In April 2003 and August 2003 the Company borrowed $16,000 and
$7,000, respectively, from Yardville National Bank. The term of the $16,000 loan
is three years with thirty-four fixed monthly principal payments of $250
commencing May 25, 2003 and a final principal payment of $7,500 due on March 25,
2006. Interest is payable monthly, at an initial rate of 4.25%, and is adjusted
monthly based on the prime rate as published in the Wall Street Journal subject
to a 4% minimum and 5% maximum per annum rate.

The term of the $7,000 loan is five years with fifty nine
monthly principal payments of $75 commencing September 7, 2003 and a final
principal payment of $2,575 due on August 7, 2008. Interest is payable monthly,
at an initial rate of 4%, and is adjusted monthly based on the prime rate as
published in the Wall Street Journal subject to a 4% minimum and 6% maximum per
annum rate.

In connection with our borrowings from Yardville National Bank,
our Board of Directors unanimously determined that the interest rate and other
terms of such borrowings were at least as favorable to us as could have been
obtained in an arms'-length transaction with an unrelated third party.

|(15) | Relationship with CAI:
|---- | ----------------------

The Company holds a 50% common equity interest in CAI, which it
acquired in April 1998. CAI owns and leases its own fleet of containers and
manages, for a fee, containers owned by the Company and third parties. The
Company entered into its operating relationship with CAI primarily to facilitate
the rental in the short-term market of containers coming off long-term lease, to
gain access to new companies looking to lease containers on a long term basis
and to realize cost efficiencies from the operation of a coordinated container
lease marketing group. The marketing group, which is organized as a wholly-owned
subsidiary of the Company, is responsible for soliciting container lease
business for both the Company and CAI, including long-term and direct finance
lease business and short-term lease business on master lease agreements. All
long-term and direct finance lease business is purchased by the Company, except
that the Company offers to CAI, at cost, 10% of this long-term and direct
finance lease business. During 2002, CAI sold containers to Interpool in the
amount of $38,705 and recorded a gain on these sales of $5,102. This income has
been eliminated from the accompanying Consolidated Financial Statements.

The 50% equity interest in CAI not held by the Company is owned
by CAI's chief executive officer. Under the terms of a Shareholder Agreement
entered into in 1998 between the Company and CAI's chief executive officer,
since an initial public offering for the registration and sale of CAI's common
stock has not been initiated before April 2003, CAI's chief executive officer
has the right to have an independent valuation of CAI completed on an annual
basis to determine the fair value of CAI. An independent valuation of CAI has
not been initiated. However, following the completion of such an appraisal, the
Company has the right to make a written offer to acquire the chief executive
officer's equity for an amount equal to 50% of the fair value of CAI as
indicated in the appraisal. If an offer is not made by the Company, CAI's chief
executive officer has a right to require CAI to take the necessary steps to
effect an initial public offering to sell his equity. All costs associated with
an initial public offering of CAI would be borne by CAI.

In connection with the acquisition of its equity interest in
CAI, the Company loaned CAI $33,650 under a Subordinated Note Agreement (Note),
which is collateralized by all containers owned by CAI as of April 30, 1998 or
thereafter acquired, subject to the priority security interest lien of CAI's
senior credit facility, except for certain excluded collateral. Interest on the
Note is calculated at an annual fixed rate of 10.5% payable quarterly. The
original repayment terms required mandatory quarterly principal payments of
$1,683 beginning July 30, 2003 through April 30, 2008. The Note was subject to
certain financial covenants and was cross-defaulted with CAI's senior credit
facility, subject to the terms of a subordination agreement.

On June 27, 2002, CAI entered into an amended $110,000 senior
revolving credit agreement with a group of financial institutions. To facilitate
the closing of this new credit facility, the Company agreed to extend the
repayment terms of its Note so as to require mandatory quarterly principal
payments of $1,683 beginning July 30, 2006 through April 30, 2011 and modified
certain financial covenants in the Note. Interest on the Note continues to
accrue at an annual fixed rate of 10.5% and is payable quarterly. The Note
continues to be cross-defaulted with CAI's senior credit agreement, subject to
the terms of an amended and restated subordination agreement. At the same time,
the Company was granted the right to appoint a majority of CAI's board of
directors. As a result of these transactions and gaining a majority position on
CAI's board, the Company's financial statements include CAI as a consolidated
subsidiary commencing June 27, 2002. Previously, CAI was accounted for under the
equity method of accounting. The Company's share of the equity earnings (losses)
of CAI for the periods from January 1, 2002 through June 26, 2002 have been
recorded in "Income/(loss) for Investments Accounted for Under the Equity
Method" in the accompanying Consolidated Statements of Income. For the period
from June 27 through December 31, 2002, CAI's results of operations have been
included in the appropriate captions on the accompanying Consolidated Statements
of Income. The assets and liabilities of CAI at December 31, 2002, after
elimination of intercompany transactions, have been included on the accompanying
Consolidated Balance Sheets.

A total of $74,000 was outstanding under CAI's senior revolving
credit facility at December 31, 2002. Borrowings under CAI's senior credit
facility are secured by substantially all CAI's assets, other than certain
excluded assets, and are payable on June 27, 2005. The senior credit facility
contains various financial and other covenants. At June 30, 2002, CAI would not
have been in compliance with one of the financial covenants then contained in
its senior credit facility as well as similar covenants under two master lease
agreements relating to equipment in CAI's fleet. CAI received amendments to
these covenants in September 2002 which were made retroactive to June 30, 2002.
As a result, CAI was in compliance as of June 30, 2002 with all senior credit
facility and lease covenants as amended and continued to be in compliance as of
December 31, 2002.

The senior credit facility was amended in May 2003 to increase
the letter of credit commitment by the lenders' administrative agent.

In addition, CAI has entered into numerous sale-leaseback
transactions with third parties pursuant to which CAI sells maritime shipping
containers to such third parties and then leases the shipping containers back
from such third parties. In connection with such transactions, CAI has entered
into the following lease agreements:

CAI entered into a master lease agreement dated April 30, 1998,
as amended, which amends and restates a prior agreement dated July 17, 1996,
pursuant to which CAI currently leases shipping containers from a banking
corporation. The master lease agreement has an expiration date of July 31, 2008.
CAI is required to make regular payments to lessor and, as of December 31, 2002,
CAI's total outstanding obligation under this lease agreement was approximately
$23.2 million. CAI has the option to purchase the leased equipment on a date
prior to the expiration of the initial term of the lease agreement or at the
time of such expiration. In addition, upon the expiration of the initial term of
the lease agreement, CAI has the right to extend the lease agreement for one
year or return the leased equipment to lessor under the terms and conditions set
forth in the lease agreement. This lease agreement was amended in 2002 to
include certain additional negative covenants and financial covenants of CAI.
The lease agreement was amended in May 2003 to provide for a rent prepayment
under the lease agreement in the approximate amount of $3.75 million to the
lessor.

CAI entered into a master lease agreement dated April 30, 1998,
as amended, which amends and restates a prior agreement dated November 21, 1996,
pursuant to which CAI currently leases shipping containers from a banking
corporation. The master lease agreement has a term of ten years. CAI is required
to make regular payments to lessor and, as of December 31, 2002, CAI's total
outstanding obligation under this lease agreement was approximately $5.6
million. CAI has the option to purchase the leased equipment on a date prior to
the expiration of the initial term of the lease agreement or at the time of such
expiration. In addition, upon the expiration of the initial term of the lease
agreement, CAI has the right to extend the lease agreement for one year or
return the leased equipment to lessor under the terms and conditions set forth
in the lease agreement. This lease agreement was amended in 2002 to include
certain additional negative covenants and financial covenants of CAI.

The assets and liabilities of CAI reflected in the consolidated
financial statements at December 31, 2002, after recording the effect of
elimination entries with the Company, are as follows:

`Cash and short term investments                                                  $4,618
Accounts and notes receivable                                                    23,480
Net investment in direct financing leases                                         2,042
Leasing equipment, net of accumulated depreciation and amortization             141,103
Other assets                                                                      2,762

Accounts payable and accrued expenses                                           $33,959
Income taxes                                                                      8,454
Deferred income                                                                     527
Debt and capital lease obligations                                               74,000
Minority interest                                                                 8,415`

During the period from 1998 to March 2002, there were several
inter-company transactions wherein Interpool acquired equipment, and the related
leases from CAI, at terms that resulted in a profit for CAI. These transactions
were negotiated on an arms-length basis and management believes that the terms
are similar to those that a third party would have negotiated with CAI under the
circumstances.

During 2002, Interpool paid CAI $2,189 for the management of its
equipment.

Subsequent to June 27, 2002, revenues and expenses for
transactions between the Company and CAI are eliminated in consolidation.
Minority interest income recorded by the Company for the year ended December 31,
2002 was $1,306 for periods subsequent to June 27, 2002.

|(16) | Retirement plans:
|---- | -----------------

Certain subsidiaries have defined contribution plans covering
substantially all full-time employees. Participating employees may make
contributions to the plan, through payroll deductions. Matching contributions
are made by the Company equal to 75% of the employee's contribution to the
extent such employee contribution did not exceed 6% of their compensation.
During the years ended December 31, 2002 and 2001, the Company expensed
approximately $423 and $461, respectively related to this plan. No contributions
were made by the Company or its subsidiaries to these plans during the year
ended December 31, 2000.

|(17) | Segment and geographic data:
|---- | ----------------------------

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 leasing and computer equipment leasing.
The container leasing segment specializes in the leasing of dry freight standard
containers, while the domestic intermodal equipment segment specializes in the
leasing of intermodal container chassis and freight rail cars. The computer
leasing segment specializes in the leasing of microcomputers and other related
equipment.

The Company's computer leasing segment consisted of two
subsidiaries, Microtech Leasing Corporation (Microtech) and Personal Computer
Rentals (PCR). During the third quarter of 2001, Company management adopted a
plan to exit this segment. As of December 31, 2002 the assets of Microtech
continued to be liquidated and PCR's financial condition had deteriorated. PCR
ceased active operations and began to liquidate in 2003. (See Note 2 and Note 9
to the Consolidated Financial Statements.) At December 31, 2002, expenses
related to the ongoing liquidation of PCR are included in the Domestic
Intermodal Equipment segment.

Beginning June 27, 2002 the container leasing segment includes
revenues and expenses and related balance sheet accounts for CAI, previously
accounted for under the equity method of accounting.

The accounting policies of the segments are the same as those
described in Note 1. The Company evaluates performance based on profit or loss
before income taxes and extraordinary items. The Company's reportable segments
are strategic business units that offer different products and services.

Segment Information:

`Domestic       Computer
                                                              Container      Intermodal       Leasing
                              2002                             Leasing        Equipment      Equipment       Totals
                              ----                             --------       ---------      ---------       ------

      Revenues from external customers                         $140,320        $185,283       $1,521       $327,124

      Lease operating, administrative and other expenses         34,554          80,634        2,087        117,275

      Depreciation and amortization                              55,757          37,703           78         93,538

      Other (income)/expense, net                               (3,052)           4,579         1450          2,977

      (Income)/loss investment under equity method                  ---           6,603          ---          6,603

      Interest income                                           (2,215)         (2,395)          ---        (4,610)

      Interest expense                                           27,183          81,016          146        108,345

      Income before taxes and change in accounting
      principle                                                  28,093        (22,857)      (2,240)          2,996

      Net investment in DFL's                                   245,414          89,254        (539)        334,129

      Leasing equipment, net                                    676,091         880,725          ---      1,556,816

      Equipment purchases                                        85,585         170,342           99        256,026

      Total segment assets                                   $1,074,322      $1,163,404       $3,395     $2,241,121`

`Domestic     Computer
                                                         Container      Intermodal     Leasing
                       2001 Restated:                     Leasing       Equipment     Equipment      Totals
                       -------------                      --------      ----------    ---------      ------

   Revenues from external customers                       $111,362       $191,987       $35,369      $338,718

   Lease operating, administrative and other expenses       28,017         86,038        32,083       146,138

   Depreciation and amortization                            34,999         37,997         6,682        79,678

   Other (income)/expense, net                              (5,351)        (4,501)         (385)      (10,237)

   (Income)/loss investment under equity method                ---            804           ---           804

   Interest income                                          (3,789)        (5,650)          ---        (9,439)

   Interest expense                                         28,025         68,465         1,780        98,270

   Income before taxes and change in accounting

   principle                                                29,461          8,834        (4,791)       33,504

   Net investment in DFL's                                 190,565         80,297         4,510       275,372

   Leasing equipment, net                                  502,888        831,784           115     1,334,787

   Equipment purchases                                     214,065        106,983         7,114       328,162

   Total segment assets                                   $816,318     $1,085,796       $20,115    $1,922,229`

`Domestic     Computer
                                                         Container      Intermodal     Leasing
                       2000 Restated:                     Leasing       Equipment     Equipment     Totals
                       -------------                      --------      ----------    ---------     ------


 Revenues from external customers                         $105,903      $136,750      $44,900       $287,553

 Lease operating, administrative and other expenses         14,619        47,716       32,006         94,341

 Depreciation and amortization                              28,448        29,989        7,638         66,075

 Other (income)/expense, net                                 1,186           965          209          2,360

 (Income)/loss Investment under the equity method              ---           598          ---            598

 Interest income                                            (5,984)      (11,253)         ---        (17,237)

 Interest expense                                           33,079        52,096        2,634         87,809

 Income before taxes and change in accounting principle     34,555        16,639        2,413         53,607`

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:

`REVENUES:
                                                        2001               2000
                                       2002            Restated           Restated
                                       ----            --------           --------
   United States (a)                  $207,786         $227,419           $181,725
   International                       119,338          111,299            105,828
                                       -------          -------            -------
                                      $327,124         $338,718           $287,553
                                      ========         ========           ========

   ASSETS:
   United States                    $1,341,507         $1,106,043
   International                       899,614            816,186
                                    ----------         ----------
                                    $2,241,121         $1,922,229
                                    ==========         ==========`

(a) Includes revenues from related parties of $0, $496, and $1,104 in 2002, 2001
and 2000, respectively.

|(18) | 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 to outside
investors 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. 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 104.9375% 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.

|(19) | 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
had 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 but 22,500 of the
4,393,501 options then outstanding under its 1993 Stock Option Plan for
Executive Officers and Directors and the Company's Nonqualified Stock Option
Plan for Non-employee, Non-consultant Directors and issued 4,371,001 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 1999, 13,500 options were exercised.

In connection with the resignation of Raoul Witteveen, the
Company entered into a separation agreement that allows for Mr. Witteveen's
outstanding stock options, all of which were fully vested as of the date of his
resignation, to be exercisable until October 9, 2005. Mr. Witteveen's future
sale of common stock will be subject to certain volume restrictions and a right
of first refusal on the part of the Company and its affiliates.

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 Herbert Mertz, Executive Vice President and
Chief Administrative Officer of the Company and Chief Operating Officer of 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.

On October 10, 2000, options to purchase 50,000 shares of the
Company's common stock were granted to Mitchell I. Gordon. On September 5, 2002,
options to purchase an additional 50,000 shares of the Company's common stock
were granted. The newly issued options were granted under the 1993 Stock Option
Plan for Executive Officers and Directors with an exercise price equal to the
closing market price of the Company's stock as of the grant date. The options
were to vest 20% per year beginning January 1, 2003 and expire ten years from
the grant date. In connection with the resignation of Mitchell I. Gordon, the
Company entered into a separation agreement that provided for the immediate
vesting of the options. The compensation cost, to be recognized by the Company
in July 2003, as a result of the immediate vesting of these options will be
approximately $542.

As of December 31, 2002 there were 1,559,999 shares of common
stock reserved for issuance under the stock option plans.

Changes during 2000, 2001 and 2002 in options outstanding for
the combined plans were as follow:

`2002                 2001                        2000
                                ------------------------    --------------------    -------------------
                                            Weighted                   Weighted              Weighted
                                             average                   average               average
                                            exercise                   exercise              exercise
                                Shares        price        Shares      price      Shares     price
                              ------------------------------------------------------------------------
Outstanding at January 1,     4,489,001      $10.30     4,489,001      $10.30   4,380,001    $10.28

Granted                          50,000       13.73           ---      ---        115,000     11.21
Exercised                           ---      ---              ---      ---            ---    ---
Cancelled                           ---      ---              ---      ---          6,000     10.25
                              ----------------------------------------------------------------------

Outstanding at December 31,   4,539,001      $10.34     4,489,001      $10.30   4,489,001    $10.30

Exercisable at December 31,   4,384,001      $10.27     4,379,001      $10.27   4,374,001    $10.28`

The following table summarizes information regarding stock
options outstanding at December 31, 2002.

`Options Outstanding                         Options Exercisable
                                 -------------------                         -------------------
                                         Weighted
                                          Average        Weighted                      Weighted
                          Number         Remaining        Average        Number        Average
      Range of          Outstanding     Contractual      Exercise      Outstanding     Exercise
   Exercise Prices     December 31,     Life (Years)       Price      December 31,      Price
-------------------------------------------------------------------------------------------------

     $6.375                 15,000           7.2           $6.375          10,000        $6.375

     10.25               4,351,501           5.7           10.25        4,351,501        10.25

     11.9375               100,000           7.8           11.9375            ---        ---

     13.73                  50,000           9.7           13.73              ---        ---

     15.58                  22,500           5.7           15.58           22,500        15.58
-------------------------------------------------------------------------------------------------

     $6.375-15.58        4,539,001           5.80         $10.34        4,384,001       $10.27`

Common stock dividends declared and unpaid at December 31, 2002
and 2001 amounted to $2,101 and $1,517, respectively, 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.

In December 2002, the FASB issued SFAS No. 148, Accounting for
Stock-Based Compensation ("SFAS 148"). This Statement amends FASB Statement
No. 123, Accounting for Stock-Based Compensation, to provide alternative methods
of transition for an entity that voluntarily changes to the fair value based
method of accounting for stock-based employee compensation. It also amends the
disclosure provisions of that Statement to require prominent disclosure about
the effects on reported net income of an entity's accounting policy decisions
with respect to stock-based employee compensation. Finally, this Statement
amends Accounting Principles Board ("APB") Opinion No. 28, Interim Financial
Reporting, to require disclosure about those effects in interim financial
information. The disclosure provisions of SFAS 148 are effective for financial
statements for fiscal years ending after December 15, 2002. The Company adopted
SFAS 148 at December 31, 2002.

At December 31, 2002, the Company had two stock option plans.
The Company accounts for these plans under the recognition and measurement
principles of APB Opinion No. 25, Accounting for Stock Issued to Employees, and
related Interpretations. No stock-based employee compensation cost is reflected
in net income, as all options granted under those plans had an exercise price
equal to the market value of the underlying common stock on the date of
grant.

Deferred Bonus Plan

In November 2002, the Company's Board of Directors approved a
Deferred Bonus Plan (the "Plan") under which employees of Interpool and its
affiliates who receive discretionary year-end bonuses of greater than $50,000
would receive such bonuses partly in cash and partly in the form of an award of
Interpool common stock. Under the Plan the first $50,000 of a participant's
bonus amount is paid in cash. Any amount exceeding $50,000 but less than
$150,000 shall be 50% in cash and 50% in stock. Any bonus amount which exceeds
$150,000 shall be 100% in stock. Bonus stock awards under this plan would vest
in equal installments over a five-year period, unless the recipient elected to
have the award vest over a ten-year period or the Board of Directors specified
another period. The unvested portion of any bonus stock award will vest
immediately if a change in control of Interpool occurs, if the employee is
terminated without cause, if the employee resigns for a good reason, if the
employee dies or becomes permanently disabled, or in any other circumstance
deemed appropriate by the Board of Directors. If a recipient resigns voluntarily
without a good reason or is terminated for cause the employee would forfeit any
unvested portion of any bonus stock award.

The number of shares of stock to be awarded is calculated by
dividing the dollar value of the stock portion of the bonus by the average stock
price for the last ten trading days ending on December 31 of the grant
year.

Additional stock is awarded based on the vesting period selected
by the employee. If the five year vesting period is selected, the shares awarded
will be increased by 10%. If the ten year vesting period is selected the shares
awarded will be increased by 30%. Under the plan, each employee granted a bonus
stock award has a right from time to time to require the Company to purchase a
total number of shares of stock equal to the number of shares of stock
underlying the Participant's Bonus Stock Award. The shares may be vested shares
or shares which were otherwise acquired by the participant providing that all
shares were beneficially owned by the participant for at least 6 months. The
purchase price shall be equal to the fair market value of a share of stock on
the trading day preceding the date of such purchase. The bonus stock award for
the Plan Year ending December 31, 2002 was granted on January 2, 2003. The total
stock award for all employees, considering the vesting period selected by the
employee, amounted to 139,067 shares, awarded to twelve employees of which 4,641
vest over a five year period; 74,019 vest over a ten year period and 60,407 have
lapsed.

Share Repurchases

In 1999, the Company authorized the repurchase of 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. During
2002, the Company purchased 9,300 shares for an aggregate purchase price of
$130. During 2001, the Company purchased 58,100 shares for an aggregate purchase
price of $929. No shares were repurchased in 2000.

|(20) | Gain on Sale of Land:
|---- | ---------------------

In April 2002, the Company sold an industrial property and
recorded a gain of $4,766, which is included in other (income)/expense, net for
the year ended December 31, 2002 in the accompanying consolidated statements of
income.

|(21) | Subsequent Events (unaudited):
|---- | ------------------------------

Financing Activities: The Company funds a
significant portion of the purchase price for new containers and chassis through
borrowings under its revolving credit agreement and other lines of credit or
through secured financings with the financial institutions. While the Company
has successfully completed several financings during 2003 (as further discussed
below), the Company's ability to borrow funds on favorable terms has been
severely limited since March 31, 2003 because of the restatement to its
historical financial statements and the related Audit Committee and SEC
investigations and the delay in completing its audited 2002 financial statements
and filing its Annual Report on Form 10-K for 2002. This has required the
Company to reduce the level of new business it has written with
customers.

Manufacturer Obligations: In the past, the Company
has paid its equipment manufacturers for acquisitions of containers and chassis
within normal trade terms. The Company has recently been unable to make payments
on this schedule because of the limited availability of new financings and has
deferred a substantial portion of its payment obligations to these
manufacturers. As of December 22, 2003, the total amount the Company owed to
these manufacturers for equipment already delivered (most of which has been
placed into service in its fleet) or committed to purchase was approximately
$120,500. Of this amount, $54,600 of such trade debt is represented by
promissory notes the Company issued to these manufacturers during 2003, each of
which originally provided for payment in full by November 30, 2003. The Company
has advised its manufacturers that it intended to satisfy a substantial portion
of the outstanding balance of these obligations in December 2003, with the
remaining balances to be paid in January and February 2004 and the Company's
manufacturers have consented to this payment schedule. In late December 2003,
the Company made payments of approximately $54,000 of its manufacturer
obligations. The Company currently intends to fund its remaining payment
obligations to these manufacturers with proceeds from one or more financings
that are currently in process. None of these financings is assured and each of
them remains subject to documentation and other customary closing conditions
before it can be consummated. The Company may also elect to fund a portion of
its obligations to these manufacturers through use of its available cash
(subject to obtaining approval from certain lenders which have restricted our
use of cash). The Company may seek further deferrals from these
manufacturers.

Debt Modifications: Throughout 2003, in connection
with obtaining necessary waivers from lenders for late filing of the Company's
periodic reports with the SEC and the restatement of its past financial
statements, the Company agreed to certain modifications to its existing debt
agreements as follows:

| |  | The Company's container securitization facility was amended to
relinquish the Company's right to request additional advances under the facility
and the Company agreed that all lease payments subsequently received under the
facility would be used to reduce the indebtedness. In addition, the Company
agreed to comply with several new covenants, consistent with those contained in
the amendment to its revolving credit agreement, as described below.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | In May 2003, the Company established a $200,000 revolving
warehouse facility within its chassis securitization facility and received
funding from a $25,500 debt obligation issuance. In July 2003 and October 2003,
the Company agreed, among other things, to suspend its ability to incur
additional funding under the warehouse facility until such time as the loan and
guarantee parties have each agreed in their sole discretion to reinstate their
funding commitments. The loan and guarantee parties are under no obligation to
reinstate any commitments to the warehouse facility.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | In July 2003, October 2003 and January 2004, in connection with
obtaining necessary amendments under the revolving credit facility due to the
late filing of the Company's periodic reports with the SEC and the restatement
of its past financial statements, the Company agreed, among other things, to
reduce advance rates under this facility, to add several events of default, to
increase the interest rate margin until the Company is in compliance with all
SEC reporting requirements, and to maintain specified levels of unrestricted
cash and cash equivalents until delinquent SEC filings are made. The Company
agreed to maintain unrestricted cash and cash equivalents of at least $71,000 at
all times and at least $80,000 as of the last business day of each month, until
the Company's Form 10-K is filed. Thereafter, the Company agreed to maintain at
least $60,000 at all times and at least $67,500 as of the last business day of
the month until receipt of all delayed financial statements. This minimum cash
requirement was also adopted in the waivers for the container securitization and
one other loan agreement. The Company also agreed to restrictions on
dispositions of collateral and on encumbrances of assets as well as a limitation
on concessions that could be made to its other financial institutions in
connection with obtaining waivers. The October 2003 amendment also required the
Company to provide additional financial information to the lenders under the
facility and to continue the engagement of a financial advisor.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | In addition to the debt specifically identified above, the Company
had additional notes and loans outstanding with various financial institutions
totaling $111,667, as of December 31, 2002, with installments payable in varying
amounts through 2009 with interest rates of approximately 2.61% to 9.95%. In the
fourth quarter of 2003, the Company agreed to certain modifications to the
provisions of some of these instruments. These modifications include in certain
instances changes to the amortization schedule resulting in accelerated
principal payments totaling approximately $16,634 to be paid in 2004 and 2005,
an interest rate increase on $23,842 of debt outstanding and the pledging of
additional collateral with a value of $36,799.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | In April 2003, in connection with a borrowing under the container
securitization, the Company entered into an interest rate swap agreement with an
original notional amount of $31,240. This swap contract (which qualifies as a
cash flow hedge) matures in 2009 and the swap is used to manage interest rate
risks on the floating rate borrowings in the securitization facility. In May
2003, in connection with a borrowing under the chassis revolving warehouse
securitization facility, the Company entered into an interest rate swap with an
original notional amount of $25,490. This swap contract (which qualifies as a
cash flow hedge) matures in 2014 and the swap is used to manage interest rate
risks on the floating rate borrowings in the chassis revolving warehouse
securitization facility.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

New Borrowings: In addition to additional
financing under the Company's container and chassis securitizations of $33,500
and $25,490, respectively and the additional borrowing of $40,000 under its
revolving credit facility, the Company entered into new finance arrangements
with a variety of financial institutions totaling $85,356. Interest rates on
these borrowings are variable and currently range from 4% to 6.5% and the debt
matures between March 2006 and June 2010. Included in these borrowings are
$16,000 and $7,000 from Yardville National Bank a subsidiary of an entity in
which Martin Tuchman owns approximately five percent of the common stock and
serves on the Executive Committee. The term of the $16,000 loan is three years
with thirty four fixed monthly principal payments of $250 commencing May 25,
2003 and a final principal payment of $7,500 due on March 25, 2006. Interest is
payable monthly, at an initial rate of 4.25%, and is adjusted monthly based on
the prime rate as published in the Wall Street Journal subject to a 4% minimum
and 5% maximum per annum rate. The term of the $7,000 loan is five years with
fifty-nine fixed monthly principal payments of $75 commencing September 7, 2003
and a final principal payment of $2,575 due on August 7, 2008. Interest is
payable monthly, at an initial rate of 4%, and is adjusted monthly based on the
prime rate as published in the Wall Street Journal subject to a 4% minimum and
6% maximum per annum rate.

Chassis Distribution Agreement: In April 2003,
the Company agreed to become a 50% owner, through an initial investment of $500,
of a limited liability company (the "LLC") formed with a foreign chassis
manufacturer. The purpose of the LLC is to be the exclusive worldwide
distributor of chassis built by this manufacturer and for the Company to share
in the profits the LLC earns in selling these chassis to third parties. Under
the terms of the Distribution agreement for this equipment, the Company has
agreed to purchase approximately 15,000 chassis at preferred pricing over a
ten-year period, of which 1,100 chassis were ordered by the Company during 2003.
The LLC began operations during the second quarter of 2003. The financial
statements of the LLC will be consolidated by the Company.

Separation Agreements:

On July 17, 2003, Mitchell I. Gordon, who had been the Company's
Executive Vice President and Chief Financial Officer, resigned as an employee
and officer of the Company. Pursuant to his resignation, the Company entered
into a separation agreement under which Mr. Gordon received a payment of $200
(his accrued bonus for 2003) and an additional payment of $800 and over the next
four years will receive other payments totaling an additional $3,200. In the
event of a change of control of the Company these payment obligations would
accelerate. In accordance with the terms of the separation agreement, Mr. Gordon
will continue to receive certain benefits over the next five years including
health, life, disability and accident insurance as well as a car allowance, at
the same cost to Mr. Gordon as if Mr. Gordon had continued to be an executive
officer of the Company. Mr. Gordon also is provided an office allowance. The
cost to the Company of these continued benefits to the former executive is
expected to amount to approximately $107. The separation agreement provided for
the immediate vesting of Mr. Gordon's stock options. Under the separation
agreement, Mr. Gordon agreed to provide certain consulting services to the
Company. In October 2003, Mr. Gordon submitted a letter to the Board of
Directors resigning from his positions as a director of the Company and its
affiliates.

On October 9, 2003, Raoul Witteveen, who had served as the
Company's President and Chief Operating Officer, resigned as an employee,
officer and director of the Company and its affiliates. At the time of his
resignation, the Company and Mr. Witteveen reached an understanding regarding
the severance and other principal terms that would be set forth in a separation
agreement to be entered into between them. Under the terms agreed upon, Mr.
Witteveen will receive an amount equal to his full 2003 annual base salary
($633) for each year through October 9, 2005 as well as health, life, disability
and accident insurance and reimbursements through the same date. Mr. Witteveen
will also be provided with an office allowance, an allowance for an executive
assistant, and an automobile allowance, in each case through October 9, 2004.
The cost to the Company of these continued benefits to Mr. Witteven is expected
to amount to approximately $211. It was also agreed that Mr. Witteveen's
outstanding stock options, all of which were fully vested as of the date of his
resignation, will be exercisable until October 9, 2005, and that Mr. Witteveen's
future sale of common stock will be subject to certain volume restrictions and a
right of first refusal on the part of the Company and its affiliates. As part of
the separation agreement, Mr. Witteveen will agree not to engage in a competing
business, either directly or indirectly, for a period of two years from his
resignation date. A definitive separation agreement incorporating these terms has
been prepared but to date has not yet been executed by the Company or by Mr.
Witteveen.

Rating Agency Downgrades:

During October and November, 2003, the ratings on the Company's debt
securities were downgraded by three major rating agencies, Standard & Poor's,
Fitch, and Moody's, citing the resignation of its President, continued delay in
issuing audited restated financial statements for 2000 and 2001 and its audited
financial statements for 2002 to be included in our 2002 Annual Report on Form
10-K and the need to obtain waivers from its lending group for technical
defaults under the loan agreements associated with the financial statement
delays. The Company's debt securities were again downgraded by all three rating agencies
following its press release on December 29, 2003, that indicated that release of
its 2000, 2001 and 2002 financial statements and the filing of its 2002 Annual
Report on Form 10-K would again be delayed. Such downgrades may have a negative
effect on the Company's ability to access the capital markets going forward, as well as on
the interest cost.

Delisting by the New York Stock
Exchange:

On December 29, 2003, The New York Stock Exchange (The Exchange)
suspended trading in the Company's common stock and other listed securities and informed
the Company that delisting procedures will be commenced. The Exchange stated that this
action was taken because of the delay in filing of our Annual Report on Form
10-K for the year ended December 31, 2002 and the uncertainty surrounding our
restatement. Although the Company will appeal this decision and hopes that trading on The
New York Stock Exchange will resume once this report is filed with the
Securities and Exchange Commission, it cannot give any assurance that trading in
its securities will resume on The New York Stock Exchange. Since this suspension
took effect, the Company's common stock has been traded on the over-the-counter market
under the symbol IPLI. Information regarding bid and asked prices may be
obtained from the web site maintained by pinksheets.com.

Deferral of Dividend Payment to Board Members:

In connection with the Company's delayed SEC filings and the
receipt of waivers from its lenders necessitated by the delayed filings, the
members of the Company's Board of Directors and certain of its affiliates who
own shares of the Company's common stock have agreed to defer their receipt of
any dividend payments, including those the Company may declare in the future,
until the Company is in compliance with all SEC filings requirements.

|(22) | Quarterly financial data (unaudited):
|---- | -------------------------------------

`2002
                                                      As Reported (a)
                                    ----------------------------------------------------
                                          1st              2nd               3rd
                                          ---              ---               ---
Revenues                                $72,891         $74,426           $86,096

Income/(loss) before cumulative
effect of change in accounting
principle                               $11,403          $6,188            $3,490
Basic income/(loss) per share             $0.42           $0.23             $0.13
Diluted income/(loss) per share           $0.39           $0.21             $0.12


                                                      As Restated (b)
                                    ----------------------------------------------------
                                          1st              2nd               3rd             4th(d)
                                          ---              ---               ---              -----
Revenues                                $74,483          $75,598           $86,718          $90,325

Income/(loss) before cumulative
effect of change in accounting
principle                                $6,190           $4,265            $3,032          $(9,098)
Basic income/(loss) per share             $0.23            $0.16             $0.11           $(0.33)
Diluted income/(loss) per share           $0.21            $0.14             $0.10           $(0.32)


                                                                    2001
                                                               As Reported(a)
                                    ---------------------------------------------------------------------
                                          1st               2nd              3rd              4th
                                          ---               ---              ---              ---
Revenues                                $76,468           $77,653          $74,945          $76,067
Income before cumulative effect of
change in accounting principle          $11,035           $12,465          $10,338           $9,718
Basic income per share                    $0.40             $0.45            $0.38            $0.35
Diluted income per share                  $0.38             $0.43            $0.35            $0.34


                                                              As Restated (b)
                                    ---------------------------------------------------------------------
                                          1st               2nd              3rd              4th
                                          ---               ---              ---              ---
Revenues                                $88,311           $85,315          $82,337          $82,755
Income before cumulative effect of
change in accounting principle          $10,354            $9,879           $2,939           $4,932
Basic income per share                    $0.38             $0.36            $0.11            $0.18
Diluted income per share                  $0.36             $0.34            $0.10            $0.17


                                                                    2000
                                                               As Reported(a)
                                    ---------------------------------------------------------------------
                                          1st               2nd              3rd             4th(c)
                                          ---               ---              ---             ------
Revenues                                $50,529           $54,258          $57,964          $79,504
Income before cumulative effect of
change in accounting principle           $9,564           $10,074          $10,709          $12,293
Basic income per share                    $0.35             $0.37            $0.39            $0.45
Diluted income per share                  $0.35             $0.37            $0.38            $0.43


                                                              As Restated (b)
                                    ---------------------------------------------------------------------
                                          1st               2nd              3rd             4th(c)
                                          ---               ---              ---             ------
Revenues                                $60,839           $66,191          $69,027          $91,496
Income before cumulative effect of
change in accounting principle           $9,225           $11,143          $11,110          $12,562
Basic income per share                    $0.34             $0.41            $0.41            $0.46
Diluted income per share                  $0.34             $0.41            $0.40            $0.44

(a)  The "as  reported"  numbers  for all  periods  presented  have been  adjusted to reflect the reclass of
     extraordinary  gains on retirement of debt to income before  results of cumulative  effect of change in
     accounting  principle  as a result  of  adopting  FAS 145.  (See Note 1 to the  Consolidated  Financial
     Statements.)
(b)  The Company has reflected the impact of the  restatement  adjustments  which are described in Note 2 to
     the  Consolidated  Financial  Statements  for all interim  periods in 2001 and 2000 and for each of the
     first three quarters of 2002.
(c)  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.
(d)  The (loss) before  cumulative  effect of change in accounting  principle  during the fourth  quarter of
     2002 was principally due to pre-tax  impairment losses of $5,715 relating to idle equipment,  $3,417 of
     pre-tax  losses  resulting  from the  Company's  share of equity  losses and  write-downs  for  certain
     investments  accounted for under the equity method and $9,678 of pre-tax losses  recognized as a result
     of the deteriorating financial condition of PCR.`

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

On August 5, 2002, we made a determination not to engage our
former independent accountants, Arthur Andersen LLP, as our independent public
accountants and appointed KPMG LLP as our new independent accountants, effective
immediately. These actions were approved by the Audit Committee of our Board of
Directors.

On August 31, 2002, Arthur Andersen ceased practicing before the
SEC and began to wind up its operations. Arthur Andersen did not participate in
the preparation of this Annual Report on Form 10-K. As stated above, we have
restated our financial statements for the years ended December 31, 2001 and 2000
and our new independent accountants, KPMG LLP, have audited the restated
financial statements for these fiscal years.

During the fiscal years ended December 31, 2001 and December 31,
2000, and the subsequent interim period through August 5, 2002, there were no
disagreements between us and Arthur Andersen LLP on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreement, if not resolved to the satisfaction of Arthur
Andersen LLP, would have caused Arthur Andersen LLP to make reference to the
subject matter of such disagreement in its reports on our consolidated financial
statements for such years, and there occurred no reportable events as defined in
Item 304(a)(1)(v) of Regulation S-K. The audit reports of Arthur Andersen LLP on
our consolidated financial statements for the fiscal years ended December 31,
2001 and December 31, 2000 did not contain an adverse opinion or disclaimer of
opinion, nor were they qualified or modified as to uncertainty, audit scope or
accounting principles.

During the fiscal years ended December 31, 2001 and December 31,
2000, and the subsequent interim period through August 5, 2002, we did not
consult KPMG LLP regarding the application of accounting principles to a
specified transaction, either completed or proposed, or the type of audit
opinion that might be rendered on our consolidated financial statements, or any
of the matters or reportable events set forth in Items 304(a)(2)(i) and (ii) of
Regulation S-K.

ITEM 9A. CONTROLS AND PROCEDURES

The effectiveness of our or any systems of disclosure controls
and procedures and internal controls is subject to certain limitations including
the exercise of judgment in designing, implementing and evaluating the controls
and procedures, the assumptions used in identifying the likelihood of future
events, and the inability to eliminate misconduct completely. As a result, there
can be no assurance that our disclosure controls and procedures and internal
controls will prevent all errors or fraud or ensure that all material
information will be made known to management in a timely fashion.

In September 2002, our independent auditors, KPMG, identified
and reported on material weaknesses within our system of internal control. They
noted that we did not have formal procedures in place that required management
to properly communicate the terms of proposed transactions with internal and
external technical accounting resources to make certain that transactions are
accounted for in accordance with generally accepted accounting principles. As a
result, our accounting personnel were not aware that a transaction entered into
in June 2002 would require us to change the accounting treatment for our
investment in our 50%-owned subsidiary, CAI. In addition, they noted that we did
not have an individual with the proper level of understanding to account for
swap derivatives according to generally accepted accounting principles. In
response to these weaknesses, we:

| |  | Initiated regular meetings of senior management, including
representatives of the Accounting Department, to discuss all new significant
transactions in order to determine the proper accounting treatment under
generally accepted accounting principles and
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Retained the services of a consultant to assist in the proper
documentation and accounting for swap derivative transactions.
| | - | ----------------------------------------------------------------------------------------------------------------------------

During the preparation for our 2002 audit, we discovered
additional deficiencies in our internal controls. We determined that several
finance lease transactions we entered into during 2001 and 2000 had been
accounted for incorrectly in our prior financial statements. Down payments
received from the lessees in these transactions had been erroneously recorded as
revenue when collected rather than as a reduction to the net investment in the
lease. We also determined that we had incorrectly classified our former computer
leasing segment as a discontinued operation instead of as a continuing operation
in our financial statements for the first three quarters of 2002 and for the
years 2001 and 2000. We believe these errors were primarily the result of
inadequate information system capabilities and inadequate communication
processes between executive management and internal and external accounting
resources. As a result of these errors, we determined that it would be necessary
for us to restate our financial statements for the first three quarters of 2002
and for the years 2001 and 2000. We subsequently identified additional items in
our prior financial statements that would also require restatement.

Following the determination to restate our historical financial
statements, the Audit Committee of our Board of Directors engaged as special
counsel a law firm that had not previously represented us to conduct an internal
inquiry into the accounting errors and circumstances requiring restatement of
our previously issued 2001 and 2000 financial statements. Upon completion of
this inquiry, in July 2003 our Audit Committee decided to conduct a broader
investigation of our accounting and related matters and engaged another law firm
that had not previously represented us, Morrison & Foerster LLP, as special
counsel, which in turn engaged the accounting firm of Ernst & Young LLP to
assist with such investigation. Morrison & Foerster LLP, working with Ernst
& Young LLP, conducted a three-month investigation involving interviews of
persons inside and outside the Company, review of e-mails and other
electronically stored documents, and many hours of work by attorneys, forensic
accountants and their staff.

In their report, Morrison & Foerster LLP and Ernst &
Young LLP found that during the period covered by their investigation, critical
facts were frequently communicated haphazardly or not at all by our management
to our Accounting Department. In addition, our general counsel, who was not
located in our executive offices in New York City or Princeton, N.J., was not
always informed about, and was inconsistently consulted regarding, factual and
legal issues critical to our compliance with securities laws and accounting
rules. The report also found that our management was late in responding to
warning signs pointing to inadequate staffing and controls in our Accounting
Department and inadequate information systems capabilities, even though members
of our Audit Committee had repeatedly urged management to respond to these
problems.

In addition, the report raised concerns about management
integrity relating to our former President and Chief Operating Officer, Raoul
Witteveen. Specifically, the investigation found that in September 2001, Mr.
Witteveen had initiated sales and subsequent buy-backs of used chassis in order
to create artificial income during the third quarter of 2001. Our Accounting
Department disallowed the reporting of revenue on these transactions, and the
income was not reflected in our reported financial statements. The report
concluded that Mr. Witteveen's actions were improper. As a result of the
findings in the report, Mr. Witteveen resigned as an officer and director on
October 9, 2003.

The report also found that the improper discontinued operations
accounting and sale accounting treatment given to PCR, our former subsidiary,
resulted from a series of nondisclosures to our auditors of critical facts
concerning Interpool's and related parties' continued financial support for PCR.
However, aside from this series of nondisclosures itself, there was no evidence
of a concerted or collusive effort not to disclose information to the auditors
about our ongoing financial support to PCR. The report also found that our
former Executive Vice President and Chief Financial Officer, Mitchell Gordon,
who resigned as an officer effective July 17, 2003 and as a member of our Board
of Directors effective October 9, 2003, failed to disclose to our auditors
numerous instances of our continuing involvement with PCR, even though the
auditors had instructed him on the accounting rules that applied to our sale of
PCR. The report also found that Mr. Gordon likely attempted to mislead the Audit
Committee investigation. Mr. Gordon has advised us that he disagrees with the findings
in the report. Finally, the report found that the erroneous accounting for down
payments on finance leases in early 2002 was inadvertent.

As a result of our own efforts to evaluate weaknesses in the
design and effectiveness of our internal controls for the years ended December
31, 2002, 2001 and 2000, as well as the Audit Committee investigation, we have
concluded that the following internal control deficiencies which have been
identified constituted "material weaknesses" or "significant deficiencies" as
defined under the standards established by the American Institute of Certified
Public Accountants:

| |  | Deficiencies related to the accounting for direct finance
leases. We noted weaknesses in the technical accounting skills of certain
employees involved in the classification of leases under the provisions of SFAS
13. In addition, we found that the system used to account for these leases was
inadequate in providing the necessary data to the accounting department.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Deficiencies related to ineffective policies for complex
transactions.We noted the weaknesses noted above in the accounting for swap
derivative transactions and residual guarantees provided to certain financial
institutions.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Deficiencies related to inadequate communication of complex
transactions.We noted a lack of effective communication of complex
transactions with both internal and external accounting resources that existed
throughout this period.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Deficiencies related to the lack of adequate staffing within
the accounting department. This resulted in incomplete account
reconciliation and analysis.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Deficiencies related to accounting for income taxes. We
noted that the accounting department did not have adequate knowledge of
generally accepted accounting principles related to accounting for income taxes
and did not perform periodic reviews of the carrying value of its deferred tax
assets.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Deficiencies related to communication of information regarding
related-party transactions. We noted that there were no formal procedures in
place for gathering complete and accurate information about related-party
transactions and for communicating such information to the parties responsible
for disclosing it.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Deficiencies related to the security of information
technology. We noted a need for the implementation of such security measures
as comprehensive encryption procedures, documentation of standards for setting
operating systems security parameters, and a disaster recovery plan.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Deficiencies related to accounting for inter-company
eliminations. We noted a need to implement formal procedures for identifying
necessary intercompany eliminations.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | Deficiencies related to recordkeeping by various internal
departments. We noted a need to improve certain verification and
documentation procedures in our Contracts, Billing, Collections, and Credit
Quality departments to improve the accuracy of the records kept by those
departments.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

In addition to the deficiencies mentioned above, we have
identified other less significant deficiencies that we do not consider "material
weaknesses" or "significant deficiencies" but which we nonetheless believe
should be remedied.

We are continuing to review and evaluate our internal controls
and procedures and may identify additional areas where corrective measures are
advisable or required.

We have assigned the highest priority to the short and long-term
correction of the internal control deficiencies that have been identified and
are taking the steps necessary to strengthen our internal controls and to
address their deficiencies. Among other things, we have taken and are taking the
following remedial measures:

| | 1. | We have implemented new procedures relating to the communication
of information between management and all levels of the Company, including our
internal and external accountants, to ensure proper reporting and disclosure.
These steps include regular meetings of a committee of senior management, known
as the Office of the President, together with a member of the Audit Committee,
to discuss important topics such as new business, financing, accounting and
personnel matters, and the formation of a Disclosure Committee to ensure that
information required to be disclosed pursuant to SEC rules is made known to the
appropriate individuals at the Company.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2. | Our former general counsel, Arthur Burns has rejoined us as full
time Executive Vice President and General Counsel residing in our New York
office. Mr. Burns is a member of our Board of Directors.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3. | We have selected an experienced financial and leasing executive,
James Walsh, a former financial executive at GE Capital Corporation and General
Electric Company, to become our Chief Financial Officer in early 2004, following
the filing of our 2002 Form 10-K and our Form 10-Q's for 2003. In the interim,
Mr. Walsh has been appointed Executive Vice President - Finance.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 4. | We have hired and will continue to hire additional experienced
personnel in the accounting department and are planning additional training for
our accounting staff. These actions will also be focused on improving our
knowledge of and accounting for income taxes.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 5. | We have added staff in several other areas, including insurance,
accounts receivable, customer service and the legal department.
| | -- | --------------------------------------------------------------------------------------------------------------------------------

| | 6. | We have engaged J.H. Cohn, an independent accounting and
consulting firm, as our internal auditors, and have been working closely with
them to identify and correct weaknesses in our internal controls and procedures
and to develop an accounting policies and procedures manual.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 7. | We are improving the quality of our file maintenance and record
retention for completed transactions.
| | -- | -----------------------------------------------------------------------------------------------------

| | 8. | We are in the process of purchasing an upgrade to our lease
accounting system for recording and tracking finance lease transactions, which
we expect to have in place during the first quarter of 2004. Currently, we are
negotiating a contract for a disaster recovery hotsite. This will be followed
by the development of a formal disaster recovery plan. We are committed to
upgrading and enhancing other aspects of our information systems, including
excryption procedures and other security measures, as required.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 9. | Our Board of Directors has adopted a comprehensive set of
corporate governance documentation, including a revised Board of Directors
Charter, a revised Audit Committee Charter, a Code of Business Conduct and
Ethics, a Whistleblower and Nonretaliation Policy, and a Disclosure Committee
Charter.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 10. | We will be assigning a member of our accounting department having
knowledge of the relevant disclosure standards the responsibility for monitoring
transactions on an ongoing basis to identify any related party transactions. We
will also be designating an employee to communicate monthly with related
parties.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 11. | We will be implementing a procedure to review intercompany
accounts on a regular basis to identify appropriate intercompany
eliminations.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------

Finally, as noted above, two of our executive officers, Raoul
Witteveen, former President and Chief Operating Officer, and Mitchell Gordon,
former Executive Vice President and Chief Financial Officer, separately resigned
as officers and as members of the Board of Directors of the Company and its
affiliates.

The report of the Audit Committee investigation found that our
Chairman and Chief Executive Officer, Mr. Tuchman, did not personally engage in
any acts of misconduct or impropriety and recommended no disciplinary action
with respect to Mr. Tuchman. The report noted that Mr. Tuchman, as our Chief
Executive Officer, bears ultimate responsibility for the adequacy of our
internal controls. The report also stated that Mr. Tuchman has helped to bring
about new more rigorous controls to address the problems found by the report.
Mr. Tuchman has elected to voluntarily return to the Company the entire bonus he
received for 2002, in light of the findings regarding the conduct of other
executive officers who reported to Mr. Tuchman and the findings regarding the
inadequacy of our internal controls. Mr. Tuchman advised our Board of Directors
that he took this action to demonstrate his commitment to observing and
maintaining the highest standards of corporate governance and ethics at
Interpool. Accordingly, in January 2004, Mr. Tuchman voluntarily relinquished
his entire 2002 bonus.

Management has discussed its action plan with the Audit
Committee and will continue to provide periodic updates on progress made. As of
the date of this filing, we are satisfied that actions implemented to date and
those in progress will correct the material weaknesses in our internal controls
and information systems and that our processes and systems of internal controls
will be adequate. We note that, like other companies, management cannot provide
absolute assurance that internal control weaknesses will not be identified from
time to time in the future or that any such weaknesses would not materially
affect our financial results.

We believe that these efforts have addressed the material
weaknesses and significant deficiencies that have affected our internal controls
for the years ended 2002, 2001 and 2000. We can give no assurances, however,
that all material weaknesses and significant deficiencies have been entirely
corrected. We continue to look for methods to improve our overall system of
control.

We carried out an evaluation, under the supervision and with the
participation of our management, including our Chief Executive Officer and
Acting Chief Financial Officer, of the effectiveness of the design and operation
of our disclosure controls and procedures as of December 31, 2002 pursuant to
SEC Rules 13a-15 and 15d-15 under the Exchange Act. Our management, including
our Chief Executive Officer and Acting Chief Financial Officer, has concluded
that, except for the internal control deficiencies as described herein and
taking into account the efforts to address those deficiencies described herein,
as of the evaluation date, our disclosure controls and procedures are designed,
and are effective, to give reasonable assurance that information we must
disclose in reports filed with the SEC is properly recorded, processed, and
summarized, and then reported within the time periods specified in the rules and
forms of the SEC.

Other than the internal control issues and corresponding
corrective actions discussed above, our Chief Executive Officer and Acting Chief
Financial Officer have each confirmed that, since the date of the evaluation to
the date of the filing of this Annual Report on Form 10-K, there have been no
significant changes in the disclosure controls and procedures or in other
factors that could significantly affect such controls or procedures, including
any corrective actions with regard to significant deficiencies and material
weaknesses.

Our management, including our Chief Executive Officer and Acting
Chief Financial Officer, do not expect that our disclosure controls and
procedures or internal controls will prevent all errors and all improper
conduct. A control system, no matter how well conceived and operated, can
provide only reasonable, not absolute, assurance that the objectives of the
control system are met. Further, the design of a control system must reflect the
fact that there are resource constraints, and the benefits of controls must be
considered relative to their costs. Because of the inherent limitations in all
control systems, no evaluation of controls can provide absolute assurance that
all control issues and instances of improper conduct, if any, within a company
have been detected. The design of any system of controls also is based in part
upon certain assumptions about the likelihood of future events, and there can be
no assurance that any design will succeed in achieving its stated goals under
all potential future conditions. Over time, controls may become inadequate
because of changes in conditions, or the degree of compliance with the policies
or procedures may deteriorate.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT

Our current directors and
executive officers are as follows:

`NAME                             AGE         POSITION
Martin Tuchman (a)(c)            63          Chairman of the Board of Directors,  Chief Executive  Officer,  President
                                             and Chief Operating Officer
Arthur L. Burns                  58          General Counsel, Executive Vice President and Director
Richard W. Gross                 58          Executive Vice President and acting Chief Financial Officer
James F. Walsh                   54          Executive Vice President-Finance
Brian Tracey                     54          Senior Vice President and Chief Accounting Officer
William Geoghan                  53          Senior Vice President
Herbert Mertz                    50          Executive Vice President Chief Administrative  Officer,  Chief
                                             Operating Officer of Trac Lease and Interpool Limited
Christopher N. Fermanis          54          Senior Vice President-Law, General Counsel Interpool
                                             Limited and Trac Lease
Ernst Baenziger                  69          Senior Vice President and Director of Interpool Limited
Peter D. Halstead (a)(b)(c)      61          Director
Clifton H.W. Maloney (b)         66          Director
Warren L. Serenbetz (a)          79          Director
Joseph J. Whalen (a)(b)          71          Director

__________

(a) member of Compensation Committee in 2002 and 2003
(b) member of Audit Committee in 2002 and 2003
(c) member of Stock Option Committee in 2002 and 2003`

Martin Tuchman has served as our Chairman of the Board of
Directors and Chief Executive Officer of Interpool, Inc. since February 1988 and
as President and Chief Operating Officer since October 2003. He is also Chairman
of the Board of Directors, Chief Executive Officer and a director of Interpool
Limited, which he co-founded in 1968. He also has served as a director of Trac
Lease since June 1987, President of Trac Lease from June 1987 through January
1994 and currently serves as its Chairman and Chief Executive Officer. Mr.
Tuchman is Chairman of the Board of Directors of Princeton International
Properties, Inc., a family-owned real estate company, which owns and has
interests in properties located in Princeton, New Jersey. Mr. Tuchman was
previously a member of the Society of Automotive Engineers as well as the
American National Standards Institute. Currently, Mr. Tuchman is a member of the
United Nations Business Council, comprised of leading international executives
organized to promote understanding and cooperation between business and
government. He was formerly a member of the Board of Trustees of the New Jersey
Institute of Technology and currently, a member of the NJIT Board of Overseers.
He is also a member of the Board of Directors of Stevens Institute of
Technology's Web Campus. In 1995, Mr. Tuchman was honored as Entrepreneur Of The
Year in an awards program sponsored by Ernst & Young LLP and in 1996 was
named Alumnus of the Year by the New Jersey Institute of Technology. Mr. Tuchman
is a member of the Board of Trustees of The Parkinson's Alliance and serves on
the Board of Directors of the Parkinson's Disease Foundation of Columbia
Presbyterian Hospital in New York. As Chairman of The Tuchman Foundation, he
works closely with all Parkinsons organizations whose scientists select grants
seeking National Institute of Health's (NIH) approval. In 2000, Mr. Tuchman was
honored by The Smithsonian Institution for his extensive case study of Interpool
for the 2000 Computerworld Smithsonian Collection and Interpool was nominated
for the World Smithsonian Award. Interpool's material is now part of the
Permanent Research Collection on Information Technology at The Smithsonian's
National Museum of American History. Mr. Tuchman is a member of the Yardville
National Bancorp's Board of Directors and serves on its Executive Committee. In
addition, Mr. Tuchman is Treasurer and serves on the Board of Trustees and the
Finance Committee of TASK, the Trenton Area Soup Kitchen. Mr. Tuchman holds a
bachelor's degree in mechanical engineering from the New Jersey Institute of
Technology (Newark College of Engineering) and a master's degree in business
administration from Seton Hall University.

Arthur L. Burns has served as a director since January
1990. He was our General Counsel and Secretary from January 1990 until 1996 and
continued to serve as non-employee General Counsel until February 2003. Mr.
Burns rejoined the Company as General Counsel and Executive Vice President in
October 2003. Mr. Burns was Senior Vice President of Law and Administration of
Interpool Limited from 1980 until June 1996. Prior to joining Interpool Limited,
Mr. Burns served as Assistant General Counsel to GATX Leasing Corp. between 1975
and 1980, and as an associate attorney at the law firm of Cahill, Gordon &
Reindel from 1969 to 1975. Mr. Burns holds a bachelor's degree in economics from
Holy Cross College and a law degree from Fordham University School of Law.

Herbert Mertz served as our Director of Information
Systems from December 1988 to September 2000. In September 2000, he was
appointed Executive Vice President and Chief Administrative Officer, and Chief
Operating Officer of Interpool Limited, also serving as Chief Operating Officer
of Trac Lease. Prior to joining us, Mr. Mertz was an independent consultant in
the computer industry. From 1980 to 1983, Mr. Mertz was President of Princeton
Energy Partners, an international franchise company in the field of energy
conservation. Mr. Mertz holds a bachelor's degree in engineering from Princeton
University. He is an associate member of Sigma Xi, the North American Research
Society.

Richard W. Grosshas been our Acting Chief Financial
Officer since July 2003 and was appointed Executive Vice President in December
2003. Mr. Gross rejoined us in 2002 as Senior Vice President of Finance after
most recently serving as Vice President of Finance and Chief Financial Officer
of Balboa Capital Corporation from 1998 - 2002. Previously Mr. Gross had been
with us for more than twenty years in various senior finance positions, having
responsibility for investor and lender relations. Prior to first joining
Interpool in 1972, Mr. Gross spent five years with Arthur Andersen in their New
York office. Mr. Gross is a certified public accountant and received a Bachelor
of Science degree in Accounting from Long Island University.

James F. Walshwas appointed to serve as our Executive
Vice President, Finance in December 2003 and will become our Chief Financial
Officer effective on or before April 1, 2004. In 1998 Mr. Walsh joined C-S
Aviation Services, an aircraft operating lease company, as Senior Vice President
and Chief Financial Officer and also served as President from 2000 to 2003. From
1987 to 1993 Mr. Walsh served as Senior Vice President and Chief Financial
Officer of Polaris Aircraft Leasing Corporation, a GE Capital company, and,
following the incorporation of Polaris into GE Capital Aviation Services (GECAS)
in 1993, Mr. Walsh was named Senior Vice President and Chief Financial Officer
of GECAS. Prior to joining Polaris, Mr. Walsh held various financial positions
during sixteen years with GE Capital and General Electric Company. Mr. Walsh
holds a Bachelor of Arts degree in economics from Rutgers College and an MBA
degree from the University of Bridgeport.

William Geoghan has served as Senior Vice President of
each of Interpool, Interpool Limited and Trac Lease since 1998. Previously, Mr.
Geoghan served as Controller of Interpool from 1992 to 1998 and Vice President
and Controller of Interpool Limited from 1989 to 1998. Mr. Geoghan joined
Interpool Limited in 1981 and served as Assistant Controller for Interpool
Limited from 1985 to 1989. Mr. Geoghan is a Certified Public Accountant and
holds a bachelor's degree in commerce from Rider University.

Ernst Baenziger has served as an employee of Interpool
since 1977, serving as Senior Vice President and as a Director of Interpool
Limited since 1991. Mr. Baenziger is responsible for operations in Europe, Far
East, Australia and New Zealand. He also serves as Managing Director of
Interpool Limited's Basel, Switzerland branch, handling sales and operations,
and as Managing Director of CTC Equipment A.G. Mr. Baenziger holds a bachelor's
degree in economics and business administration from Handelshochschule, St.
Gallen. Mr. Baenziger has informed us that he will be retiring effective March
31, 2004.

Brian Tracey has served as Senior Vice President of
Interpool, Inc. since October, 2000 and was appointed Chief Accounting Officer
during 2003. Mr. Tracey joined Interpool when Interpool acquired the assets of
the North America Intermodal Division of Transamerica Leasing, Inc. Prior to
joining Interpool, Mr. Tracey was Senior Vice President of Finance and Business
Development at Transamerica where he had held numerous financial positions after
joining Transamerica in 1982. From 1970 to 1982, Mr. Tracey worked in the audit
practice of Arthur Andersen & Co. Mr. Tracey is a Certified Public
Accountant and holds an undergraduate degree from Pace College.

Christopher N. Fermanis has been with the Company since
1981. He holds the positions of Senior Vice President  Law of Interpool,
Inc. and General Counsel of Interpool Limited and Trac Lease, Inc. Mr. Fermanis
served as General Counsel of the Company between February and October 2003.
Prior to joining Interpool, Mr. Fermanis was an associate attorney for six years
with the New York law firm of Haight, Gardner, Poor & Havens (now Holland
& Knight). He holds a bachelor's degree from Princeton University and a law
degree from the University of Michigan Law School.

Peter D. Halstead has served as a member of our Board of
Directors since June 1994. Mr. Halstead is a retired Executive Vice President of
Summit Bancorp where he worked in various capacities since 1971. He is now the
Principal of P.D. Halstead Associates LLC, a firm consulting in corporate
administration and finance. Mr. Halstead serves as a Trustee for numerous
associations including McCarter Theatre and as Treasurer of the National Kidney
Foundation of the Delaware Valley. Mr. Halstead holds a bachelor's degree from
Colgate University and a master's degree in business administration from
Fairleigh Dickinson University.

Clifton H. W. Maloney has served as a member of our Board
of Directors since February 2000. He has been President of C.H.W. Maloney & Co.,
Incorporated, a private investment firm, since 1981. He was a Vice President in
investment banking at Goldman, Sachs & Co. from 1974 to 1981. Mr. Maloney is a
Director of Chromium Industries, Inc., and The Wall Street Fund. Mr. Maloney
holds a bachelor's degree in Engineering from Princeton University and a
master's degree in business administration from Harvard Business
School.

Warren L. Serenbetzhas served as a member of our Board
of Directors since February 1988 and served as Executive Consultant from
February 1988 through January 1995. He has also been a Director of Trac Lease
since its founding in November 1986. After co-founding Interpool Limited in
1968, Mr. Serenbetz served as Interpool Limited's President and Chief Executive
Officer and as a Director until 1975, after which he was Director, Chairman of
the Executive Committee and Chief Executive Officer until his retirement in
1986. Mr. Serenbetz rejoined the Board of Directors of Interpool Limited in
1988. Mr. Serenbetz is currently President of Radcliff Group, Inc. He has been
active in industry affairs, serving as an officer, director and member of
various world trade and shipping associations. Mr. Serenbetz holds a bachelor's
degree in engineering from Columbia University and a master's degree in
industrial engineering from Columbia University.

Joseph J. Whalen has served as a member of our Board of
Directors since April 1996. He originally joined the accounting firm of Arthur
Andersen LLP in 1957 and served as an audit partner in Andersen's New York and
New Jersey offices for more than ten years prior to his retirement in 1994. Mr.
Whalen is a member of the American Institute of Certified Public Accountants and
the New Jersey State Society of Certified Public Accountants. Mr. Whalen also
serves on the Board of Directors of Griffon Corporation. Mr. Whalen is a
Certified Public Accountant in New Jersey and holds a bachelor's degree from St.
Peter's College.

Board Compensation

In 2002, each member of the Board of Directors who is not an
officer or executive consultant currently received an annual service fee of
$10,000 for serving on the Board plus $1,000 and reimbursement of expenses for
each Board of Directors' or committee meeting attended. As of January 1, 2003,
each member of the Board of Directors who is not an officer or executive
consultant receives an annual service fee of $25,000 for serving on the Board
plus $2,000 and reimbursement of expenses for each Board of Directors' meeting
attended and $1,000 for each committee meeting attended. The chairman of each
committee will receive an additional $500 for each attended committee meeting.
Additional compensation may be paid for participation in teleconferences and
attendance at other meetings.

Board Committees

Effective January 1, 2004, the Board of Directors will have
three standing committees: an Audit Committee, a Compensation Committee and a
Corporate Governance Committee. The Audit Committee's function is to monitor the
integrity of the Company's financial statements and our financial reporting and
disclosure practices. The Audit Committee also reviews management's systems of
internal control relating to finance and accounting and the application of
generally accepted accounting principles. In addition, the Audit Committee
reviews the scope of the services of our independent auditors and may recommend
the independent auditors for appointment by the Board of Directors subject to
stockholder approval. Messrs. Halstead (Chairman), Maloney and Whalen will
continue to serve on the Audit Committee.

The Compensation Committee's functions are to review our general
compensation strategy, establish salaries, review benefit programs, approve
certain employment contracts and administer our stock option plans. The members
of the compensation committee for 2004 are Messrs. Whalen (Chairman), Halstead
and Maloney.

In addition, our Board of Directors has created a Corporate
Governance Committee. The Corporate Governance Committee is responsible for the
selection, qualification and compensation of Board members and candidates. This
committee also acts as a nominating committee for Board membership and oversees
corporate governance matters. The members of the Corporate Governance Committee
for 2004 are Messrs. Maloney (Chairman), Halstead, Whalen and Burns.

Our Board of Directors may establish other committees from time
to time to facilitate the management of our business and affairs.

ITEM 11. EXECUTIVE COMPENSATION

The following table sets
forth information for the calendar years ended December 31, 2002, 2001 and 2000
concerning the annual compensation earned by our chief executive officer and our
four other most highly compensated executive officers during 2002:

`Annual Compensation                              Long Term
                                                  -------------------            Other           Compensation
   Name and Principal Position       Year         Salary          Bonus        Compensation    # of Stock Options
   ---------------------------       ----         ------          -----        ------------    ------------------
Martin Tuchman                       2002        $855,170       $843,381         $31,005 (1)          0
Chairman of the Board of             2001         814,447        651,784          62,742 (1)          0
Directors and Chief Executive        2000         775,664      1,221,100          28,990 (1)          0
Officer

Raoul J. Witteveen*                  2002         602,691        843,381          18,998 (1)          0
President, Chief Operating           2001         573,991        651,784          22,542 (1)          0
Officer and Director                 2000         546,658      1,002,650          50,381 (1)          0

Ernst Baenziger                      2002         179,508              0       1,864,288 (2)          0
Sr. Vice President, Interpool        2001         183,901              0         776,045 (2)          0
Limited                              2000         190,074              0       1,306,278 (2)          0

Mitchell I. Gordon**                 2002         250,000              0               0            50,000
Executive Vice President,            2001         240,000              0               0              0
Chief Financial Officer              2000          39,692 (3) 1,650,000(5)       200,000 (4)        50,000

Herbert Mertz                        2002         250,000         50,000               0              0
Chief Administrative Officer,        2001         240,000        150,000           7,046              0
Chief Operating Officer, Trac        2000          74,042 (3)    115,000         243,135 (4)        50,000
Lease, Inc. & Interpool Limited


* Mr. Witteveen resigned as an officer and Director effective October 9, 2003.

** Mr. Gordon resigned as an officer effective July 17, 2003 and as a Director effective October 9, 2003.

(1)    Amounts listed include payments made to or on behalf of the executive for certain company  provided  automobile and
       related expenses and medical expense reimbursement as provided for in the executive's employment agreement.

(2)    Amounts listed as "Other Compensation" include sales commissions.

(3)    Mr. Gordon and Mr. Mertz became employees in October 2000.

(4)    Amounts listed as "Other  Compensation"  include consulting fees paid prior to the individual becoming an executive
       officer of Interpool.

(5)    This bonus was earned by Mr.  Gordon in  connection  with the  acquisition  of  Transamerica  Leasing,  Inc.  North
       American  Intermodal  Division and was to be paid in three installments of $550,000 each. Two of the three payments
       were paid in 2001 with a third and final payment paid in 2003.`

For 2002, Mr. Tuchman was awarded a bonus of $843,381, of which
$100,000 was paid in cash. The balance of the bonus was in the form of a stock
award under our Deferred Bonus Plan. Pursuant to the terms of the Plan, this
stock award consisted of a total of 60,407 shares of common stock, which were to
vest over a ten-year period, commencing January 2, 2004. As discussed above, the
report of the investigation conducted by special counsel to our Audit Committee
found that Mr. Tuchman did not personally engage in any acts of misconduct or
impropriety. The report noted that Mr. Tuchman, as our Chief Executive Officer,
bears ultimate responsibility for the adequacy of our internal controls. The
report also stated that Mr. Tuchman has helped to bring about new more rigorous
internal controls. Mr. Tuchman has elected to voluntarily return to the Company
the entire bonus he received for 2002, in light of the findings regarding the
conduct of other executive officers who reported to Mr. Tuchman and the findings
regarding the inadequacy of our internal controls. Mr. Tuchman advised our Board
of Directors that he took this action to demonstrate his commitment to observing
and maintaining the highest standards of corporate governance and ethics at
Interpool.

Stock Option Activity During Fiscal Year 2002

On September 5, 2002, 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 Mitchell I. Gordon, the Company's then
current Chief Financial Officer and Executive Vice President. The newly issued
options were granted with an exercise price equal to the closing market price of
the Company's stock as of the grant date. As granted, the options were to have
vested 20% per year beginning January 1, 2003 subject to expiry ten years from
the grant date. In accordance with the terms of Mr. Gordon's Separation
Agreement, each outstanding stock option became fully vested and immediately
exercisable subject only to expiration dates of October 9, 2010 as to the 50,000
granted on October 10, 2000 and September 4, 2012 as to the 50,000 granted on
September 5, 2002.

1993 Stock Option Plan

Our 1993 Stock Option Plan for Executive Officers and Directors
was adopted by our 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 Interpool or a subsidiary
(including any executive consultant of Interpool and its subsidiaries), whether
or not they are employees. As of December 31, 2002, 4,494,001 options were
issued and outstanding, of which 4,344,001 are exercisable. Options under the
Stock Option Plan have been granted to 18 persons.

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

Options granted under the Stock Option Plan may be either
incentive stock options ("ISO's") within the meaning of Section 422 of the Code,
or non-qualified stock options ("NQSO's"), as the Stock Option Committee may
determine. No option intended to qualify as an ISO may be granted to any
individual who, at the time of grant, is not an employee of Interpool or a
subsidiary. The exercise price of an option will be fixed by the Stock Option
Committee on the date of grant, except that (1) the exercise price of an ISO
granted to any individual who owns (directly or by attribution) shares of common
stock possessing more than 10% of the total combined voting power of all our
classes of outstanding stock must be at least equal to 110% of the fair market
value of the common stock on the date of grant and (2) the exercise price of an
ISO granted to any individual other than a 10% owner must be at least equal to
the fair market value of the common stock on the date of the grant. Any options
granted must expire within ten years from the date of grant (five years in the
case of an ISO granted to a 10% owner). Shares subject to options granted under
the Stock Option Plan which expire, terminate or are canceled without having
been exercised in full become available again for option grants. No options
shall be granted under the Stock Option Plan more than ten years after the
adoption of the Stock Option Plan.

Options are exercisable by the holder subject to terms fixed by
the Stock Option Committee. No option can be exercised until at least six months
after the date of grant. However, an option will be exercisable immediately upon
the occurrence of any of the following (but in no event during the six-month
period following the date of grant or subsequent to the expiration of the term
of an option):

|(1) | the holder's retirement on or after attainment of age 65;
|--- | ---------------------------------------------------------

|(2) | the holder's disability or death; or
|--- | ------------------------------------

|(3) | special circumstances or events as the Stock Option Committee
determines merits special consideration.
|--- | ------------------------------------------------------------------------------------------------------

Under the Stock Option Plan, a holder may pay the exercise price
in cash, by check, by delivery to us of shares of common stock already owned by
the holder, or, with respect to NQSO's and subject to approval by the Stock
Option Committee, in shares issuable in connection with the option, or by such
other method as the Stock Option Committee may permit from time to time.

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

The Stock Option Plan may be terminated and may be modified or
amended by the Stock Option Committee or the Board of Directors at any time;
provided, however, that (1) no modification or amendment increasing the
aggregate number of shares which may be issued under options, increasing
materially the benefits accruing to participants under the Stock Option Plan, or
materially modifying the requirements as to eligibility to receive options will
be effective without stockholder approval within one year of the adoption of the
amendment and (2) no such termination, modification or amendment of the Stock
Option Plan will alter or affect the terms of any then outstanding options
without the consent of the holders thereof. The Stock Option Committee may
cancel or terminate an outstanding option with the consent of the holder and
grant an option for the same number of shares to the individual based on the
then fair market value of the common stock, which may be higher or lower than
the exercise price of the canceled option.

During June and July 2003, former director and consultant John
M. Bucher exercised 22,500 options to purchase common stock at an exercise price
of $15.58 per share. The options were originally issued in 1997 under our 1993
Stock Option Plan for Executive Officers and Directors.

Directors Plan

Our Non-Qualified Stock Option Plan for Non-Employee,
Non-Consultant Directors was adopted by our Board of Directors and approved by
the stockholders in March 1993. The Directors' Plan provides for the automatic
grant of 15,000 non-qualified options to non-employee, non-consultant directors
at the time the director first joins the Board. 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 our common stock on the
date the person becomes a director. The options granted pursuant to the
Directors' Plan may be exercised at the rate of one-third of the shares on the
first anniversary of the options' grant date, one-third of the shares on the
second anniversary of the options' grant date and one-third of the shares on the
third anniversary of the options' grant date, subject to applicable 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
except that in the event of the death of a director, the option must be
exercised within six months of the date of death or, in the event of resignation
of a director, the option must be exercised within ten days of the date of
resignation. The Directors' Plan is administered by the Stock Option Committee
of the Board of Directors. Pursuant to the Directors' Plan, an option to
purchase 15,000 shares of common stock was granted to each of Peter D. Halstead
in June 1994, Joseph J. Whalen in April 1996 and Clifton H.W. Maloney in
February 2000. In addition, our directors may be granted options under the 1993
Stock Option Plan for Executive Officers and Directors as adopted by the Board
of Directors and approved by the stockholders in March 1993. On September 16,
1998, pursuant to an option repricing program, 15,000 options held by each of
Messrs. Halstead and Whalen were cancelled and replaced with newly issued
options with an exercise price equal to the closing market price on September
16, 1998, the grant date, which vested six months from the grant date and expire
ten years from the grant date. All other terms and conditions of the newly
issued options are the same as those of the cancelled options.

401(k) Plan

We have adopted a deferred savings plan which is intended to
qualify under Section 401(k) of the Code. All our employees are eligible to
participate in the 401(k) Plan. Each participant may elect to defer the receipt
of up to 15% (changed to 60% effective July, 2003) of such participant's
compensation on a pre-tax basis and have us contribute the deferred compensation
to the 401(k) Plan on the participant's behalf, up to the annual statutory
limitation in effect at the time of the contribution. Such salary deferral
contributions are 100% vested at all times. Amounts credited to a participant's
account are distributed to the participant at the earliest of (1) the
termination of his or her employment with us, (2) a requested withdrawal after
age 59 1/2 or upon evidence of disability or (3) a requested withdrawal due to
financial hardship. The 401(k) Plan administrator may authorize loans from the
401(k) Plan to participants in a manner which is uniform and nondiscriminatory.
Under the Code, salary deferral contributions are not taxable to the employee
until the amounts are distributed to the employee, and all contributions are tax
deductible to us. The 401(k) Plan provides for the making by us of any matching
or profit sharing contributions to the 401(k) Plan, in the form of shares of
common stock of Interpool.

Compensation Committee Interlocks and Insider
Participation

During fiscal year 2002, Mr. Tuchman participated in
deliberations of our Board of Directors concerning executive officer
compensation. Mr. Tuchman did not participate in discussions regarding his own
compensation.

Employment Agreements With Named Executive
Officers

We have an employment agreement with Martin Tuchman which
currently expires on December 31, 2011, except that on each January 1, the
expiration date is automatically extended for an additional year unless we or
Mr. Tuchman give written notice of an election not to extend beyond the end of
the then current seven-year term. Notice of any election not to extend the
expiration date must be delivered not less than six months prior to the next
occurring January 1.

As compensation for the services to be rendered under his
employment agreement, Mr. Tuchman is currently paid an annual base salary of
$942,825. The base salary under the employment agreement increases by a minimum
of 5% each year. In addition, Mr. Tuchman is entitled to receive an annual bonus
equal to 2% of the amount of any increase in our net income during the year from
its net income during the preceding year. Mr. Tuchman may be entitled to receive
discretionary additional bonuses as determined by our Compensation Committee.
The employment agreement (1) includes a non-competition provision; (2) provides
that, in the event of the employee's death, the employee's base salary will
continue to be paid to his beneficiary for two additional years and, in the
event of termination of the employee without cause, the employee will continue
to receive his base salary for the entire remaining term then in effect under
the employment agreement; and (3) provides for reimbursement to the employee,
for both the employee and his spouse, of all health related costs and expenses
that are not advanced or reimbursed to the employee pursuant to our medical and
dental insurance plans, which additional reimbursement continues for a period of
five years after expiration of the employment agreement. Mr. Tuchman may also be
entitled to receive incentive bonuses as determined by our Compensation
Committee.

In addition to the compensation (including bonuses) provided for
under his employment agreement, Mr. Tuchman also receives bonuses under a bonus
plan the Compensation Committee of our Board of Directors adopted effective
January 1, 2000, with three measures of incentive bonus performance: (1)
increase in stock price; (2) increase in net income; and (3) maintaining an
investment grade debt rating. Based upon the plan as adopted, Mr. Tuchman
received additional bonuses for 2000, 2001 and 2002, in amounts of $1,221,100,
$651,784 and $843,381, respectively. As discussed above, Mr. Tuchman elected to
voluntarily relinquish his entire 2002 bonus. This voluntary decision was made
by Mr. Tuchman in light of the findings of the Audit Committee investigation
regarding the conduct of other executive officers who reported to Mr. Tuchman,
as described above under "Controls and Procedures."

Increase in Net Income: To the extent that our net income
exceeds that of the highest previous year, a bonus equal to 10% of the increase
is to be paid to our Chief Executive Officer. Under this bonus measure, Mr.
Tuchman received a bonus of $684,200, representing 10% of the increase in
Interpool's 2000 net income over Interpool's 1998 net income (1998 having been
the previous "high water mark" of net income). No bonus was paid to Mr. Tuchman
in respect to this performance measure for 2001 or 2002.

Investment Grade Rating: Our Chief Operating Officer is
entitled to a bonus of $100,000 for each year in which we maintain an investment
grade debt rating by either Moody's or Standard and Poor's at year-end. Under
this measure, Mr. Tuchman received bonuses of $100,000 for each of 2000, 2001
and 2002.

Increased Stock Price: To the extent our average stock
price for a year exceeds the highest average stock price for any prior year, our
Chief Executive Officer will receive a bonus in the amount of 1.5% of the
increase in the average aggregate market value of our common stock. Because our
2001 average stock price exceeded the previous "high water mark," a bonus in the
amount of $551,784 was awarded to Mr. Tuchman for 2001 under this performance
measure. Because our 2002 average stock price exceeded the 2001 average stock
price, a bonus in the amount of $743,381 was awarded to Mr. Tuchman for 2002
under this performance measure.

We have also entered into an employment agreement with Herbert
Mertz, the Chief Administrative Officer of the Company and Chief Operating
Officer of Trac Lease and Interpool Limited. Under the terms of the Mr. Mertz's
Employment Agreement, Mr. Mertz is paid an annual base salary of $275,000 and
may be entitled to receive a discretionary bonus as determined by the
Compensation Committee. Mr. Mertz's employment agreement (i) includes a
non-competition provision; (ii) provides that, in the event of the employee's
death, the employee's base salary will continue to be paid to his beneficiary
for the remainder of the term and, (iii) provides for participation in all
Interpool medical and dental insurance plans.

We expect to enter into agreements with certain other executive
officers in 2004.

Employment Contracts with Former Executives

We entered into an employment agreement with Raoul J. Witteveen,
our former President and Chief Operating Officer dated as of January 1, 1992, as
amended and restated. As of January 1, 2003, the new expiration date of Mr.
Witteveen's Employment Agreement was extended to December 31, 2010. Under the
terms of his employment agreement, on each January 1, the expiration date of the
employment agreement was automatically extended for an additional year unless we
or the employee party to such employment agreement gave written notice of an
election not to extend beyond the end of the then current seven-year term.
Notice of any such election not to extend the expiration date was required to be
delivered not less than six months prior to the next occurring January 1. Mr.
Witteveen's Employment Agreement was terminated on October 9, 2003.

As compensation for the services rendered under the employment
agreement, for 2003 Mr. Witteveen was paid an annual base salary of $632,835
which would be increased by a minimum of 5% each year the agreement remained in
effect. In addition, Mr. Witteveen was entitled to receive an annual bonus equal
to 1% of the amount of any increase in our net income during the year from its
net income in the preceding year. Mr. Witteveen was entitled to receive
discretionary additional bonuses as determined by our Compensation Committee.
His employment agreement (i) included a non-competition provision; (ii) provided
that, in the event of the his death, Mr. Witteveen's base salary would continue
to be paid to his beneficiary for two additional years and, in the event of
termination of Mr. Witteveen without cause, he would continue to receive his
base salary for the entire remaining term then in effect under the employment
agreement; and (iii) provided for reimbursement to Mr. Witteveen, for both Mr.
Witteveen and his spouse, of all health related costs and expenses that were not
advanced or reimbursed to him pursuant to our medical and dental insurance
plans, which additional reimbursement continues for a period of five years after
expiration of the employment agreement.

In addition to the compensation (including bonuses) provided for
under his employment agreement, Mr. Witteveen also received bonuses under a
bonus plan the Compensation Committee of our Board of Directors adopted
effective January 1, 2000, with three measures of incentive bonus performance:
(1) increase in stock price; (2) increase in net income; and (3) maintaining an
investment grade debt rating. Based upon the plan as adopted, Mr. Witteveen
received additional bonuses for 2000, 2001 and 2002, as follows:

Increase in Net Income: To the extent that our net income
exceeds that of the highest previous year, a bonus equal to 10% of the increase
is to be paid to our Chief Operating Officer. Under this bonus measure, Mr.
Witteveen received a bonus of $684,200, representing 10% of the increase in
Interpool's 2000 net income over Interpool's 1998 net income (1998 having been
the previous "high water mark" of net income). No bonus was paid to Mr.
Witteveen in respect to this performance measure for 2001 or 2002.

Investment Grade Rating: Our President and Chief
Financial Officer is entitled to a bonus of $100,000 for each year in which we
maintain an investment grade debt rating by either Moody's or Standard and
Poor's at year-end. Under this measure, Mr. Witteveen received bonuses of
$100,000 for each of 2000, 2001 and 2002.

Increased Stock Price: To the extent our average stock
price for a year exceeds the highest average stock price for any prior year, Mr.
Witteveen was entitled to receive a bonus in the amount of 1.5% of the increase
in the average aggregate market value of our common stock. Because our 2001
average stock price exceeded the previous "high water mark," a bonus in the
amount of $551,784 was awarded to Mr. Witteveen for 2001 under this performance
measure. Because our 2002 average stock price exceeded the 2001 average stock
price, a bonus in the amount of $743,381 was awarded to Mr. Witteveen for 2002
under this performance measure.

In January 2002, we entered into an employment agreement with
Mitchell I. Gordon, our former Chief Financial Officer and Executive Vice
President. Under the terms of the Employment Agreement, Mr. Gordon was paid an
annual base salary of $250,000 and was entitled to receive performance based and
discretionary bonuses as determined by the Compensation Committee. The term of
the Employment Agreement was scheduled to expire on December 31, 2003 except
that on or before June 30, 2003, we were required to either notify Mr. Gordon of
our intention not to renew his Employment Agreement or provide the terms under
which we will offer a new agreement. The Employment Agreement (i) included a
non-competition provision; (ii) provided that, in the event of the employee's
death, the employee's base salary will continue to be paid to his beneficiary
for the remainder of the term and; (iii) provided for participation in all
Company medical and dental insurance plans. Mr. Gordon's Employment Agreement
was terminated on July 17, 2003 in connection with the separation agreement that
we entered into with Mr. Gordon.

Separation Agreements

On July 17, 2003, Mitchell I. Gordon, who had been our Executive
Vice President and Chief Financial Officer, resigned as an employee and officer
of the Company. Pursuant to his resignation, we entered into a separation
agreement under which Mr. Gordon received a payment of $200,000 (his accrued
bonus for 2003) and an additional payment of $800,000 and over the next four
years will receive other payments totaling an additional $3,200,000. In the
event of a change of control of the Company these payment obligations would
accelerate. In accordance with the terms of the separation agreement, Mr. Gordon
will continue to receive certain benefits over the next five years including
health, life, disability and accident insurance as well as a car allowance, at
the same cost to Mr. Gordon as if Mr. Gordon had continued to be an executive
officer of the Company. Mr. Gordon also is provided an office allowance. The
cost to us of these continued benefits to the former executive will amount to
approximately $107,000. The separation agreement provided for the immediate
vesting of Mr. Gordon's stock options. Under the separation agreement, Mr.
Gordon agreed to provide certain consulting services to us. In October 2003, Mr.
Gordon resigned from his positions as a director of the Company and its
affiliates. In connection with Mr. Gordon's separation agreement, Mr. Gordon's
prior employment agreement (which would have continued until December 31, 2003)
was terminated and each of the Company and Mr. Gordon relinquished certain rights
thereunder.

On October 9, 2003, Raoul Witteveen, who had served as our
President and Chief Operating Officer, resigned as an employee, officer and
director of the Company and its affiliates. At the time of his resignation, we
and Mr. Witteveen reached an understanding regarding the severance and other
principal terms that would be set forth in a separation agreement to be entered
into between us and Mr. Witteveen. Under the terms agreed upon, Mr. Witteveen
will receive an amount equal to his full 2003 annual base salary ($632,835) for
each year through October 9, 2005 as well as health, life, disability and
accident insurance and reimbursements through the same date. Mr. Witteveen will
also be provided with an office allowance, an allowance for an executive
assistant, and an automobile allowance, in each case through October 9, 2004. The
cost to us of these continued benefits to the former executive will amount to
approximately $211,000. It
was also agreed that Mr. Witteveen's outstanding stock options, all of which
were fully vested as of the date of his resignation, will be exercisable until
October 9, 2005, and that Mr. Witteveen's future sale of common stock will be
subject to certain volume restrictions and a right of first refusal on the part
of Interpool and its affiliates. As part of the separation agreement, Mr.
Witteveen will agree not to engage in a competing business, either directly or
indirectly, for a period of two years from his resignation date. In connection
with Mr. Witteveen's separation agreement, Mr. Witteveen's prior employment
agreement (which would have continued until 2010) is terminated and Mr.
Witteveen relinquishes his rights thereunder. A definitive separation agreement
incorporating these terms has been prepared but to date has not yet been
executed by us or by Mr. Witteveen.

Deferred Bonus Plan

In November 2002, our Board of Directors approved a Deferred
Bonus Plan under which employees of Interpool and our affiliates who receive
discretionary year-end bonuses of greater than $50,000 would receive such
bonuses partly in cash and partly in the form of an award of Interpool common
stock. Bonus stock awards under this plan would vest in equal installments over
a five-year period, unless the recipient elected to have the award vest over a
ten-year period or the Board of Directors specified another period. The unvested
portion of any bonus stock award will vest immediately if a change in control of
Interpool occurs, if the employee is terminated without cause, if the employee
resigns for a good reason, if the employee dies or becomes permanently disabled,
or in any other circumstance deemed appropriate by the Board of Directors. If a
recipient resigns voluntarily without a good reason or is terminated for cause,
the employee would forfeit any unvested portion of any bonus stock award. The
number of shares covered by any bonus stock award would be determined based upon
a 10% discount from the market price of Interpool common stock at year-end,
except that the discount will be 30% for any bonus stock awards that vest over
ten years. Under the Plan, each employee granted a bonus stock award will have
the right to require us to purchase from the employee a total number of shares
equal to the number covered by the bonus stock award.

On January 2, 2003, 139,067 shares were awarded to 12 employees,
4,641 of which vest over a five year period, 74,019 vest over a ten year period
and 60,407 have lapsed. Additional shares were awarded on January 2, 2004.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

The following table sets forth certain information with respect
to the beneficial ownership of the Company's common stock as of December 1, 2003
by certain beneficial owners, each of the Company's directors and executive
officers and all executive officers and directors as a group.

`Options
                                                                                    Exercisable
                                                                       Number of       Within       Percentage
Name of Beneficial Owner                                               Shares (1)(12) 60 Days      Of Class (1)
------------------------                                               -------------- -------      ------------
Officers and Directors:
Martin Tuchman (2)(3)............................................      9,519,110    2,280,000         31.86%
Arthur L. Burns  ................................................        210,408       96,563          *
Peter D. Halstead ...............................................         67,500       60,000          *
Clifton H. W. Maloney............................................         15,000       15,000          *
Warren L. Serenbetz (2)(4)(5)(6).................................      1,601,127      668,438          5.66%
Joseph J. Whalen.................................................         37,500       37,500          *
William A. Geoghan...............................................          9,300        7,500          *
Herbert Mertz....................................................          9,250        7,500          *
Richard W. Gross.................................................          2,000            0          *
Ernst Baenziger..................................................            250            0          *
Brian Tracey.....................................................              0            0          *
James F. Walsh...................................................              0            0          *
Christopher N. Fermanis..........................................              0            0          *
Executive officers and directors as a
group (thirteen persons) ........................................     11,471,445    3,172,501         37.28%
Other Stockholders:
Hickory Enterprises, L.P. (8)(9).................................      4,856,911            0         17.60%
165 Signal Hill North
Wilton, CT 06897
Raoul J. Witteveen (7)...........................................      4,712,429    1,140,000         16.40%
Surinamesttaat 37
2585 CH The Hague
The Netherlands
Warren L. Serenbetz, Jr.(6)(10)..................................        292,646            0          1.06%
165 Signal Hill North
Wilton, Connecticut 06897
Paul H. Serenbetz (6)(10)........................................        292,646            0          1.06%
12 Howard Avenue
New Haven, CT 06519
Stuart W. Serenbetz (6)(10)......................................        292,646            0          1.06%
Stonebridge Development Corp.
6 Hickory Drive
Stamford, CT 06902
Clay R. Serenbetz (6)(10)........................................        292,646            0          1.06%
6 Bay Road
New Market, NH 03857
The Chartres Limited Partnership (11)............................         90,000            0          *
c/o Interpool, Inc.
633 Third Avenue
New York, NY 10017
Other Stockholders as a group....................................     10,829,924    1,140,000         37.68%

*Less than 1%

     (1)  Includes shares subject to options which are exercisable within 60
          days. In the event that all said options were exercised, the total
          outstanding number of the shares of the Company's common stock would
          be 32,014,953. The percentage of class is calculated on the basis of
          an assumption that only the named individual exercised all of his
          options. Does not include the following options not exercisable within
          60 days: Herbert Mertz; 50,000 shares. Does not include shares awarded
          in connection with the Deferred Bonus Plan which were issued on
          January 2, 2003 with an initial vesting date of January 2, 2004.
     (2)  The business address of Mr. Tuchman is 211 College Road East,
          Princeton, New Jersey 08540 and the business address for Mr. Serenbetz
          is 695 West Street, Harrison, New York 10528.
     (3)  Includes 6,731,686 shares directly held by Mr. Tuchman; 202,422 shares
          held by an exchange fund as to which Mr. Tuchman retains certain
          voting rights; 8,668 shares held by a pension plan f/b/o Mr. Tuchman;
          96,619 shares held by a revocable grantor trust of which Mr. Tuchman
          is the grantor and trustee and Mr. Tuchman's brother is the
          beneficiary; 7,000 shares held by the Tuchman Foundation; 5,797 shares
          representing Mr. Tuchman's 51.3% interest in shares held by Kingstone
          Capital Group, LLC, a New Jersey limited liability company; 1,500
          shares held by a pension plan f/b/o Mr. Tuchman's wife; 182,381 shares
          held by Princeton International Properties, Inc., a New Jersey
          corporation owned by Mr. Tuchman and his wife; and 3,037 shares held
          by Mr. Tuchman's wife.
     (4)  Includes 182,381 shares held by the Radcliff Group, Inc.
     (5)  The Warren L. Serenbetz Revocable Trust, of which Warren L. Serenbetz
          is the trustee, is the record owner of these shares of the Company's
          common stock. The beneficiaries of the Warren L. Serenbetz Revocable
          Trust are members of the immediate family of Warren L. Serenbetz.
     (6)  Does not include Mr. Serenbetz's interest in shares held by Hickory
          described in footnote (8) below.
     (7)  Includes 3,467,730 shares directly held by Mr. Witteveen; 101,210
          shares held by an exchange fund as to which Mr. Witteveen retains
          certain voting rights; 1,500 shares of which Mr. Witteveen's wife is
          the record owner; and 1,989 shares representing Mr. Witteveen's
          interest in shares held by Kingstone Capital Group, LLC, a New Jersey
          limited liability company.
     (8)  In 1994, Hickory Enterprises, L.P., a Delaware limited partnership
          ("Hickory") was formed. Warren L. Serenbetz contributed shares of the
          Company's common stock in exchange for a limited partnership interest
          in Hickory. Each of Warren L. Serenbetz, Jr., Stuart W. Serenbetz,
          Paul H. Serenbetz and Clay R. Serenbetz contributed shares of the
          Company's common stock in exchange for a general partnership and
          limited partnership interest in Hickory. Each of the four general
          partners in Hickory has one vote in matters before Hickory. Warren L.
          Serenbetz, as solely a limited partner, does not have any voting
          rights or rights to participate in the management or operations of
          Hickory.
     (9)  Includes 319,422 shares held by exchange funds as to which Hickory
          Enterprises retains certain voting rights.
     (10) Each of Warren L. Serenbetz, Jr., Paul H. Serenbetz, Stuart W.
          Serenbetz and Clay R. Serenbetz is a son of Warren L. Serenbetz. None
          of Mr. Serenbetz's sons are minors.
     (11) On February 1, 1995, Arthur L. Burns entered into an Agreement of
          Limited Partnership pursuant to which Mr. Burns contributed 90,000
          shares of restricted common stock to The Chartres Limited Partnership
          ("Chartres"), in exchange for a 98% limited partnership interest in
          Chartres. Each of Meredith K. Burns and Kristin M. Reynolds, daughters
          of Arthur L. Burns, are the other limited partners and the general
          partners of Chartres. Limited partners do not have any voting rights
          or rights to participate in the management or operation of Chartres.
     (12) Does not include shares which could be issued upon conversion in
          connection with holdings of the Company's 9.25% Convertible Redeemable
          Subordinated Debentures with a conversion price of $25.00 per share.
          Conversion of the holdings of the Debentures would result in a share
          issuance as follows: Martin Tuchman 80,000 shares; Warren Serenbetz
          and related entities and family members 106,906 shares; Arthur Burns
          9,600 shares; Peter Halstead 1,000 shares; Joseph Whalen 8,000 shares;
          Clifton Maloney 2,000 shares; Richard Gross 8,000; and Herb Mertz
          2,400.`

Beneficial Ownership Reports

Section 16(a) of the Securities Exchange Act of 1934 requires
our executive officers and directors to file certain reports of ownership and
reports of changes of ownership of our equity securities with the Securities and
Exchange Commission. Executive officers and directors are required to furnish us
with copies of all Section 16(a) forms that they file. Based upon a review of
the copies of such forms received by us, or written representations from certain
reporting persons, we believe that, during 2002 Messrs. Tuchman, Witteveen,
Serenbetz, Halstead, Maloney and Whalen inadvertently failed to file Form 4 in
connection with purchases of our 9.25% Convertible Redeemable Subordinated
Debentures.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS

Expired Stockholders' Agreement

Martin Tuchman, Raoul J. Witteveen, Arthur L. Burns, Hickory
Enterprises L.P., Warren L. Serenbetz Revocable Trust, Warren L. Serenbetz, Jr.,
Stuart W. Serenbetz, Paul H. Serenbetz, Clay R. Serenbetz, and Chartres Limited
Partnership collectively own, directly or indirectly, approximately 70.2% of our
common stock and were parties to an Amended and Restated Stockholders' Agreement
dated May 3, 1993 which expired by its terms in May 2003. Under the Amended and
Restated Stockholders' Agreement, the parties agreed not to sell or transfer any
shares of common stock beneficially owned by them to any person without first
offering the shares under specific terms and conditions to the other parties to
the Stockholders' Agreement. Specifically, the shares were to have first been
offered at a per share price equal to the price offered by any third party
making a bona fide offer to buy the shares for cash, cash equivalents or
marketable securities (or if no such bona fide offer had been received, at a
price equal to the average closing price of a share of common stock on the New
York Stock Exchange over a period of twenty prior trading days) and if such
election to purchase the shares was not made the shares were then offered to the
other parties to the Stockholders' Agreement for purchase by them at the same
per share price described above. Notwithstanding the foregoing, the parties to
the Stockholders' Agreement were permitted to transfer shares of common stock to
one or more of certain members of their immediate families (or trusts for the
benefit of such family members) so long as each transferee agreed to be bound by
the terms of the Stockholders' Agreement. The Stockholders' Agreement further
provided that if Interpool (which is not a party to the Stockholders' Agreement)
elected to purchase any shares offered to it by a party to the Stockholders'
Agreement and the shares offered represented greater than 10% of the shares held
by the offeror, we had the right to pay the purchase price of the shares by
delivery of a promissory note, payable in equal monthly installments (with
interest at the prime rate) over the following year. Pursuant to the
Stockholders' Agreement, each of the parties thereto had agreed to vote for the
re-election of Messrs. Tuchman, Serenbetz, Witteveen and Burns as our directors.
The parties to the Stockholders' Agreement acknowledged shared voting power but
at all times disclaimed the existence of a group or beneficial ownership of
shares owned by other parties to the Stockholders' Agreement. The Stockholders'
Agreement expired on May 4, 2003 and has not been extended by the parties.

The Ivy Group Transactions

The Ivy Group, a New Jersey general partnership composed
directly or indirectly of Mr. Tuchman, Radcliff Group, Inc., Raoul J. Witteveen,
Thomas P. Birnie and Graham K. Owen, has previously leased chassis to Trac
Lease. As of December 31, 2000, pursuant to various equipment lease agreements,
Trac Lease leased 6,047 chassis from The Ivy Group and its principals for an
aggregate annual lease payment of approximately $2.9 million. On January 1,
2001, the various leases for the 6,047 units were combined into a single lease
pursuant to which The Ivy Group and its principals were paid an aggregate lease
payment of approximately $2.6 million through June 30, 2001.

Effective as of July 1, 2001, we restructured our relationship
with The Ivy Group and its principals to provide us with managerial control over
these 6,047 chassis. As a result of the restructuring, the partners of The Ivy
Group contributed these 6,047 chassis and certain other assets and liabilities
to our newly formed subsidiary, Chassis Holdings I LLC, in exchange for $26.0
million face value of preferred membership units and 10% of the common
membership units, and Trac Lease contributed 902 chassis and $2,000 in cash to
Chassis Holdings in exchange for $3.0 million face value of preferred membership
units and 90% of the common membership units. The preferred membership units are
entitled to receive a preferred return prior to the receipt of any distributions
by the holders of the common membership units. The value of the contributed
chassis was determined by taking the arithmetic average of the results of
independent appraisals performed by three nationally recognized appraisal firms
that were engaged by us in connection with our establishment of a chassis
securitization facility in July 2000. As the managing member of Chassis
Holdings, Trac Lease exercises sole managerial control over the entity's
operations. Chassis Holdings leases all of its chassis to Trac Lease at a rental
rate equal to the then current Trac Lease fleet average per diem. Chassis
Holdings and the holders of the preferred membership units are party to a
Put/Call Agreement which provides that the holders of preferred units may put
such units to Chassis Holdings under certain circumstances and Chassis Holdings
has the right to redeem such units under certain circumstances. Chassis Holdings
will be required to make certain option payments to the holders of the preferred
membership units in order to preserve its right to redeem such units. Dividends
paid on the common units and distributions on the preferred units owned by The
Ivy Group, totaling $3.1 million and $1.7 million for 2002 and 2001,
respectively, are included in minority interest (income)/expense, net, in the
accompanying consolidated statement of income.

Trac Lease previously leased an additional 983 chassis from The
Ivy Group under a lease with buyout provisions expiring in 2000. In 2000 Trac
Lease paid The Ivy Group lease payments of $252,000 under this agreement. Trac
Lease exercised its buyout right under the lease during 2000 and purchased the
chassis for $2,212,000.

During 1992 through 1996, The Ivy Group borrowed $13.4 million
from us. The loan bore interest at LIBOR plus 1.75% repayable on an interest
only basis, subject to maintenance of fixed loan to collateral value ratios, and
will mature in 2013. In connection with this loan, The Ivy Group executed a
Chattel Mortgage Security Agreement and Assignment under which we were granted a
security interest in 4,364 chassis owned by The Ivy Group and we were granted an
assignment of all rights to receive rental payments and proceeds related to the
lease of these chassis. This Ivy Group collateral was contributed, subject to
this debt to us of $13.4 million, to Chassis Holdings as part of our July 1,
2001 restructuring with The Ivy Group.

The members of the Board of Directors have unanimously
determined that the terms of all arrangements between The Ivy Group and Trac
Lease, including the formation of Chassis Holdings, are beneficial and fair to
Interpool.

The Ivy Group has entered into an agreement with us pursuant to
which it has agreed not to engage in any business activities that are
competitive with the business activities of Interpool or its subsidiaries
without our prior written consent.

The Ivy Group Guarantee of PCR Line of Credit

In connection with the sale of PCR in December 2001, Martin
Tuchman and Raoul Witteveen agreed in March 2002 to guarantee a pre-existing
line of credit between PCR and Yardville National Bank in the amount of
$3,000,000 and the Company was released from a guarantee it had previously
executed. This guarantee was subsequently paid off through advances made to PCR
by The Ivy Group. PCR's line of credit with Yardville National Bank was reduced
to $1,666,000 in March 2002 and later increased to $2,000,000 in September 2002.
Advances amounting to $1,983,134 and $698,000 in 2002 and 2003, respectively,
were made to PCR by The Ivy Group to pay off borrowings under the line of credit
and to provide working capital. The Ivy Group is a partnership controlled by
certain current and former officers and directors of the Company. The advances
made by The Ivy Group to PCR are considered capital contributions to the Company
and payments by the Company to PCR. The payments to PCR have been determined to
be uncollectible and have been expensed by the Company and included in other
(income)/expense, net. Payments made in 2002 amounting to $1,983,134 have been
included in additional paid in capital. The remaining payments made in 2003 of
$698,000 have been included in accounts payable and accrued expenses and will be
reclassified to additional paid in capital in the period when the payments were
made.

Eurochassis L.P. Transactions

Eurochassis L.P., a New Jersey limited partnership in which
Raoul J. Witteveen is one of the limited partners and the general partner,
leases 100 chassis to Trac Lease for an annual lease payment of approximately
$91,000. The annual lease term renews automatically unless canceled by either
party prior to the first day of the renewal period. The members of the Board of
Directors have unanimously determined that the terms of all arrangements between
Eurochassis L.P. and Trac Lease are beneficial and fair to the Company.

Radcliff Consultation Services Agreement

We entered into a Consultation Services Agreement with Radcliff
Group, Inc. dated as of January 1, 1992, as amended and restated in February
1993, pursuant to which Radcliff Group appointed Warren L. Serenbetz, a
stockholder and Director of Interpool, as Executive Consultant. The Consultation
Services Agreement was terminated as of January 1, 1995. In accordance with the
terms of the Consultation Services Agreement, following such termination
Radcliff Group remained entitled to receive its full annual consultation
services fee in the amount of $492,000 through December 31, 2002 and
reimbursement to both the designated Executive Consultant and his spouse of all
health related costs and expenses that were not advanced or reimbursed to the
Executive Consultant pursuant to our medical and dental insurance plans through
December 2007.

Atlas Consulting Agreement

In February 1998, we entered into a non-exclusive Consulting
Agreement with Atlas Capital Partners, LLC pursuant to which Mitchell I. Gordon,
a Director of Interpool from 1998 to 2003 and Chief Financial Officer and
Executive Vice President from October 2000 to July 2003, provided investment
banking consultation services to us. Under the terms of the Consulting
Agreement, Atlas was to have been paid $240,000 (plus reimbursement of
reasonable expenses), additional compensation of $560,000 and a twenty percent
carried interest in investments made with funds provided by Interpool. In
addition, Atlas was contractually entitled to an annual bonus in an amount that
is usual and customary in the investment banking business for investment
opportunities actually completed by us subject to set-off of the $560,000
additional compensation. In 2000, other compensation in the amount of
$1,650,000, to be paid over three years, was earned by Atlas in connection with
the acquisition by us of the North American Intermodal Division of Transamerica.
As of October 2000, Mr. Gordon was named our Chief Financial Officer and
Executive Vice President and the Consulting Agreement was terminated. Mr. Gordon
resigned as an officer in July 2003 and a director in October 2003.

Executive Office Lease

During 2001, we leased approximately 28,500 square feet of
commercial space for our executive offices in Princeton, New Jersey from 211
College Road Associates, a New Jersey general partnership. Martin Tuchman, a
Director and the Chief Executive Officer and Warren L. Serenbetz, a Director of
the Company, hold a direct or indirect equity interest of 89.73% in 211 College
Road Associates. The 2001 annual base rental for this property was approximately
$557,000 under a triple net lease expiring in 2010. In the opinion of our
management, rent paid under this lease does not exceed rent that we would have
paid in an arms' length transaction with an unrelated third party.

On January 28, 2002, we executed a Purchase and Sale Agreement,
pursuant to which, on May 1, 2002, we purchased the office building in Princeton
which houses our executive offices from 211 College Road Associates. The fair
market value purchase price of the approximately 39,000 square feet building was
$6,250,000, based upon a determination of the fair market value of the property
by an independent property appraisal firm. The purchase price and other terms of
the purchase were approved unanimously by our Board of Directors.

Bank Loans

In April 2003 and August 2003 we borrowed $16,000,000 and
$7,000,000, respectively, from Yardville National Bank, a subsidiary of an
entity in which Martin Tuchman owns approximately five percent of the common
stock and serves on the Executive Committee. The term of the $16,000,000 loan is
three years. Thirty four fixed monthly principal payments of $250,000 commencing
May 25, 2003 are due with a final principal payment of $7,500,000 due on March
25, 2006. Interest, at an initial rate of 4.25%, is adjusted monthly based on
the prime rate as published in the Wall Street Journal subject to a 4% minimum
and 5% maximum per annum rate.

The term of the $7,000,000 loan is five years. Fifty nine fixed
monthly principal payments of $75,000 commencing September 7, 2003 are due with
a final principal payment of $2,575,000 due on August 7, 2008. Interest, at an
initial rate of 4% is adjusted monthly based on the prime rate as published in
the Wall Street Journal subject to a 4% minimum and 6% maximum per annum rate.

In September 2000, Yardville National Bank provided a revolving
line of credit to the Company. The line of credit was initially $9,750,000 and
was secured by equipment and the related leases. The interest rate was Yardville
National Bank's base interest rate minus .5%. The Company utilized a portion of
this facility from inception through April 2002 when the loan balance was paid
and the facility ended.

In connection with our borrowings from Yardville National Bank,
our Board of Directors unanimously determined that the interest rate and other
terms of such borrowings were at least as favorable to us as could have been
obtained in an arms'-length transaction with an unrelated third party.

In addition to our borrowings from Yardville National Bank,
beginning in May 2000 Yardville National Bank provided a revolving line of
credit to our subsidiary PCR. The line of credit was initially $2,500,000 and
was increased to $5,000,000 in July 2000 (upon termination of a similar line of
credit provided to our subsidiary Microtech). The interest rate was Yardville
National Bank's base interest rate minus .5%. Advances under this line of credit
were secured by a first lien on PCR's business assets. In connection with our
sale of our interest in PCR in December 2001, Yardville National Bank released
its security interest in PCR's assets and reduced the amount of the line to
$3,000,000. At the same time, we provided a guarantee of this line of credit on
PCR's behalf. In March 2002, the amount of the credit line was further reduced
to approximately $1,650,000, the balance then outstanding, and, at our request,
Yardville National Bank terminated our guarantee and accepted in lieu thereof a
guarantee from certain of our officers and directors. The PCR line of credit was
renewed and increased to $2,000,000 in September 2002.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND
SERVICES

Audit Fees

The total amount of fees billed by our independent auditors KPMG
LLP for professional services performed in connection with the audits of our
2002 consolidated financial statements and restated 2001 and 2000 consolidated
financial statements was approximately $5,200,000. Services provided by KPMG
LLP include reviews of interim financial information included in our Quarterly
Reports on Form 10-Q during 2002. In addition, $209,500 was billed by Arthur
Andersen LLP during 2002. Such billings were for services performed by Arthur
Andersen LLP related to the audit of our consolidated financial statements
included in our Annual Report on Form 10-K for the year ended December 31, 2001
and for a review of interim financial information included in our March 31, 2002
Quarterly Report on Form 10-Q.

Audit Related Fees

The total amount of fees billed by our independent auditors
during the year ended December 31, 2002 for assurance and related services that
were reasonably related to the performance of the audit or review of our
financial statements and are not included in the preceding paragraph was
approximately $175,500, which included approximately $50,000 by KPMG LLP and
approximately $125,500 by Arthur Andersen LLP. The services provided by KPMG LLP
primarily consisted of the performance of procedures in connection with the
Company's 2002 registration statement and the issuance of agreed upon procedures
reports in connection with securitization transactions. The services provided by
Arthur Andersen LLP primarily consisted of the issuance of agreed upon
procedures reports in connection with securitization transactions.

Tax Fees

The total amount of fees billed by our independent auditors KPMG
LLP during the year ended December 31, 2002 for services rendered relating to
tax compliance, tax advice and tax planning was approximately $25,000 by KPMG.
The services provided by KPMG LLP primarily related to consultation on tax
planning matters.

All Other Fees

There were no fees billed by our independent auditors during the
year ended December 31, 2002 for products and services, other than the services
referred to in the preceding paragraphs.

In accordance with policies adopted by our Audit Committee, all
non-audit related services to be performed by our independent public accountants
must be approved in advance by our Audit Committee or by the chairman of our
Audit Committee. However, no pre-approval is required with respect to the
provision of a non-audit service if (i) the aggregate amount of all non-audit
services constitutes not more than 5% of the total amount of revenues we have
provided to the auditors during the fiscal year in which the non-audit services
are provided; (ii) we did not recognize such services at the time of the
engagement to be non-audit services; and (iii) such services are promptly
brought to the attention of our Audit Committee and approved prior to the
completion of the audit by our Audit Committee or the chairman of our Audit
Committee.

All fees described above under Audit-Related Fees, Tax Fees and
All Other Fees were approved by our Audit Committee or by the chairman of our
Audit Committee.

We did not pay non-audit fees in excess of 50% of the total of
all Accountant Fees.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON FORM 8-K

(a)(1) FINANCIAL STATEMENTS

INTERPOOL, INC.

Report of Independent Public Accountants
Consolidated Balance Sheets--At December 31, 2002 and 2001 (restated)
Consolidated Statements of Income for the Years Ended December 31, 2002, 2001 
(restated) and 2000 (restated) 
Consolidated Statements of Changes in Stockholders' Equity for the Years Ended 
December 31, 2002, 2001 (restated) and 2000 (restated)
Consolidated Statements of Cash Flows for the Years Ended December 31, 2002,
2001 (restated) and 2000 (restated) 
Notes 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

|3.1 |  | Restated Certificate of Incorporation of the Company (incorporated
herein by reference to the Company's Registration Statement on Form S-1 (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 (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 (Reg.
No. 33-59498)).
|--- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.2 |  | Form of Indenture between Interpool, Inc. and The Bank of New
York, as trustee, relating to the 9.25% Convertible Redeemable Subordinated
Debentures (incorporated herein by reference is the Company's Registration
Statement on Form S-1 (Reg. No. 333-86370)).
|--- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.3 |  | Form of First Supplemental Indenture between Interpool, Inc. and
The Bank of New York, as trustee, relating to the 9.25% Convertible Redeemable
Subordinated Debentures (incorporated herein by reference is the Company's
Registration Statement on Form S-1 (Reg. No. 333-86370)).
|--- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.4 |  | Form of Subscription Rights Agreement (incorporated herein by
reference is the Company's Registration Statement on Form S-1 (Reg. No.
333-86370)).
|--- | - | --------------------------------------------------------------------------------------------------------------------------------------------------

|4.5 |  | Form of Subscription Documentation for Standby Purchasers
(incorporated herein by reference is the Company's Registration Statement on
Form S-1 (Reg. No. 333-86370)).
|--- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.6 |  | Indenture between Interpool, Inc. and United States Trust Company of New
York, as Trustee, related to the 7.35% Notes dated July 29, 1997 (incorporated
herein by reference to the Company's Current Report on Form 8-K, dated July
29, 1997).
|--- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.7 |  | Indenture between Interpool, Inc. and United States Trust Company
of New York, as trustee, related to the 7.20% Notes, dated August 5, 1997
(incorporated herein by reference to the Company's Registration Statement on
Form S-4 (Reg. No. 333-38705)).
|--- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.8 |  | Indenture between the Company and IBJ Schroeder Bank & Trust
Company, as Trustee, related to the Junior Subordinated Debt Securities dated
January 27, 1997 (incorporated herein by reference to the Company's Annual
Report on Form 10-K for the period ended December 31, 1996).
|--- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.9 |  | First Supplemental Indenture between Interpool, Inc. and IBJ
Schroeder Bank & Trust Company, as Trustee, related to the 9-7/8% Series A
and Series B Junior Subordinated Deferrable Interest Debentures dated January
27, 1997 (incorporated herein by reference to the Registrant's Annual Report on
Form 10-K for the period ended December 31, 1996).
|--- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|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 (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 (Reg. No.
33-59498)).
|---- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.3 |  | Employment Agreement dated as of January 1, 1992 by and between
Martin Tuchman and the Company (incorporated herein by reference to the
Company's Registration Statement on Form S-1 (Reg. No. 33-59498)).
|---- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.4 |  | Employment Agreement dated as of October 1, 2003 by and between
Herbert Mertz and the Company.
|---- | - | ----------------------------------------------------------------------------------------------

|10.5 |  | 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 (Reg. No. 33-59498)).
|---- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.6 |  | Stock Option Plan for Executive Officers and Directors
(incorporated herein by reference to the Company's Registration Statement on
Form S-1 (Reg. No. 33-59498)).
|---- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.7 |  | 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 (Reg. No. 33-59498)).
|---- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.8 |  | 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 (Reg. No. 33-71538)).
|---- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.9 |  | 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 (Reg. No. 33-59498)).
|---- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.10 |  | 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 (Reg. No. 33-59498)).
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.11 |  | Lease Agreements between The Ivy Group and Trac Lease
(incorporated herein by reference to the Company's Registration Statement on
Form S-1 (Reg. No. 33-59498)).
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.12 |  | 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 (Reg. No. 33-59498)).
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.13 |  | 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 (Reg. No. 33-59498)).
|----- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.14 |  | 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 (Reg. No. 33-59498)).
|----- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.15 |  | 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 (Reg. No. 33-59498)).
|----- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.16 |  | 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 (Reg. No.
33-59498)).
|----- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.17 |  | Indemnity Agreement between the Company and other directors
(incorporated herein by reference to the Company's Registration Statement on
Form S-1 (Reg. No. 33-59498)).
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.18 |  | 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 (Reg. No. 33-59498)).
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.19 |  | Indenture between Interpool, Inc. and United States Trust Company
of New York, as Trustee, related to the 7.35% Notes dated July 29, 1997
(incorporated herein by reference to the Company's Current Report on Form 8-K,
dated July 29, 1997).
|----- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.20 |  | Indenture between Interpool, Inc. and United States Trust Company
of New York, as trustee, related to the 7.20% Notes, dated August 5, 1997
(incorporated herein by reference to the Company's Registration Statement on
Form S-4 (Reg. No. 333-38705)).
|----- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.21 |  | Indenture between the Company and IBJ Schroeder Bank & Trust
Company, as Trustee, related to the Junior Subordinated Debt Securities dated
January 27, 1997 (incorporated herein by reference to the Company's Annual
Report on Form 10-K for the period ended December 31, 1996).
|----- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.22 |  | First Supplemental Indenture between Interpool, Inc. and IBJ
Schroeder Bank & Trust Company, as Trustee, related to the 9-7/8% Series A
and Series B Junior Subordinated Deferrable Interest Debentures dated January
27, 1997 (incorporated herein by reference to the Registrant's Annual Report on
Form 10-K for the period ended December 31, 1996).
|----- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.23 |  | 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 December 31, 1996).
|----- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.24 |  | 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 December 31,
1995).
|----- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.25 |  | 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 December 31, 1995).
|----- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.26 |  | Chassis Lease Agreement dated January 1, 1998 between The Ivy
Group and Trac Lease, Inc. (incorporated herein by reference to the Company's
Annual Report on Form 10-K for the period ended December 31, 2000).
|----- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.27 |  | Consulting Agreement between Interpool, Inc. and Atlas Capital
Partners dated February 28, 1998 (incorporated herein by reference to the
Company's Quarterly Report on Form 10-Q for period ended June 30, 1998).
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.28 |  | 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).
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.29 |  | 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).
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.30 |  | Chassis Lease Agreement dated January 1, 2001 between The Ivy
Group and Trac Lease, Inc. (incorporated herein by reference to the Company's
Annual Report on Form 10-K for the period ended December 31, 2000).
|----- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.31 |  | Asset Purchase Agreement, dated as of January 26, 2001, by and
between Interpool, Inc. and Transport International Pool, Inc. (incorporated
herein by reference to the Company's Form 8-K filed on April 3, 2001).
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.32 |  | Amendment No. 1 to the Asset Purchase Agreement, dated as of
March 30, 2001, by and between Interpool, Inc. and Transport International Pool,
Inc. (incorporated herein by reference to the Company's Form 8-K filed on April
3, 2001).
|----- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.33 |  | Chassis Holdings I LLC Operating Agreement dated as of July 1, 2001
(incorporated herein by reference to the Company's Quarterly Report on Form
10-Q filed November 14, 2001).
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.34 |  | Chassis Holdings I LLC Put/Call Agreement dated as of July 1, 2001
(incorporated herein by reference to the Company's Quarterly Report on Form
10-Q filed November 14, 2001).
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.35 |  | Sale and Purchase Agreement between 211 College Road Associates
and the Company (incorporated herein by reference to the Company's Annual Report
on Form 10-K for the period ended December 31, 2001).
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.36 |  | Third Amended and Restated Senior Loan and Security Agreement
dated as of December 17, 1997 among Interpool, Inc., Trac Lease, Inc., Interpool
Limited, Interpool Finance Corp. with CoreStates Bank, N.A., as Agent, and PNC
Bank, National Association, as Co-Agent, and the Institutional Lenders listed
Herein, as Lenders (incorporated herein by reference to the Company's
Registration Statement on Form S-1 (Reg. No. 333-86370)).
|----- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.37 |  | First Amendment to Third Amended and Restated Senior Loan and
Security Agreement dated as of November 17, 1998 among Interpool, Inc., Trac
Lease, Inc., Interpool Limited, Interpool Finance Corp. with First Union
National Bank (Successor to CoreStates Bank, N.A.), as Agent, and PNC Bank,
National Association, as Co-Agent, and the Institutional Lenders listed Herein,
as Lenders (incorporated herein by reference to the Company's Registration
Statement on Form S-1 (Reg. No. 333-86370)).
|----- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.38 |  | Second Amendment to Third Amended and Restated Senior Loan and
Security Agreement dated as of May 26, 2000 among Interpool, Inc., Trac Lease,
Inc., Interpool Limited, Interpool Finance Corp. with First Union National Bank
(Successor to CoreStates Bank, N.A.), as Agent, and PNC Bank, National
Association, as Co-Agent, and the Institutional Lenders listed Herein, as
Lenders (incorporated herein by reference to the Company's Registration
Statement on Form S-1 (Reg. No. 333-86370)).
|----- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.39 |  | Third Amendment to Third Amended and Restated Senior Loan and
Security Agreement dated as of July 20, 2000 among Interpool, Inc., Trac Lease,
Inc., Interpool Limited, Interpool Finance Corp. with First Union National Bank
(Successor to CoreStates Bank, N.A.), as Agent, and PNC Bank, National
Association, as Co-Agent, and the Institutional Lenders listed Herein, as
Lenders (incorporated herein by reference to the Company's Registration
Statement on Form S-1 (Reg. No. 333-86370)).
|----- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.40 |  | Fourth Amendment to Third Amended and Restated Senior Loan and
Security Agreement dated as of October 6 2000 among Interpool, Inc., Trac Lease,
Inc., Interpool Limited, Interpool Finance Corp. with First Union National Bank
(Successor to CoreStates Bank, N.A.), as Agent, and PNC Bank, National
Association, as Co-Agent, and the Institutional Lenders listed Herein, as
Lenders (incorporated herein by reference to the Company's Registration
Statement on Form S-1 (Reg. No. 333-86370)).
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.41 |  | Fifth Amendment to the Third Amended and Restated Senior Loan and
Security Agreement dated as of August 23, 2002 among Interpool, Inc., Trac
Lease, Inc., Interpool Limited, Interpool Finance Corp. with Wachovia Bank,
National Association (successor to CoreStates Bank, N.A. and f/k/a First Union
National Bank), as Agent, and PNC Bank, National Association, as Co-Agent, and
the Institutional Lenders listed herein, as Lenders.
|----- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.42 |  | Sixth Amendment to the Third Amended and Restated Senior Loan and
Security Agreement dated as of March 31, 2002 among Interpool, Inc., Trac Lease,
Inc., Interpool Limited, Interpool Finance Corp. with Wachovia Bank, National
Association (successor to CoreStates Bank, N.A. and f/k/a First Union National
Bank), as Agent, and PNC Bank, National Association, as Co-Agent, and the
Institutional Lenders listed herein, as Lenders.
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.43 |  | Seventh Amendment to the Third Amended and Restated Senior Loan
and Security Agreement dated as of May 30, 2003 among Interpool, Inc., Trac
Lease, Inc., Interpool Limited, Interpool Finance Corp. with Wachovia Bank,
National Association (successor to CoreStates Bank, N.A. and f/k/a First Union
National Bank), as Agent, and PNC Bank, National Association, as Co-Agent, and
the Institutional Lenders listed herein, as Lenders.
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.44 |  | Eighth Amendment to the Third Amended and Restated Senior Loan
and Security Agreement dated as of July 31, 2003 among Interpool, Inc., Trac
Lease, Inc., Interpool Limited, Interpool Finance Corp. with Wachovia Bank,
National Association (successor to CoreStates Bank, N.A. and f/k/a First Union
National Bank), as Agent, and PNC Bank, National Association, as Co-Agent, and
the Institutional Lenders listed herein, as Lenders.
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.45 |  | Ninth Amendment to the Third Amended and Restated Senior Loan and
Security Agreement dated as of October 31, 2003 among Interpool, Inc., Trac
Lease, Inc., Interpool Limited, Interpool Finance Corp. with Wachovia Bank,
National Association (successor to CoreStates Bank, N.A. and f/k/a First Union
National Bank), as Agent, and PNC Bank, National Association, as Co-Agent, and
the Institutional Lenders listed herein, as Lenders.
|----- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.46 |  | Tenth Amendment to the Third Amended and Restated Senior Loan and
Security Agreement dated as of January 8, 2004 among Interpool, Inc., Trac
Lease, Inc., Interpool Limited, Interpool Finance Corp. with Wachovia Bank,
National Association (successor to CoreStates Bank, N.A. and f/k/a First Union
National Bank), as Agent, and PNC Bank, National Association, as Co-Agent, and
the Institutional Lenders listed herein, as Lenders.
|----- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.47 |  | Separation Agreement between Mitchell I. Gordon and Interpool,
Inc. dated as of July 15, 2003 (incorporated by reference to the Company's Form
8-K Filed on August 5, 2003).
|----- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|14.1 |  | Code of Ethics.
|---- | - | ---------------

|18.1 |  | Letter from KPMG LLP re change in Accounting Principles.
|---- | - | --------------------------------------------------------

|21.1 |  | Subsidiaries of the Company (incorporated herein by reference to
the Company's Registration Statement on Form S-1 (Reg. No. 33-71538)).
|---- | - | ---------------------------------------------------------------------------------------------------------------------------------------

|31.1 |  | Certification of Martin Tuchman.
|---- | - | --------------------------------

|31.2 |  | Certification of Richard W. Gross.
|---- | - | ----------------------------------

|32.1 |  | Certification of Martin Tuchman.
|---- | - | --------------------------------

|32.2 |  | Certification of Richard W. Gross.
|---- | - | ----------------------------------

|99.1 |  | Press Release dated February 11, 2003.
|---- | - | --------------------------------------

|99.2 |  | Press Release dated March 6, 2003 (incorporated by reference to
the Company's Form 8-K filed on March 14, 2003).
|---- | - | ----------------------------------------------------------------------------------------------------------------

|99.3 |  | Press Release dated March 11, 2003.
|---- | - | -----------------------------------

|99.4 |  | Press Release dated March 20, 2003.
|---- | - | -----------------------------------

|99.5 |  | Press Release dated May 1, 2003.
|---- | - | --------------------------------

|99.6 |  | Press Release dated May 14, 2003.
|---- | - | ---------------------------------

|99.7 |  | Press Release dated June 19, 2003.
|---- | - | ----------------------------------

|99.8 |  | Press Release dated July 18, 2003 (incorporated by reference to the
Company's Form 8-K filed on July 18, 2003).
|---- | - | ---------------------------------------------------------------------------------------------------------------

|99.9 |  | Press Release dated July 18, 2003 (incorporated by reference to
the Company's Form 8-K filed July 18, 2003).
|---- | - | ------------------------------------------------------------------------------------------------------------

|99.10 |  | Press Release dated September 18, 2003.
|----- | - | ---------------------------------------

|99.11 |  | Press Release dated October 10, 2003 (incorporated by reference to the
Company's Form 8-K filed October 20, 2003).
|----- | - | ------------------------------------------------------------------------------------------------------------------

|99.12 |  | Press Release dated October 17, 2003 (incorporated by reference to the
Company's Form 8-K filed October 20, 2003).
|----- | - | ------------------------------------------------------------------------------------------------------------------

|99.13 |  | Press Release dated November 5, 2003 (incorporated by reference to
the Company's Form 8-K filed November 6, 2003).
|----- | - | ------------------------------------------------------------------------------------------------------------------

|99.14 |  | Press Release dated December 2, 2003.
|----- | - | -------------------------------------

|99.15 |  | Press Release dated December 15, 2003.
|----- | - | --------------------------------------

|99.16 |  | Press Release dated December 29, 2003 (incorporated by reference to the
Company's Form 8-K filed December 29, 2003).
|----- | - | --------------------------------------------------------------------------------------------------------------------

(b) REPORTS ON FORM 8-K

(b)(1) No reports on Form 8-K were filed during the quarter
ended December 31, 2002.

Independent Auditors' Report on Supplementary
Information

The Board of Directors
Interpool, Inc.:

We have audited and reported separately herein on the
consolidated balance sheets of Interpool, Inc. as of December 31, 2002 and 2001
and the related consolidated statements of income, changes in stockholders'
equity and cash flows for each of the years in the three year period ended
December 31, 2002. In connection with our audits of the aforementioned
consolidated financial statements, we also audited the related consolidated
financial statement Schedule II included in this Annual Report on Form 10-K.
This consolidated financial statement schedule is the responsibility of the
Company's management. Our responsibility is to express an opinion on this
consolidated financial statement schedule based on our audits.

In our opinion, such consolidated financial statement schedule,
when considered in relation to the basic consolidated financial statements taken
as a whole, presents fairly, in all material respects, the information set forth
therein.

As discussed in Note 2 to the consolidated financial statements,
the Company has restated its consolidated balance sheet as of December, 31,
2001, and the related consolidated statements of income, changes in
stockholders' equity, and cash flows for each of the years in the two year
period ended December 31, 2001, which consolidated financial statements were
previously audited by other independent auditors who have ceased operations.

As discussed in Notes 1, 6,
and 11 to the consolidated financial statements, in 2002 the Company changed its
method of accounting for (i) goodwill and (ii) the impairment or disposal of
long-lived assets; in 2001 the Company changed its method of accounting for
derivative instruments; and in 2000 the Company changed its method of accounting
for repair costs on its equipment from the accrual in advance to the direct
expense method.

(Signed) KPMG LLPNew York, New York
January 9, 2004

INTERPOOL, INC. AND SUBSIDIARIES
SCHEDULE IIVALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 and 2000

ALLOWANCE FOR DOUBTFUL ACCOUNTS

`(in thousands)

                                                                  Reclassification
                                                                      of Liabilities
                                                                       of Business
                                                                       Transferred                                 Balance
                                      Balance at  Charge to             Under                                         at
                                      Beginning   Costs and             Contractual                                 End of
                                        of Year   Expenses   Acquired   Agreement  (Write-offs)  Recoveries  Other   Year

Year Ended December 31, 2002            $6,674     $7,843    $1,898     $-          $(2,504)        $132     $(10) $14,033
                                        ======     ======    ======     ==          ========        ====      ====  =======

Year Ended December 31, 2001(restated) $16,372    $9,001      -        $(538)      $(18,327)       $170       $(4)  $6,674
                                       =======    ======      =        ======      =========       ====       ====  ======

Year Ended December 31, 2000(restated) $11,508    $3,784    $1,281     $-            $(760)        $563       $(4)  $16,372
                                       =======    ======    ======     ==            ======        ====       ====  =======`

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.

`INTERPOOL, INC.
                                     (Registrant)

January 9, 2004                      By  /s/ Martin Tuchman
                                     Martin Tuchman
                                     Chairman of the Board, Chief Executive Officer, President
                                     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.

January 9, 2004                      By /s/ Martin Tuchman
                                     Martin Tuchman
                                     Chairman of the Board, Chief Executive Officer, President
                                     and Director (Principal Executive Officer)



January 9, 2004                      By /s/ Warren L. Serenbetz
                                     Warren L. Serenbetz
                                     Director


January 9, 2004                      By /s/ Arthur L. Burns
                                     Arthur L. Burns
                                     Executive Vice President, General Counsel, Secretary
                                     and Director


January 9, 2004                      By  /s/ Peter D. Halstead
                                     Peter D. Halstead
                                     Director


January 9, 2004                      By /s/ Joseph J. Whalen
                                     Joseph J. Whalen
                                     Director


January 9, 2004                      By  /s/ Clifton H. W. Maloney
                                     Clifton H. W. Maloney
                                     Director


January 9, 2004                      By /s/ Richard W. Gross
                                     Richard W. Gross
                                     Acting Chief Financial Officer


January 9, 2004                      By /s/ Brian Tracey
                                     Brian Tracey
                                     Senior Vice President Finance
                                     (Principal Accounting Officer)`

EXHIBIT INDEX

|3.1 |  | Restated Certificate of Incorporation of the Company (incorporated
herein by reference to the Company's Registration Statement on Form S-1 (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 (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 (Reg.
No. 33-59498)).
|--- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.2 |  | Form of Indenture between Interpool, Inc. and The Bank of New
York, as trustee, relating to the 9.25% Convertible Redeemable Subordinated
Debentures (incorporated herein by reference is the Company's Registration
Statement on Form S-1 (Reg. No. 333-86370)).
|--- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.3 |  | Form of First Supplemental Indenture between Interpool, Inc. and
The Bank of New York, as trustee, relating to the 9.25% Convertible Redeemable
Subordinated Debentures (incorporated herein by reference is the Company's
Registration Statement on Form S-1 (Reg. No. 333-86370)).
|--- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.4 |  | Form of Subscription Rights Agreement (incorporated herein by
reference is the Company's Registration Statement on Form S-1 (Reg. No.
333-86370)).
|--- | - | --------------------------------------------------------------------------------------------------------------------------------------------------

|4.5 |  | Form of Subscription Documentation for Standby Purchasers
(incorporated herein by reference is the Company's Registration Statement on
Form S-1 (Reg. No. 333-86370)).
|--- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.6 |  | Indenture between Interpool, Inc. and United States Trust Company of New
York, as Trustee, related to the 7.35% Notes dated July 29, 1997 (incorporated
herein by reference to the Company's Current Report on Form 8-K, dated July
29, 1997).
|--- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.7 |  | Indenture between Interpool, Inc. and United States Trust Company
of New York, as trustee, related to the 7.20% Notes, dated August 5, 1997
(incorporated herein by reference to the Company's Registration Statement on
Form S-4 (Reg. No. 333-38705)).
|--- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.8 |  | Indenture between the Company and IBJ Schroeder Bank & Trust
Company, as Trustee, related to the Junior Subordinated Debt Securities dated
January 27, 1997 (incorporated herein by reference to the Company's Annual
Report on Form 10-K for the period ended December 31, 1996).
|--- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|4.9 |  | First Supplemental Indenture between Interpool, Inc. and IBJ
Schroeder Bank & Trust Company, as Trustee, related to the 9-7/8% Series A
and Series B Junior Subordinated Deferrable Interest Debentures dated January
27, 1997 (incorporated herein by reference to the Registrant's Annual Report on
Form 10-K for the period ended December 31, 1996).
|--- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|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 (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 (Reg. No.
33-59498)).
|---- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.3 |  | Employment Agreement dated as of January 1, 1992 by and between
Martin Tuchman and the Company (incorporated herein by reference to the
Company's Registration Statement on Form S-1 (Reg. No. 33-59498)).
|---- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.4 |  | Employment Agreement dated as of October 1, 2003 by and between
Herbert Mertz and the Company.
|---- | - | ----------------------------------------------------------------------------------------------

|10.5 |  | 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 (Reg. No. 33-59498)).
|---- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.6 |  | Stock Option Plan for Executive Officers and Directors
(incorporated herein by reference to the Company's Registration Statement on
Form S-1 (Reg. No. 33-59498)).
|---- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.7 |  | 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 (Reg. No. 33-59498)).
|---- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.8 |  | 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 (Reg. No. 33-71538)).
|---- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.9 |  | 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 (Reg. No. 33-59498)).
|---- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.10 |  | 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 (Reg. No. 33-59498)).
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.11 |  | Lease Agreements between The Ivy Group and Trac Lease
(incorporated herein by reference to the Company's Registration Statement on
Form S-1 (Reg. No. 33-59498)).
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.12 |  | 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 (Reg. No. 33-59498)).
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.13 |  | 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 (Reg. No. 33-59498)).
|----- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.14 |  | 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 (Reg. No. 33-59498)).
|----- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.15 |  | 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 (Reg. No. 33-59498)).
|----- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.16 |  | 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 (Reg. No.
33-59498)).
|----- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.17 |  | Indemnity Agreement between the Company and other directors
(incorporated herein by reference to the Company's Registration Statement on
Form S-1 (Reg. No. 33-59498)).
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.18 |  | 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 (Reg. No. 33-59498)).
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.19 |  | Indenture between Interpool, Inc. and United States Trust Company
of New York, as Trustee, related to the 7.35% Notes dated July 29, 1997
(incorporated herein by reference to the Company's Current Report on Form 8-K,
dated July 29, 1997).
|----- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.20 |  | Indenture between Interpool, Inc. and United States Trust Company
of New York, as trustee, related to the 7.20% Notes, dated August 5, 1997
(incorporated herein by reference to the Company's Registration Statement on
Form S-4 (Reg. No. 333-38705)).
|----- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.21 |  | Indenture between the Company and IBJ Schroeder Bank & Trust
Company, as Trustee, related to the Junior Subordinated Debt Securities dated
January 27, 1997 (incorporated herein by reference to the Company's Annual
Report on Form 10-K for the period ended December 31, 1996).
|----- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.22 |  | First Supplemental Indenture between Interpool, Inc. and IBJ
Schroeder Bank & Trust Company, as Trustee, related to the 9-7/8% Series A
and Series B Junior Subordinated Deferrable Interest Debentures dated January
27, 1997 (incorporated herein by reference to the Registrant's Annual Report on
Form 10-K for the period ended December 31, 1996).
|----- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.23 |  | 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 December 31, 1996).
|----- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.24 |  | 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 December 31,
1995).
|----- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.25 |  | 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 December 31, 1995).
|----- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.26 |  | Chassis Lease Agreement dated January 1, 1998 between The Ivy
Group and Trac Lease, Inc. (incorporated herein by reference to the Company's
Annual Report on Form 10-K for the period ended December 31, 2000).
|----- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.27 |  | Consulting Agreement between Interpool, Inc. and Atlas Capital
Partners dated February 28, 1998 (incorporated herein by reference to the
Company's Quarterly Report on Form 10-Q for period ended June 30, 1998).
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.28 |  | 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).
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.29 |  | 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).
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.30 |  | Chassis Lease Agreement dated January 1, 2001 between The Ivy
Group and Trac Lease, Inc. (incorporated herein by reference to the Company's
Annual Report on Form 10-K for the period ended December 31, 2000).
|----- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.31 |  | Asset Purchase Agreement, dated as of January 26, 2001, by and
between Interpool, Inc. and Transport International Pool, Inc. (incorporated
herein by reference to the Company's Form 8-K filed on April 3, 2001).
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.32 |  | Amendment No. 1 to the Asset Purchase Agreement, dated as of
March 30, 2001, by and between Interpool, Inc. and Transport International Pool,
Inc. (incorporated herein by reference to the Company's Form 8-K filed on April
3, 2001).
|----- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.33 |  | Chassis Holdings I LLC Operating Agreement dated as of July 1, 2001
(incorporated herein by reference to the Company's Quarterly Report on Form
10-Q filed November 14, 2001).
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.34 |  | Chassis Holdings I LLC Put/Call Agreement dated as of July 1, 2001
(incorporated herein by reference to the Company's Quarterly Report on Form
10-Q filed November 14, 2001).
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.35 |  | Sale and Purchase Agreement between 211 College Road Associates
and the Company (incorporated herein by reference to the Company's Annual Report
on Form 10-K for the period ended December 31, 2001).
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.36 |  | Third Amended and Restated Senior Loan and Security Agreement
dated as of December 17, 1997 among Interpool, Inc., Trac Lease, Inc., Interpool
Limited, Interpool Finance Corp. with CoreStates Bank, N.A., as Agent, and PNC
Bank, National Association, as Co-Agent, and the Institutional Lenders listed
Herein, as Lenders (incorporated herein by reference to the Company's
Registration Statement on Form S-1 (Reg. No. 333-86370)).
|----- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.37 |  | First Amendment to Third Amended and Restated Senior Loan and
Security Agreement dated as of November 17, 1998 among Interpool, Inc., Trac
Lease, Inc., Interpool Limited, Interpool Finance Corp. with First Union
National Bank (Successor to CoreStates Bank, N.A.), as Agent, and PNC Bank,
National Association, as Co-Agent, and the Institutional Lenders listed Herein,
as Lenders (incorporated herein by reference to the Company's Registration
Statement on Form S-1 (Reg. No. 333-86370)).
|----- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.38 |  | Second Amendment to Third Amended and Restated Senior Loan and
Security Agreement dated as of May 26, 2000 among Interpool, Inc., Trac Lease,
Inc., Interpool Limited, Interpool Finance Corp. with First Union National Bank
(Successor to CoreStates Bank, N.A.), as Agent, and PNC Bank, National
Association, as Co-Agent, and the Institutional Lenders listed Herein, as
Lenders (incorporated herein by reference to the Company's Registration
Statement on Form S-1 (Reg. No. 333-86370)).
|----- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.39 |  | Third Amendment to Third Amended and Restated Senior Loan and
Security Agreement dated as of July 20, 2000 among Interpool, Inc., Trac Lease,
Inc., Interpool Limited, Interpool Finance Corp. with First Union National Bank
(Successor to CoreStates Bank, N.A.), as Agent, and PNC Bank, National
Association, as Co-Agent, and the Institutional Lenders listed Herein, as
Lenders (incorporated herein by reference to the Company's Registration
Statement on Form S-1 (Reg. No. 333-86370)).
|----- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.40 |  | Fourth Amendment to Third Amended and Restated Senior Loan and
Security Agreement dated as of October 6 2000 among Interpool, Inc., Trac Lease,
Inc., Interpool Limited, Interpool Finance Corp. with First Union National Bank
(Successor to CoreStates Bank, N.A.), as Agent, and PNC Bank, National
Association, as Co-Agent, and the Institutional Lenders listed Herein, as
Lenders (incorporated herein by reference to the Company's Registration
Statement on Form S-1 (Reg. No. 333-86370)).
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.41 |  | Fifth Amendment to the Third Amended and Restated Senior Loan and
Security Agreement dated as of August 23, 2002 among Interpool, Inc., Trac
Lease, Inc., Interpool Limited, Interpool Finance Corp. with Wachovia Bank,
National Association (successor to CoreStates Bank, N.A. and f/k/a First Union
National Bank), as Agent, and PNC Bank, National Association, as Co-Agent, and
the Institutional Lenders listed herein, as Lenders.
|----- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.42 |  | Sixth Amendment to the Third Amended and Restated Senior Loan and
Security Agreement dated as of March 31, 2002 among Interpool, Inc., Trac Lease,
Inc., Interpool Limited, Interpool Finance Corp. with Wachovia Bank, National
Association (successor to CoreStates Bank, N.A. and f/k/a First Union National
Bank), as Agent, and PNC Bank, National Association, as Co-Agent, and the
Institutional Lenders listed herein, as Lenders.
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.43 |  | Seventh Amendment to the Third Amended and Restated Senior Loan
and Security Agreement dated as of May 30, 2003 among Interpool, Inc., Trac
Lease, Inc., Interpool Limited, Interpool Finance Corp. with Wachovia Bank,
National Association (successor to CoreStates Bank, N.A. and f/k/a First Union
National Bank), as Agent, and PNC Bank, National Association, as Co-Agent, and
the Institutional Lenders listed herein, as Lenders.
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.44 |  | Eighth Amendment to the Third Amended and Restated Senior Loan
and Security Agreement dated as of July 31, 2003 among Interpool, Inc., Trac
Lease, Inc., Interpool Limited, Interpool Finance Corp. with Wachovia Bank,
National Association (successor to CoreStates Bank, N.A. and f/k/a First Union
National Bank), as Agent, and PNC Bank, National Association, as Co-Agent, and
the Institutional Lenders listed herein, as Lenders.
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.45 |  | Ninth Amendment to the Third Amended and Restated Senior Loan and
Security Agreement dated as of October 31, 2003 among Interpool, Inc., Trac
Lease, Inc., Interpool Limited, Interpool Finance Corp. with Wachovia Bank,
National Association (successor to CoreStates Bank, N.A. and f/k/a First Union
National Bank), as Agent, and PNC Bank, National Association, as Co-Agent, and
the Institutional Lenders listed herein, as Lenders.
|----- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.46 |  | Tenth Amendment to the Third Amended and Restated Senior Loan and
Security Agreement dated as of January 8, 2004 among Interpool, Inc., Trac
Lease, Inc., Interpool Limited, Interpool Finance Corp. with Wachovia Bank,
National Association (successor to CoreStates Bank, N.A. and f/k/a First Union
National Bank), as Agent, and PNC Bank, National Association, as Co-Agent, and
the Institutional Lenders listed herein, as Lenders.
|----- | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.47 |  | Separation Agreement between Mitchell I. Gordon and Interpool,
Inc. dated as of July 15, 2003 (incorporated by reference to the Company's Form
8-K Filed on August 5, 2003).
|----- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|14.1 |  | Code of Ethics.
|---- | - | ---------------

|18.1 |  | Letter from KPMG LLP re change in Accounting Principles.
|---- | - | --------------------------------------------------------

|21.1 |  | Subsidiaries of the Company (incorporated herein by reference to
the Company's Registration Statement on Form S-1 (Reg. No. 33-71538)).
|---- | - | ---------------------------------------------------------------------------------------------------------------------------------------

|31.1 |  | Certification of Martin Tuchman.
|---- | - | --------------------------------

|31.2 |  | Certification of Richard W. Gross.
|---- | - | ----------------------------------

|32.1 |  | Certification of Martin Tuchman.
|---- | - | --------------------------------

|32.2 |  | Certification of Richard W. Gross.
|---- | - | ----------------------------------

|99.1 |  | Press Release dated February 11, 2003.
|---- | - | --------------------------------------

|99.2 |  | Press Release dated March 6, 2003 (incorporated by reference to
the Company's Form 8-K filed on March 14, 2003).
|---- | - | ----------------------------------------------------------------------------------------------------------------

|99.3 |  | Press Release dated March 11, 2003.
|---- | - | -----------------------------------

|99.4 |  | Press Release dated March 20, 2003.
|---- | - | -----------------------------------

|99.5 |  | Press Release dated May 1, 2003.
|---- | - | --------------------------------

|99.6 |  | Press Release dated May 14, 2003.
|---- | - | ---------------------------------

|99.7 |  | Press Release dated June 19, 2003.
|---- | - | ----------------------------------

|99.8 |  | Press Release dated July 18, 2003 (incorporated by reference to the
Company's Form 8-K filed on July 18, 2003).
|---- | - | ---------------------------------------------------------------------------------------------------------------

|99.9 |  | Press Release dated July 18, 2003 (incorporated by reference to
the Company's Form 8-K filed July 18, 2003).
|---- | - | ------------------------------------------------------------------------------------------------------------

|99.10 |  | Press Release dated September 18, 2003.
|----- | - | ---------------------------------------

|99.11 |  | Press Release dated October 10, 2003 (incorporated by reference to the
Company's Form 8-K filed October 20, 2003).
|----- | - | ------------------------------------------------------------------------------------------------------------------

|99.12 |  | Press Release dated October 17, 2003 (incorporated by reference to the
Company's Form 8-K filed October 20, 2003).
|----- | - | ------------------------------------------------------------------------------------------------------------------

|99.13 |  | Press Release dated November 5, 2003 (incorporated by reference to
the Company's Form 8-K filed November 6, 2003).
|----- | - | ------------------------------------------------------------------------------------------------------------------

|99.14 |  | Press Release dated December 2, 2003.
|----- | - | -------------------------------------

|99.15 |  | Press Release dated December 15, 2003.
|----- | - | --------------------------------------

|99.16 |  | Press Release dated December 29, 2003 (incorporated by reference to the
Company's Form 8-K filed December 29, 2003).
|----- | - | --------------------------------------------------------------------------------------------------------------------