|SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549



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

||X| |  | ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|--- |  | ------------------------------------------------------------------------------------

|FOR THE FISCAL YEAR
ENDED DECEMBER 31, 2001



OR
|-------------------------------------------------

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

|COMMISSION
FILE NUMBER 1-11862



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

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

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


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



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

|Title of Each Class           | Name of Each Exchangeon which Registered
|----------------------------- | ----------------------------------------
|COMMON STOCK, PAR VALUE $.001 | NEW YORK STOCK EXCHANGE                 

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


NONE


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


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


The aggregate market value
of the voting stock held by non-affiliates of the registrant was approximately
$159,909,886 as of March 25, 2002.


At March 25, 2002, there
were 27,363,352 shares of the registrants Common Stock outstanding.


DOCUMENTS
INCORPORATED BY REFERENCE


Portions of the
registrants Proxy Statement for the Annual Meeting of Shareholders to be
held on May 8, 2002 are incorporated by reference into Part III of the Form
10-K.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|INTERPOOL,
INC.


FORM 10-K


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

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

|2
|-

|PART I


ITEM 1.
BUSINESS


General


We are the largest lessor
of intermodal chassis in the United States and one of the worlds leading lessors
of intermodal dry freight standard containers. At December 31, 2001, our chassis
fleet totaled approximately 190,000 chassis and our container fleet totaled
approximately 703,000 twenty-foot equivalent units (TEUs). From 1996 to 2001, we
increased the size of our chassis fleet at a compound annual rate of 27% and our
container fleet at a compound annual rate of 19%.


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
70% of our total fleet of chassis and 84% 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 98%;
| |  | - |  | ----------------------------------------------------------------------------------------------

| |  |  |  | achieve
stable and predictable earnings;
| |  | - |  | ----------------------------------------

| |  |  |  | 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; and
| |  | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | operate
with low overhead and staff levels.
| |  | - |  | -------------------------------------------

|Approximately 30% 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 and those of our customers.


Approximately 16% of our
containers are currently leased on a short-term basis. Our 50%-owned affiliate,
Container Applications International, Inc. (CAI), markets our containers
available for short-term leasing as part of its fleet, thereby 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 leverage
in the marketplace by giving us the worlds third largest container lessor
fleet on a combined basis.


We lease our chassis and
containers to over 400 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, agents and
marketing representatives. We believe one of the key factors in our ability to
compete effectively has been the long-standing relationships that our management
and marketing representatives 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. A chassis is a rectangular, wheeled steel frame, generally 20 or 40 feet in
length, built specifically for the purpose of transporting a container. Once
mounted, the 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 the lack of
international standards for chassis, chassis used in the United States are
seldom used in other countries.



3
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|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 truck and across international borders with minimal
customs formalities. Containerization is more efficient, more economical and
safer in the transportation of cargo than break bulk transport in
which the goods are unpacked and repacked at various intermediate points 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 International Standards Organization
precipitated a rapid growth of the container industry, as shipping companies
recognized the advantages of containerization over traditional break bulk
transportation of cargo. This growth resulted in substantial investments in
containers, container ships, port facilities, chassis, specialized rail cars and
handling equipment.


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


Worldwide container traffic
at the worlds major ports has grown at a compound annual rate of 9% since
1990. The demand for containers is influenced primarily by the volume of
international and domestic trade. In recent years, however, the rate of growth
in the container industry has exceeded that of world trade as a whole due to
several factors, including:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | the
existence of geographical trade imbalances;
| |  | - |  | -----------------------------------------------

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

| |  |  |  | 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. Management believes that this trend
should serve to accelerate the growth of intermodal transportation, and hence
result in increased chassis and container demand.


The Leasing
Market


Leasing companies own
approximately half of the domestic chassis and half of the worlds
container fleet with the balance owned predominantly by shipping lines and
railroads. 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
lessees with an alternative source of financing in a traditionally capital-intensive
industry;
| |  | - |  | ------------------------------------------------------------------------------------------------------

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

| |  |  |  | enable
lessees to benefit from leasing companies relationships with equipment manufacturers;
| |  | - |  | ---------------------------------------------------------------------------------------------

| |  |  |  | enable
lessees to accommodate seasonal use and/or geographic concentration, thereby limiting
their capital investment and storage costs; and
| |  | - |  | --------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | enable
lessees to maintain an optimal mix of equipment types in their fleets.
| |  | - |  | -----------------------------------------------------------------------------

|4
|-

|Because of these benefits,
container shipping lines and railroads generally obtain a significant portion of
their container 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 containers 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. Most short-term
leases are master leases, under which a customer reserves the right
to lease a certain number of containers, as needed under a general agreement
between the lessor and the lessee. Long-term leases provide the lessee with
advantageous pricing structures, but usually contain an early termination
provision allowing the lessee to return equipment prior to expiration of the
lease only upon payment of an early termination fee 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 more stable and predictable
earnings. Over the past 5 years, the annual utilization of our total chassis and
container fleet has averaged approximately 98%. 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.
| |  | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | Be
a low cost provider of intermodal equipment. We believe a key part of our success has
been our ability to obtain equipment on a low cost basis and to operate as a lean and
efficient organization. Our focus on long-term leasing allows us to operate with less
overhead and staff.
| |  | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | Purchase
chassis and containers to fulfill specific customer orders. We generally purchase new
containers to fulfill new long-term lease orders. Management believes that as a result,
we currently have one of the youngest container fleets of the worlds ten largest
container lessors. The average age of our chassis is approximately 9 years and the
average age of our containers is approximately 4 years. Due to the young age of the
fleet, our equipment spends less time being inspected, repaired and refurbished.
| |  | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  |  | 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.
| |  | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Operations


Lease
Terms. Approximately 70% of our chassis and 84% of our
containers are leased on a long-term basis. Our long-term leases generally have
five to eight year initial terms.


We offer our customers both
operating leases and direct finance leases. Under a direct finance
lease, the customer owns the container at the expiration of the lease term.
Although customers pay a higher per diem rate under a direct finance lease than
under a long-term operating lease, a direct finance lease enables us to provide
customers with access to financing on terms generally comparable to those
available from financial institutions, which provide this type of financing.


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.


5
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|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. Since 1991, we have experienced minimal
early returns under our long-term leases, primarily because of the penalties
involved and because customers must return all containers covered by the
particular long-term lease being terminated, generally totaling several hundred
units, and bear substantial costs related to their repositioning and repair.


Frequently, a lessee will
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.


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.
More than 83,000 movement transactions per month are processed 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. The equipment acquired
from Transamerica was integrated into our billing system on July 1, 2001.


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 on the Eastern seaboard and the Gulf coast.
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 and Savannah. We
also operate chassis pools at railroad locations within the United States.


Depots. We
and our affiliate CAI operate in over 90 locations in all major transportation
markets throughout the world. Depots are facilities owned by third parties at
which containers and other items of transportation equipment are stored,
maintained and repaired. 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 which has a larger supply than demand, we may incur
expenses in repositioning the equipment to a better location. Repositioning
expenses generally range between $50 and $500 per item of equipment, depending
on geographic location, distance and other factors, and may not be fully covered
by the drop-off charge collected from the lessee. In connection with necessary
repositioning, we may also incur storage costs, which generally range between
$0.20 and $2.50 per TEU per day. In addition, we bear certain operating expenses
associated with our chassis and containers, such as the cost 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. With the exception of chassis pool customers, our customers are
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 be refurbished or remanufactured. Refurbishing and remanufacturing
involve substantial cost, although chassis can be remanufactured for
substantially less than the cost of purchasing a new chassis. Alternatively, we
may elect to sell equipment requiring refurbishment.


6
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Disposition of
Chassis and Containers and 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 its fleet, CAI pays us its average total
fleet per diem rate less a management fee. Containers tendered for short-term
leasing under our agreement with CAI are accounted for 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, among other factors, upon
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 due to the high cost of transportation to the United
States of chassis manufactured abroad. Manufacturers of chassis frequently
produce over-the-road trailers as well, and can convert some production
capability to chassis as needed. Because of the rising demand for containers and
the availability of relatively inexpensive labor in the Pacific Rim,
approximately 80% of world container production now occurs in China. Containers
are also produced in other countries, such as South Korea, India, Indonesia,
Malaysia, Taiwan, Turkey, South Africa, and, to a lesser extent, other parts of
the world.


Upon completion of
manufacture, 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


We have developed a
proprietary internet-based real-time chassis management system which we call
PoolStat. PoolStat has enabled us to operate, on a cooperative basis, pools of
chassis which are owned by us and by shipping lines. Under this program,
shipping lines can pool their chassis at common locations such as
marine terminals and railroad depots. The billing and tracking features of
PoolStat enable us to operate chassis pools. 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, centralized maintenance and repair improves service levels to
customers and the trucking community 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
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. PoolStat now has approximately
240,000 chassis under its management and is actively looking to increase its
level of business. We believe that PoolStat is the leading provider of chassis
management tools in the United States.



7
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Marketing and
Customers


We lease our chassis and
containers to over 400 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, 2001, our top 25 customers represented approximately
69% of our consolidated revenues, with no single customer accounting for more
than 6%.


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, and
operational history.


We seek to reduce credit
risk by maintaining insurance coverage against defaults and equipment losses.
Although there can be no assurance that such coverage will be available in the
future, during 2001 we maintained contingent physical damage,
recovery/repatriation and loss of revenue insurance, which provides coverage in
the event of a customers default. The policy covered the cost of
recovering our equipment from the customer, including repositioning costs, the
cost of repairing the equipment and the value of equipment which cannot be
located or is uneconomical to recover. It also covered a portion of the lease
revenues we may lose as a result of the customers default (i.e., 180 days
of lease payments following default). We are currently negotiating the renewal
of our insurance coverage which terminated on January 31, 2002 and expect
that premium rates and deductibles could 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.


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
rationalized 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 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.


Other Business
Operations


In addition to our chassis
and container leasing operations we also receive revenues from other activities.
We lease approximately 500 freight rail cars to railroad companies through our
Chicago based Railpool division.


In December 2001, we sold
our investment in Personal Computer Rentals (PCR) and have initiated a plan to
liquidate the operations of Microtech Leasing Corporation. Both companies are
involved in the computer rental business. They have been accounted for as
discontinued operations in the consolidated financial statements.



8
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Employees


As of December 31, 2001 we
had approximately 196 employees, approximately 173 of whom are based in the
United States, excluding discontinued operations. None of our employees is
covered by a collective bargaining agreement. We believe our relations with our
employees are good.


ITEM 2.
PROPERTIES


In connection with our
acquisition of Transamerica Leasing, Inc.s North American Intermodal
Division (TA) 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 Chicago site
consists of an office and garage building containing approximately 20,000 square
feet on approximately 38 acres. The Atlanta, Georgia site was sold on July 31,
2001.


In July 1998 we purchased
approximately 18,000 square feet of condominium office space located on the
27th floor at 633 Third Avenue, New York, NY 10017 which serves as
our New York office. All of our other commercial office space, aggregating
approximately 42,438 square feet, is leased. Our executive offices are located
at 211 College Road East, Princeton, New Jersey. We also lease office facilities
in Chicago, Atlanta, Jacksonville, Barbados, Aberdeen, Antwerp, Basel, Hong Kong
and Singapore.


On January 28, 2002 we
executed a Purchase and Sale Agreement, pursuant to which we will acquire the
building in Princeton, New Jersey, which houses our corporate offices. The fair
market value purchase price of the approximately 39,000 square feet building
will be $6,250,000.00 as determined by an independent property appraisal firm
and approved by our Board of Directors. We expect to conclude the transaction
during the second quarter of 2002. See Note 13 to the 2001 consolidated
financial statements for further information regarding this transaction.


ITEM 3. LEGAL
PROCEEDINGS


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


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


There were no matters
submitted to a vote of security holders through solicitation of proxies during
the fourth quarter of fiscal 2001.



9
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|PART II


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


Our Common Stock is traded on the
New York Stock Exchange under the symbol IPX. The following table sets forth for the
periods indicated commencing on January 1, 1999, the high and low last reported sale
prices for the Common Stock on the New York Stock Exchange. All share and per share data
have been rounded to the nearest cent.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                   | HIGH |         | LOW |        
|------------------ | ---- | ------- | --- | -------
|Calendar Year 1999 |      |         |     |        
|First Quarter      |      | $16.75  |     | $12.44 
|Second Quarter     |      | 15.25   |     | 10.50  
|Third Quarter      |      | 13.50   |     | 7.50   
|Fourth Quarter     |      | 9.13    |     | 6.88   
|                   |     
|Calendar Year 2000 |     
|First Quarter      |      | $  8.00 |     | $  5.25
|Second Quarter     |      | 9.75    |     | 5.31   
|Third Quarter      |      | 13.63   |     | 8.31   
|Fourth Quarter     |      | 17.63   |     | 11.56  
|                   |     
|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  

|As of March 25, 2002 there
were approximately 1,500 record holders of our Common Stock. On March 25, 2002
the last reported sale price of the Common Stock on the New York Stock Exchange
was $18.06 per share.


We paid a quarterly
dividend on our Common Stock in the amount of 3.75 cents per share in January
and April 2001 and 5 cents per share in July and October 2001. Effective January
2002, the quarterly dividend rate was increased to 5.5 cents per share.


ITEM 6.
SELECTED FINANCIAL DATA


The following table sets
forth our selected historical consolidated financial data, for the periods and
at the dates indicated. The historical financial data for each of the five years
in the period ended December 31, 2001, and at December 31, 2001, 2000, 1999,
1998 and 1997, are derived from and qualified by reference to the historical
consolidated financial statements that have been audited and reported upon by
Arthur Andersen LLP, independent public accountants. This information should be
read in conjunction with our historical consolidated financial statements and
the notes thereto.



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

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

|                                                   | YEAR ENDED DECEMBER 31, (1)
|-------------------------------------------------- | ---------------------------
|
|INCOME STATEMENT DATA:                             |                            
|Revenues                                           |                            
|Earnings from continuing operations before         |                            
|interest and taxes                                 |                            
|Income from continuing operations before change    |                            
|in accounting principle, extraordinary gain/loss   |                            
|and discontinued operations                        |                            
|                                                   |                            
|Income from continuing operations per share before |                            
|change in accounting principle, extraordinary      |                            
|gain/loss and discontinued operations              |                            
|Basic                                              |                            
|                                                   |                            
|Diluted                                            |                            
|                                                   |                            
|Weighted average shares outstanding:               |                            
|Basic                                              |                            
|Diluted                                            |                            
|Cash dividends declared per common share:          |                            
|                                                   |                            
|                                                   |                            
|
|BALANCE SHEET DATA:                                |                            
|Cash, short-term investments and marketable        |                            
|securities                                         |                            
|Total assets                                       |                            
|Debt and capital lease obligations                 |                            
|Stockholders equity                               |                            

|(1) |  | All
prior year financial information has been adjusted to reflect the operations of Personal
Computer Rentals (PCR) and Microtech Leasing Corporation (Microtech) as discontinued
operations.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | The
2001 income statement data excludes net of tax extraordinary gains of $558 resulting from
the retirement of debt, $833 resulting from the cumulative effect of change in accounting
principle and a loss, net of tax, of $1,909 from discontinued operations.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) |  | The
2000 income statement data excludes net of tax extraordinary gains of $840 resulting from
the retirement of debt, $660 resulting from the cumulative effect of change in accounting
principle, and $1,156 in income from discontinued operations, net of tax.The 2000 results
include contributions from the North American Intermodal division of Transamerica
Leasing, Inc., 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.
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) |  | The
1999 income statement data excludes a net of tax extraordinary gain of $740 resulting
from the retirement of debt, and $946 in income from discontinued operations, net of tax.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(5) |  | The
1998 income statement data excludes income from discontinued operations of $344, net of
tax.
|--- |  | ------------------------------------------------------------------------------------------------

|(6) |  | The
1997 income statement data excludes a net of tax extraordinary loss of $5,428 resulting
from the retirement of debt and $194 in income from discontinued operations, net of tax.
|--- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|11
|--

|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.


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


General


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 income earned under finance leases, under which the
lessee has the right to purchase the equipment at the end of the lease term.


Revenue derived from an
operating lease generally consists of the total lease payment from the customer.
In 1999, 2000, and 2001, revenues derived from operating leases were $173.9
million (92% of revenues), $226.3 million (93% of revenues) and $283.9 million
(93% 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 1999, 2000, and 2001, total payments from direct
finance leases were $68.9 million, $65.0 million, and $63.9 million,
respectively. In 1999, 2000 and 2001, the revenue component of total lease
payments totaled $15.9 million (8% of revenues), $15.9 million (7% of revenues)
and $21.2 million (7% of revenues).


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 which 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 ship their operations from areas of unfavorable
political and/or economic conditions to more promising areas. Substantially all
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 which are
significantly lower than the applicable rates in the United States. See 
 United States Federal Income Tax. Our chassis leasing operations
are conducted primarily through Trac Lease and Interpool. The short-term portion
of our container leasing operations is conducted through our 50%-owned
affiliate, CAI. A portion of our other United States equipment leasing
activities are conducted through Interpool itself.


During the three months
ended September 30, 2001, we initiated a plan to dispose of PCR, a 51%-owned
subsidiary engaged in leasing computers and related equipment, and to
discontinue the operations of Microtech, a 75.5%-owned subsidiary, also engaged
in computer leasing. As a result, PCR and Microtech have been classified as
discontinued operations in the consolidated financial statements. On December
31, 2001, we completed the sale of our 51% ownership stake in PCR to an
investment group comprised of the management of PCR.


12
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|Results of
Operations


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


Revenues.
Our revenues increased to $305.1 million for the year ended December 31, 2001,
from $242.3 million in the year ended December 31, 2000, an increase of $62.8
million or 26%. The increase was primarily attributable to our October 2000
acquisition of the North American Intermodal division of Transamerica Leasing
Inc. (TA) which resulted in $58.2 million of additional leasing revenues
generated from the assets acquired which were not included as assets held for
sale. In addition, finance lease revenues increased $5.3 million, which includes
the favorable impact of an adjustment to income earned on finance lease
receivables of $1.1 million related to prior periods, partially offset by
decreased operating lease revenues of $.7 million. Our revenue includes $6.8
million due from a customer in default which is recoverable from insurance.
Utilization rates of the container and chassis operating lease fleet at December
31, 2001 were 96% and 92%, respectively, and at December 31, 2000 were 99% and
97%, respectively.


Lease Operating and
Administrative Expenses. Our lease operating and administrative
expenses increased to $90.0 million for the year ended December 31, 2001 from
$58.7 million in the year ended December 31, 2000, an increase of $31.3 million
or 53%. The increase was primarily due to our October 2000 acquisition of assets
from TA which resulted in $21.1 million of additional lease operating and
administrative expenses. In addition we had expanded operations generating
increased equipment rental of $7.7 million, minority interest expense of 1.6
million, storage expense of $1.3 million and employee benefits expense of $.6
million, partially offset by reduced insurance expense of $.3 million and legal
fees of $.3 million. Maintenance and repairs expense decreased $.7 million which
resulted from additional repairs on our operating lease equipment of $1.6
million, offset by $2.3 million of billable repairs to a customer in default
which is recoverable from insurance.


Provision for
Doubtful Accounts. The provision for doubtful accounts increased
to $2.3 million for the year ended December 31, 2001 from $2.2 million for the
year ended December 31, 2000, an increase of $.1 million or 5%.


Depreciation and
Amortization of Leasing Equipment. Our depreciation and
amortization expenses increased to $74.3 million for the year ended December 31,
2001 from $60.8 million for the year ended December 31, 2000, an increase of
$13.5 million or 22%. The increase was primarily a result of the October 2000
acquisition of assets from TA, partially offset by reduced depreciation expense
of $3.9 million as a result of our sale of rail trailers and domestic containers
to TIP in March 2001 as detailed in Note 7 to the consolidated financial
statements. Additionally, effective October 1, 2000, we revised our estimate of
the depreciation life of chassis from 15 years to 17.5 years. The effect of this
change was to decrease depreciation expense by $1.0 million for the three months
ended December 31, 2000. For the year ended December 31, 2001, the effect of
this change was to decrease depreciation expense by $3.7 million.


Other
(Income)/Expense, Net. The change in other (income)/expense, net
of $2.0 million was primarily due to a gain of $1.8 million on the sale of the
rail trailers and domestic containers previously owned by us to TIP Intermodal
Services (TIP), a GE Capital Company. These rail trailers and domestic
containers were not acquired from TA as part of the October 2000 acquisition.
Additionally, our net loss on the sale of leasing equipment increased $.2
million during the year ended December 31, 2001, partially offset by an increase
in our income from unconsolidated subsidiaries of $.4 million during the year
ended December 31, 2001. During the year ended December 31, 2001, our net loss
on the sale of leasing equipment includes losses on sales of equipment recovered
from a customer in default of $1.4 million.


Interest Expense, Net. Our net interest expense increased to
$85.6 million in the year ended December 31, 2001 from $68.1 million in the year
ended December 31, 2000, an increase of $17.5 million or 26%. The increase in
net interest expense was due to increased interest expense of $10.4 million, as
well as decreased investment income of $7.1 million. The increase in interest
expense was primarily due to increased borrowings to acquire assets from TA and
fund capital expenditures, resulting in incremental interest expense of $11.0
million, partially offset by reduced interest rates resulting in reduced
interest expense of $.6 million.


Provision for Income
Taxes. Our provision for income taxes decreased to $6.7 million
from $8.2 million primarily due to a lower effective tax rate resulting from
greater income contribution from the international container division, which is
subject to a lower statutory tax rate than our domestic intermodal division.


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

|Income from
Continuing Operations Before Cumulative Effect of Change in Accounting Principle
and Extraordinary Gain. As a result of the factors described
above, our income from continuing operations before cumulative effect of change
in accounting principle and extraordinary gain was $43.0 million in the year
ended December 31, 2001 versus $41.8 million in the year ended December 31,
2000.


(Loss) Gain from
Discontinued Operations. During the three months ended September
30, 2001, we initiated a plan to dispose of PCR, a 51%-owned subsidiary, and to
discontinue the operations of Microtech, a 75.5%-owned subsidiary and liquidate
its lease portfolio. As a result of this decision, PCR and Microtech have been
classified as discontinued operations in the consolidated financial statements.
On December 31, 2001, we completed the sale of our 51% ownership stake of PCR to
an investment group comprised of the management of PCR. Our loss from
discontinued operations was $1.9 million for the year ended December 31, 2001,
as compared to a gain from discontinued operations of $1.2 million for the year
ended December 31, 2000. The increased loss is primarily due to $1.7 million of
losses incurred by PCR during the year ended December 31, 2001, as compared to
$.7 million of income during the year ended December 31, 2000. In addition,
Microtech incurred $.2 million of losses during the year ended December 31,
2001, as compared to $.5 million of income during the year ended December 31,
2000. The increased losses are primarily the result of a weaker economic
environment.


Cumulative Effect of
Change in Accounting Principle. We recorded the cumulative effect
of a change in accounting principle of $.8 million in the three months ended
March 31, 2001. This represents the cumulative effect through December 31, 2000
regarding our accounting for swap transactions not accounted for as hedges in
accordance with the Financial Accounting Standards Board issued statement of
Financial Accounting Standards No. 133,Accounting for Derivative Instruments
and Hedging Activities. The adoption of Statement 133 on January 1, 2001
increased liabilities by approximately $9.0 million, with offsetting amounts
recorded as decreases to deferred tax liabilities of $2.4 million and
accumulated other comprehensive income of $7.4 million.


We recorded the cumulative
effect of a change in accounting principle of $.7 million in the three months
ended March 31, 2000. This represents a change in our accounting for its
maintenance and repairs expense from an accrual to cash basis.


Extraordinary
Gain. We recorded an extraordinary gain on the retirement of debt
of $.6 million in the year ended December 31, 2001 and $.8 million in the year
ended December 31, 2000.


Net Income. As a result of the factors described above, our net income
decreased to $42.5 million in the year ended December 31, 2001 from $44.5
million in the year ended December 31, 2000.


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


Revenues. Our revenues increased to $242.3 million for the year ended
December 31, 2000, from $189.8 million in the year ended December 31, 1999, an
increase of $52.5 million or 28%. The increase was primarily attributable to our
October 2000 acquisition of the North American Intermodal division of TA which
resulted in $20.8 million of additional leasing revenues generated from the
assets acquired which were not included as assets held for sale and increased
operating lease revenues of $31.7 million primarily generated by an expanded
container and chassis fleet. Utilization rates of the container and chassis
operating lease fleet at December 31, 2000 were 99% and 97%, respectively, and
at December 31, 1999 were 98% and 95%, respectively.


Lease Operating and
Administrative Expenses. Our lease operating and administrative
expenses increased to $58.7 million for the year ended December 31, 2000 from
$48.3 million in the year ended December 31, 1999, an increase of $10.4 million
or 22%. The increase was primarily due to our October 2000 acquisition of assets
from TA which resulted in $6.4 million of additional lease operating and
administrative expenses. In addition we had higher operating and administrative
expenses resulting from expanded operations generating increased equipment
rental of $2.7 million, licensing expense of $1.1 million, insurance expense of
$1.0 million, consulting expense of $.7 million and salary expense of $.2
million, partially offset by reduced maintenance and repairs expense of $1.7
million.


Provision for
Doubtful Accounts. Our provision for doubtful accounts decreased
to $2.2 million for the year ended December 31, 2000 from $6.9 million for the
year ended December 31, 1999, a decrease of $4.7 million. The decrease was
primarily due to additional bad debt reserves for specific losses of $4.7
million incurred during 1999.


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

|Depreciation and
Amortization of Leasing Equipment. Our depreciation and
amortization expenses increased to $60.8 million for the year ended December 31,
2000 from $55.6 million for the year ended December 31, 1999, an increase of
$5.2 million or 9%. The increase was primarily a result of the October 2000
acquisition of assets from TA, partially offset by a $6.8 million write down
during 1999 for certain container equipment for which the residual value was
impaired. A specific manufacturer provided us with defective containers subject
to a warranty claim, for which the expenses are not recoverable due to the
bankruptcy of the manufacture. We isolated the unit numbers of the defective
containers and analyzed the proceeds received upon the sale of these defective
containers. We then reduced the book value of these defective containers to
scrap value in order to approximate their net realizable value. Additionally,
effective October 1, 2000, we revised our estimate of the depreciation life of
chassis from 15 years to 17.5 years. The effect of this change was to decrease
depreciation expense by $1.0 million for the three months ended December 31,
2000.


Other
(Income)/Expense, Net. The change in other (income)/expense, net
of $.3 million was due to an increase in our income from unconsolidated
subsidiaries of $.4 million. Additionally our net loss on sale of leasing
equipment was $1.5 million in the year ended December 31, 2000 as compared to a
loss of $1.4 million in 1999.


Interest Expense,
Net. Our net interest expense increased to $68.1 million in the
year ended December 31, 2000 from $52.4 million in the year ended December 31,
1999, an increase of $15.7 million or 30%. The increase in net interest expense
was due to increased interest expense of $20.2 million, partially offset by
increased investment income of $4.5 million. The increase in interest expense
was primarily due to increased borrowings to fund capital expenditures resulting
in incremental interest expense of $19.0 million, as well as increased interest
rates resulting in incremental interest expense of $1.2 million.


Provision for Income
Taxes. Our provision for income taxes increased to $8.2 million
from $2.8 million primarily due to higher taxable income, as well as a higher
effective tax rate resulting from greater income contribution from the domestic
intermodal division, which is subject to a higher statutory tax rate than our
international container division.


Income from
Continuing Operations Before Cumulative Effect of Change in Accounting Principle
and Extraordinary Gain. As a result of the factors described
above, our income from continuing operations before cumulative effect of change
in accounting principle and extraordinary gain was $41.8 million in the year
ended December 30, 2000 versus $20.9 million in the year ended December 31,
1999.


(Loss) Gain from
Discontinued Operations. Our gain from discontinued operations
was $1.2 million for the year ended December 31, 2000, as compared to a gain
from discontinued operations of $.9 million for the year ended December 31,
1999. The increased gain is primarily due to $.7 million of income earned by PCR
during the year ended December 31, 2000, as compared to $.3 million of income
during the year ended December 31, 1999. In addition, Microtech earned $.5
million of income during the year ended December 31, 2000, as compared to $.7
million of income during the year ended December 31, 1999.


Cumulative Effect of
Change in Accounting Principle. We recorded the cumulative effect
of a change in accounting principle of $.7 million in the three months ended
March 31, 2000. This represents a change in our accounting for its
maintenanceand repairs expense from an accrual to cash
basis.


Extraordinary Gain. We recorded an extraordinary gain on the retirement of debt of
$.8 million in the year ended December 31, 2000 and $.7 million in the year
ended December 31, 1999.


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


Liquidity and
Capital Resources


We use funds from various
sources to finance the acquisition of equipment for lease to customers. The
primary funding sources are 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 generate cash from
the sale of equipment being retired from our fleet. In general, we seek to meet
debt service requirements from the leasing revenue generated by our equipment.
Since 1990, we have been steadily increasing our fleet of chassis and containers and
adding to our portfolio of finance leases. We generated cash flow from
operations of $111.5 million, $115.6 million, and $72.8 million in 2001, 2000,
and 1999, respectively. In 2001, 2000 and 1999 net cash (used for) provided by
financing activities was $(218.9) million, $621.9 million and $244.0 million,
respectively. We have purchased equipment costing $280.8 million in 2001, $293.5
million in 2000, and $296.3 million in 1999.


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

|The following table sets
forth certain historical cash flow information for the three years ended
December 31, 2001.
|--------------------------------------------------------------------------------------------------------------------

|                                                      | Year Ended December 31,
|----------------------------------------------------- | -----------------------
|
|                                                      | (Dollars in millions)  
|Net cash provided by operating activities             |                        
|Proceeds from disposition of leasing equipment        |                        
|Acquisition of leasing equipment                      |                        
|Investment in direct financing leases                 |                        
|Net collections on direct finance leases              |                        
|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          |                        

|In March 1999, we
established a container securitization facility of $250.0 million. This program
provides us with a lower cost of capital for our finance lease business and
access to an additional source of funding. On March 31, 1999, we securitized
approximately $235.5 million of lease receivables through utilization of $190.0
million of this facility. This transaction was accounted for as a sale and we
recorded a pre-tax gain of $7.9 million which is included in revenues; other
costs and associated tax effect brought the net gain to $5.5 million. A portion
of the gain has been deferred to record an estimate of the losses under recourse
provisions for the lease receivables securitized. Included in other investment
securities at December 31, 2001, is approximately $16.0 million of retained
interests in the securitized lease receivables. In July 2001, the container
securitization facility, which was originally established as an off-balance
sheet source of financing, was amended allowing additional financings to be
accounted for as on-balance sheet secured debt financing. At December 31, 2001,
$108.6 million of the container securitization facility was utilized, of which
$64.5 million relates to off-balance sheet financing, while $44.1 million
relates to on-balance sheet financing and is included in debt and capital lease
obligations in the consolidated balance sheets.


In October 2000, we
established a secured financing facility in the amount of $300.0 million, to
fund the TA transaction. At December 31, 2001, $97.7 million of this facility
was outstanding with an interest rate of 3.94%. The principal balance is payable
in quarterly installments of $.5 million, with a balloon payment in October
2002.


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. This facility provides us an additional source of
funding and is accounted for as on-balance sheet secured debt financing.


We have a $215.0 million
revolving credit facility with a group of commercial banks; on December 31,
2001, $215.0 million was outstanding, with an interest rate of 6.21%, including
the effect of interest rate swap contracts in place as of December 31, 2001. In
July 2000, this facility was renewed and amended with the term extended to July
31, 2005. The credit limit remains at $215.0 million through July 31, 2003;
thereafter the credit limit declines to $193.5 million through July 31, 2004 and
$172.0 million through July 31, 2005. In addition, as of December 31, 2001, we
had an available line of credit of $10.0 million under one facility, of which
$3.2 million was outstanding. The interest rate under this facility as of
December 31, 2001 was 4.3%. Subsequent to December 31, 2001 we have continued to
incur and repay debt obligations in connection with financing our equipment
leasing activities. 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, 2001, we were in compliance with
these requirements.


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

|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 the 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 an extraordinary gain of $.7 million net of tax expense of $.5
million. During the first quarter of 2000, we retired $8.2 million of the 6-5/8%
Notes and recognized an extraordinary gain of $.5 million net of tax expense of
$.3 million. During 2001, we retired $27.2 million of the 6-5/8% Notes and
recognized an extraordinary gain of $.4 million net of tax expense of $.3
million. As of December 31, 2001, $47.6 million principal amount of the 6-5/8%
Notes remains outstanding.


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 an extraordinary gain of $.4 million
net of tax expense of $.2 million. During 2001, we retired $2.1 million of the
7.20% Notes and recognized an extraordinary gain of $.1 million. As of December
31, 2001, $72.9 million and $147.0 million principal amount of the 7.20% and
7.35% Notes, respectively, remains outstanding.


In April 1998, we acquired
a 50% interest in CAI, a container leasing company which primarily engages in
short term master leases. We also advanced CAI subordinated debt. Our investment
in and advances to CAI totaled approximately $51.2 million at December 31, 2001.


In October 2000, we
completed the acquisition of the North American Intermodal Division of
Transamerica Leasing, Inc., a subsidiary of Transamerica Finance Corporation and
AEGON N.V. Under the terms of the agreement, 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 $672.0 million, with the acquisition being financed
through a combination of cash and proceeds from committed secured financing
facilities equal to approximately $365.0 million. In the acquisition, we
acquired approximately 70,000 chassis, 23,000 rail trailers and 18,000 domestic
containers. In March 2001, we sold 40,000 rail trailers and domestic containers
previously acquired in the Transamerica transaction along with 10,000 of our
existing rail trailers and domestic containers to GE Capital for approximately
$345.0 million.


In May 1999, our Microtech
subsidiary acquired a 51% interest in Personal Computer Rentals, Inc. (PCR), a
nationwide lessor of computers and related equipment. We also provided financing
to PCR. During the three months ended September 30, 2001, we initiated a plan to
dispose of PCR, a 51%-owned subsidiary, and to discontinue the operations of
Microtech, a 75.5%-owned subsidiary and liquidate its lease portfolio. As a
result of this decision, PCR and Microtech have been classified as discontinued
operations in the consolidated financial statements. On December 31, 2001, we
completed the sale of our 51% ownership stake of PCR to an investment group
comprised of the management of PCR.


During the three months
ended June 30, 2001, we initiated a bankruptcy claim against a customer and
sought to collect receivables and to recover equipment values through its
insurance policies. We have demanded the return of approximately $48.6 million
of equipment, including $8.5 million of direct finance leases which were
reclassified to leasing equipment. The total net book value of equipment leased
to this customer as of December 31, 2001 was approximately $10.7 million. We
anticipate that approximately $8.5 million of this equipment will not be
recovered from the customer. In addition, the outstanding receivables from this
customer as of December 31, 2001 totaled approximately $19.7 million of which
$18.8 million is covered by insurance, with the balance reserved for in the
allowance for doubtful accounts.


At this time, we estimate
no impairment upon the liquidation and/or re-lease of these assets after
considering anticipated insurance proceeds. The maximum insurance coverage
related to this claim is $35.0 million. The overall recovery of the asset values
has been evaluated taking into consideration the equipment book value, the cost
to recover and re-lease the equipment, and the total outstanding receivables, as
well as the likelihood to collect through the recovery and sale of the equipment
or the stipulated equipment values within the insurance policy. We recorded
revenue from these leases through August 20, 2001 at which time, revenue
recognition was discontinued, as lease payments through August 20, 2001 were
covered by the insurance policies.


We will continue to assess
the overall recovery of the asset values and adjust the assumptions used in
evaluating the total insurance claim with respect to this customers
bankruptcy. As additional information becomes available, reserves for the
impairment of the asset values may be necessary based upon changes in economic
conditions and the assumptions used in evaluating the total insurance claim.



17
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------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|As of December 31, 2001,
commitments for capital expenditures totaled approximately $70.6 million. We
believe that 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 will be sufficient to meet our working capital needs,
capital expenditures and required debt repayments for the next twelve months.
Required debt repayments are $179.7 million for the next twelve months. In
addition, we expect to rely in substantial part on long-term financing for any
purchase of equipment or strategic acquisitions to expand our business in the
future. We cannot assure that additional long-term financing will be available
for these purposes on acceptable terms or at all. In addition, from time to
time, we explore new sources of capital both at the parent and subsidiary
levels.


As previously announced, we
have authorized the repurchase up to 1,000,000 shares of our common stock. The
shares will be purchased from time to time through open market purchases or
privately negotiated transactions. During the fourth quarter of 2001, we
purchased 58,100 shares for an aggregate purchase price of $.9 million. A total
of 158,500 shares were purchased by us during the fourth quarter of 1999, for an
aggregate purchase price of $1.2 million.


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


We previously announced
that we were evaluating a possible restructuring that would involve a
distribution to our stockholders of shares in a newly-formed company that would
operate our short-term chassis leasing business. We are not actively pursuing
such a restructuring at the present time.


In 2001, we entered into an
interest rate swap contract with notional amounts totaling $51.5 million. These
amounts relate to on and off balance sheet financing, of which the notional
amounts are $43.3 million and $8.2 million, respectively. The terms of the
interest rate swap contract are for six years. The interest rate swap contracts
convert variable rate debt into fixed rate debt. The maturity of the contract
coincides with the maturity of the underlying debt instruments hedged. At
December 31, 2001, the on and off balance sheet notional amounts are
approximately $39.6 million and $7.4 million, respectively.


In 2000, we entered into
interest rate swap contracts with notional amounts totaling $334.9 million. The
terms of the interest rate swap contracts are for two and seven years. The
interest rate swap contracts convert variable rate debt into fixed rate debt.
The maturity of these contracts coincides with the maturity of the underlying
debt instruments hedged. At December 31, 2001, the notional amount was
approximately $323.3 million.


In 1998, we entered into
interest rate swap contracts with notional amounts totaling $79.7 million. The
terms of the interest rate swap contracts are for three, five and seven years.
The interest rate swap contracts convert variable rate debt into fixed rate
debt. The maturity of these contracts coincides with the maturity of the
underlying debt instruments hedged. In 2000, a portion of the debt instrument
hedged was retired and the related portion of the swap contract was closed. At
December 31, 2001, the notional amount was approximately $34.2 million.


Prior to the adoption of
Statement 133, interest differentials paid or received under these contracts are
recognized as yield adjustments to the effective yield of the underlying debt
instruments hedged. Interest rate swap contracts would only be recognized at
fair value if the hedged relationship is terminated. Gains or losses accumulated
prior to termination of the relationship would be amortized as a yield
adjustment over the shorter of the remaining life of the contract, or the
remaining period to maturity of the underlying debt instrument hedged. If the
contract remained outstanding after termination of the hedged relationship,
subsequent changes in market value of the contract would be recognized in
earnings. We do not use leverage swaps and do not use leverage in any of our
investment activities that would put principal capital at risk.


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.


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

|Based upon current
management projections, we will be considered a personal holding company for
federal income tax purposes for 2001 (and possibly in subsequent years). If we
or any of our subsidiaries are classified as a personal holding company for
federal income tax purposes, in addition to our regular federal income tax
liability, our subsidiarys undistributed personal holding company income
(generally taxable income with certain adjustments, including a deduction for
federal income taxes and dividends paid) would be subject to a personal holding
company tax at the highest marginal federal income tax rate applicable to
unmarried individuals. Management anticipates that for 2001 our current level of
dividends will be sufficient to avoid having any undistributed personal holding
company income, and thus does not anticipate that there will be any personal
holding company tax imposed for 2001. 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,
2001 such suspended passive losses totaled approximately $286.3 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 a passive foreign investment company, or if it were to have
an increase in earnings invested in United States property.


Subpart F income includes
foreign personal holding company income, such as dividends, interest and rents.
Although a substantial portion of Interpool Limiteds income consists of
rents from container leasing activities, 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, 2001
unremitted earnings of this subsidiary were approximately $236.6 million. The
deferred U.S. Federal Income taxes related to the unremitted earnings of this
subsidiary would be approximately $82.8 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.


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

|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.


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. Recently,
Itel Containers International Corp. (Itel), a container leasing
company, challenged an attempt by the State of Tennessee to collect sales tax on
Itels proceeds from the leasing of containers delivered in Tennessee. In a
ruling by the United States Supreme Court in February 1993, Itels position
was rejected and the Court upheld the right of Tennessee to impose sales tax on
leasing revenues from containers delivered in Tennessee. 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.


Recent
Accounting Pronouncements


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


On January 1, 2001, we
adopted Statement 133. We apply Statement 133 to only those hybrid instruments
that were issued, acquired or substantively modified after December 31, 1998.
Statement 133, in part, allows special hedge accounting for fair value
and cash flow hedges. Statement 133 provides that the gain or loss on a
derivative instrument designated and qualifying as a fair valuehedging
instrument as well as the offsetting loss or gain on the hedged item
attributable to the hedged risk be recognized currently in earnings in the same
accounting period. Statement 133 provides that the effective portion of the gain
or loss on a derivative instrument designated and qualifying as a cash
flow hedging instrument be reported as a component of other comprehensive
income and be reclassified into earnings in the same period or periods during
which the hedged forecasted transaction affects earnings. (The remaining gain or
loss on the derivative instrument, if any, must be recognized currently in
earnings.)


20
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|As of December 31, 2000, we
had entered into 13 interest rate swap agreements with various financial
institutions. The aggregate notional balance of the swaps was $389.5 million as
of December 31, 2000. We use these agreements 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. Under previous
generally accepted accounting principals, as interest rates change we accrued
the interest differential payable or receivable by us on our interest rate swaps
and we recognized this accrued interest differential over the life of the swap
agreement. In contrast, Statement 133 requires that changes in the fair value of
the swap agreements which are designated as effective cash flow hedges be
reported as a component of other comprehensive income and changes in the fair
value of the swap agreements that do not qualify for hedge accounting to be
reported in earnings. We have determined that of the 13 interest rate swap
agreements held, 10 qualify under Statement 133 as effective cash flow hedges
with no ineffectiveness, while the remaining 3 interest rate swap agreements
intended as cash flow hedges do not quality for hedge accounting treatment. Upon
the adoption of Statement 133 on January 1, 2001, we recorded the swap contracts
at their fair value resulting in an increase in liabilities of approximately
$9.0 million, with offsetting amounts recorded as decreases to deferred tax
liabilities of $2.4 million and accumulated other comprehensive income of $7.4
million and an increase to earnings (net of tax) of $0.8 million.


On June 29, 2001, the Financial
Accounting Standards Board approved Statement of Financial Accounting Standards No. 142,
Goodwill and Other Intangible Assets.


Statement 142 will apply to
all acquired intangible assets whether acquired singly, as part of a group, or
in a business combination. The statement will supersede Accounting Principals
Board, or APB, Opinion No. 17, Intangible Assets, and will carry
forward provisions in APB Opinion No 17 related to internally developed
intangible assets. Adoption of Statement 142 will result in ceasing amortization
of goodwill. All of the provisions of the statement should be applied in fiscal
years beginning after December 15, 2001 to all goodwill and other intangible
assets recognized in an entitys statement of financial position at that
date, regardless of when those assets were initially recognized. We are
currently evaluating our goodwill as prescribed by Statement 142 and do not
expect the adoption of Statement 142 to result in an adjustment to recorded
goodwill. Total goodwill recorded by the Company was approximately $9.7 million
related to certain investments accounted for under the equity method of
accounting.


In August 2001, the
Financial Accounting Standards Board (FASB) approved its proposed Statement of
Financial Accounting Standards No. 144, Accounting for the Impairment of
Disposal of Long Lived Assets. Statement 144 addresses financial accounting
and reporting for the impairment or disposal of long-lived assets. This
Statement supersedes FASB Statement No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, and the
accounting and reporting provisions of APB Opinion 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, for the disposal of a segment of a business (as
previously defined in that Opinion). This Statement also amends ARB No. 51,
Consolidated Financial Statements, to eliminate the exception to
consolidation for a subsidiary for which control is likely to be temporary. All
the provisions of the statement should be applied to fiscal years beginning
after December 15, 2001. We are currently evaluating the carrying value of our
long lived assets as prescribed by Statement 144 and do not expect that the
adoption of this statement in the first quarter of 2002 to have a material
effect on our consolidated financial statements.



21
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|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 its 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 2001, a 10% change in
interest rates would result in a $1.3 million change in pretax earnings.


For further information
regarding our floating and fixed rate debt, reference is made to Note 4 to the
2001 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,
and operational history.


We seek to reduce credit
risk by maintaining insurance coverage against defaults and equipment losses.
Although there can be no assurance that such coverage will be available in the
future, during 2001 we maintained contingent physical damage,
recovery/repatriation and loss of revenue insurance, which provides coverage in
the event of a customers default. The policy covered the cost of
recovering our equipment from the customer, including repositioning costs, the
cost of repairing the equipment and the value of equipment which cannot be
located or is uneconomical to recover. It also covered a portion of the lease
revenues we may lose as a result of the customers default (i.e., 180 days
of lease payments following default). We are currently negotiating the renewal
of our insurance coverage which terminated on January 31, 2002 and expect
that premium rates and deductibles could 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.



22
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


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

|                                                                                                  | PageNo.
|------------------------------------------------------------------------------------------------- | -------
|INTERPOOL, INC.                                                                                   |        
|                                                                                                 
|Report of Independent Public Accountants                                                          |        
|                                                                                                 
|Consolidated Balance Sheets--At December 31, 2001 and 2000                                        |        
|                                                                                                 
|Consolidated Statements of Income For the Years Ended December 31, 2001, 2000 and 1999            |        
|                                                                                                 
|Consolidated Statements of Changes in Stockholders Equity For the Years Ended December 31, 2001, |        
|2000 and 1999                                                                                     |        
|                                                                                                 
|Consolidated Statements of Cash Flows For the Years Ended December 31, 2001, 2000 and 1999        |        
|                                                                                                 
|Notes to Consolidated Financial Statements                                                        |        

|23
|--

|REPORT OF
INDEPENDENT PUBLIC ACCOUNTANTS


To the Stockholders of Interpool,
Inc.:


We have audited the
accompanying consolidated balance sheets of Interpool, Inc. (a Delaware
corporation) and subsidiaries as of December 31, 2001 and 2000, and the related
consolidated statements of income, changes in stockholders equity and cash
flows for each of the three years in the period ended December 31, 2001. These
financial statements are the responsibility of the Companys management.
Our responsibility is to express an opinion on these financial statements based
on our audits.


We conducted our audits in
accordance with auditing standards generally accepted in the United States 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
financial statements referred to above present fairly, in all material respects,
the financial position of Interpool, Inc. and subsidiaries as of December 31,
2001 and 2000, and the results of their operations and their cash flows for each
of the three years in the period ended December 31, 2001 in conformity with
accounting principles generally accepted in the United States of America.


As explained in Note 1 to
the consolidated financial statements, effective January 1, 2001, the Company
changed its method of accounting for derivative instruments.
Arthur Andersen LLP

New York, New YorkFebruary 26, 2002



24
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|INTERPOOL, INC. AND
SUBSIDIARIESCONSOLIDATED BALANCE SHEETSDECEMBER 31, 2001 AND 2000


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

|                                                                              | 2001 |               | 2000 |             
|----------------------------------------------------------------------------- | ---- | ------------- | ---- | ------------
|ASSETS                                                                        |      |               |      |             
|                                                                             
|CASH AND SHORT-TERM INVESTMENTS                                               |      | $    102,189  |      | $    155,553
|MARKETABLE SECURITIES, at fair value                                          |      | 638           |      | 136         
|ACCOUNTS AND NOTES RECEIVABLE, less allowance of $5,862 and                   |     
|$14,271, respectively                                                         |      | 64,891        |      | 63,470      
|ASSETS HELD FOR SALE                                                          |      |              |      | 348,389     
|NET INVESTMENT IN DIRECT FINANCING LEASES                                     |      | 229,239       |      | 151,386     
|OTHER RECEIVABLES, net, including amounts from related parties of             |     
|$-0- and $13,433, respectively                                                |      | 43,434        |      | 53,354      
|LEASING EQUIPMENT, net of accumulated depreciation and amortization of        |     
|$322,702 and $275,405, respectively                                           |      | 1,372,326     |      | 1,254,935   
|OTHER INVESTMENT SECURITIES, at fair value                                    |      | 15,970        |      | 30,454      
|OTHER ASSETS                                                                  |      | 79,078        |      | 99,111      
|ASSETS RELATED TO DISCONTINUED OPERATIONS                                     |      | 10,020        |      | 38,043      
|                                                                              |      |               |      |             
|TOTAL ASSETS                                                                  |      | $ 1,917,785   |      | $ 2,194,831 
|                                                                              |      |               |      |             
|LIABILITIES AND STOCKHOLDERS EQUITY                                          |     
|ACCOUNTS PAYABLE AND ACCRUED EXPENSES                                         |      | $      80,683 |      | $    122,673
|INCOME TAXES:                                                                 |     
|Current                                                                       |      | 353           |      | 1,075       
|Deferred                                                                      |      | 29,890        |      | 28,892      
|                                                                              |      |               |      |             
|                                                                              |      | 30,243        |      | 29,967      
|                                                                              |      |               |      |             
|DEFERRED INCOME                                                               |      | 766           |      | 911         
|DEBT AND CAPITAL LEASE OBLIGATIONS                                            |     
|Due within one year                                                           |      | 179,664       |      | 199,487     
|Due after one year                                                            |      | 1,155,646     |      | 1,396,788   
|                                                                              |      |               |      |             
|                                                                              |      | 1,335,310     |      | 1,596,275   
|                                                                              |      |               |      |             
|                                                                             
|LIABILITIES RELATED TO DISCONTINUED OPERATIONS                                |      | 6,072         |      | 25,823      
|                                                                             
|COMPANY-OBLIGATED MANDATORILY REDEEMABLE PREFERRED                            |     
|SECURITIES IN SUBSIDIARY GRANTOR TRUSTS (holding solely junior                |     
|Subordinated Deferrable interest debentures of the Company) (75,000 shares    |     
|9-7/8% Capital Securities outstanding, liquidation preference $75,000)        |      | 75,000        |      | 75,000      
|                                                                             
|MINORITY INTEREST IN EQUITY OF SUBSIDIARIES                                   |      | 27,247        |      | 1,951       
|                                                                             
|STOCKHOLDERS EQUITY:                                                         |     
|Preferred stock, par value $.001 per share; 1,000,000 authorized, none issued |      |              |      |            
|Common stock, par value $.001 per share; 100,000,000 shares authorized,       |     
|27,579,952 issued at December 31, 2001 and 2000                               |      | 28            |      | 28          
|Additional paid-in capital                                                    |      | 124,184       |      | 124,184     
|Treasury stock, at cost, 216,600 and 158,500 shares at December 31, 2001      |      | (2,099        | )    | (1,170      
|and 2000, respectively                                                        |     
|Retained earnings                                                             |      | 255,154       |      | 217,955     
|Accumulated other comprehensive income (loss)                                 |      | (14,803       | )    | 1,234       
|                                                                              |      |               |      |             
|Total stockholders equity                                                    |      | 362,464       |      | 342,231     
|                                                                              |      |               |      |             
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                                    |      | $ 1,917,785   |      | $ 2,194,831 
|                                                                              |      |               |      |             

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


25
|--------------------------------------------------------------------------------------------------------------

|INTERPOOL, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOMEFOR THE YEARS ENDED DECEMBER 31, 2001,
2000 AND 1999(dollars in thousands, except share and per share amounts)
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                                            | 2001 |          | 2000 |          | 1999 |         
|------------------------------------------------------------------------------------------- | ---- | -------- | ---- | -------- | ---- | --------
|REVENUES                                                                                    |      | $305,133 |      | $242,255 |      | $189,788
|                                                                                            |      |          |      |          |      |         
|COST AND EXPENSES:                                                                          |     
|Lease operating expenses                                                                    |      | 63,870   |      | 36,865   |      | 28,391  
|Administrative expenses                                                                     |      | 26,170   |      | 21,862   |      | 19,910  
|Provision for doubtful accounts                                                             |      | 2,302    |      | 2,192    |      | 6,925   
|Market value adjustment for derivative instruments                                          |      | 2,647    |      |         |      |        
|Depreciation and amortization of leasing equipment                                          |      | 74,311   |      | 60,767   |      | 55,635  
|Other expense, net                                                                          |      | 466      |      | 2,509    |      | 2,822   
|Interest expense                                                                            |      | 95,044   |      | 84,596   |      | 64,429  
|Interest income                                                                             |      | (9,400   | )    | (16,511  | )    | (12,049 
|                                                                                            |      |          |      |          |      |         
|                                                                                            |      | 255,410  |      | 192,280  |      | 166,063 
|                                                                                            |      |          |      |          |      |         
|Income from continuing operations before provision for income taxes,                        |     
|results from discontinued operations, cumulative effect of change in                        |     
|accounting principle and extraordinary gain                                                 |      | 49,723   |      | 49,975   |      | 23,725  
|PROVISION FOR INCOME TAXES                                                                  |      | 6,725    |      | 8,175    |      | 2,800   
|                                                                                            |      |          |      |          |      |         
|Income from continuing operations before results from discontinued                          |     
|operations, cumulative effect of change in accounting principle and                         |     
|extraordinary gain                                                                          |      | 42,998   |      | 41,800   |      | 20,925  
|(Loss) income from discontinued operations, net of applicable taxes of   $29, $450 and $600 |      | (1,909   | )    | 1,156    |      | 946     
|Cumulative effect of change in accounting principle, net of applicable                      |     
|taxes of $44 and $440                                                                       |      | 833      |      | 660      |      |        
|Extraordinary gain of debt retirement, net of applicable taxes of                           |     
|$372, $560 and $494                                                                         |      | 558      |      | 840      |      | 740     
|                                                                                            |      |          |      |          |      |         
|NET INCOME                                                                                  |      | $42,480  |      | $44,456  |      | $22,611 
|                                                                                            |      |          |      |          |      |         
|INCOME PER SHARE FROM CONTINUING OPERATIONS                                                 |     
|BEFORE RESULTS FROM DISCONTINUED OPERATIONS,                                                |     
|CUMMULATIVE EFFECT OF CHANGE IN ACCOUNTING                                                  |     
|PRINCIPLE AND EXTRAORDINARY GAIN:                                                           |     
|Basic                                                                                       |      | $1.57    |      | $1.52    |      | $0.76   
|                                                                                            |      |          |      |          |      |         
|Diluted                                                                                     |      | $1.48    |      | $1.50    |      | $0.74   
|                                                                                            |      |          |      |          |      |         
|(LOSS) INCOME FROM DISCONTINUED OPERATIONS:                                                 |     
|Basic                                                                                       |      | ($0.07   | )    | $0.04    |      | $0.03   
|                                                                                            |      |          |      |          |      |         
|Diluted                                                                                     |      | ($0.06   | )    | $0.04    |      | $0.03   
|                                                                                            |      |          |      |          |      |         
|CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE:                                        |     
|Basic                                                                                       |      | $0.03    |      | $0.02    |      | NA      
|                                                                                            |      |          |      |          |     
|Diluted                                                                                     |      | $0.03    |      | $0.02    |      | NA      
|                                                                                            |      |          |      |          |     
|EXTRAORDINARY GAIN:                                                                         |     
|Basic                                                                                       |      | $0.02    |      | $0.03    |      | $0.03   
|                                                                                            |      |          |      |          |      |         
|Diluted                                                                                     |      | $0.02    |      | $0.03    |      | $0.03   
|                                                                                            |      |          |      |          |      |         
|NET INCOME PER SHARE:                                                                       |     
|Basic                                                                                       |      | $1.55    |      | $1.62    |      | $0.82   
|                                                                                            |      |          |      |          |      |         
|Diluted                                                                                     |      | $1.47    |      | $1.60    |      | $0.80   
|                                                                                            |      |          |      |          |      |         
|WEIGHTED AVERAGE SHARES OUTSTANDING (in thousands):                                         |     
|Basic                                                                                       |      | 27,417   |      | 27,421   |      | 27,571  
|                                                                                            |      |          |      |          |      |         
|Diluted                                                                                     |      | 28,965   |      | 27,834   |      | 28,234  
|                                                                                            |      |          |      |          |      |         

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



26
|-----------------------------------------------------------------------------------------------------------

|INTERPOOL, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITYFOR THE YEARS
ENDED DECEMBER 31, 2001, 2000 AND 1999


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

|                                             | Preferred Stock | Common Stock | Additional |    |  | Accum.OtherComp. | 
|-------------------------------------------- | --------------- | ------------ | ---------- | -- |  | ---------------- | 
|
|BALANCE, December 31,  1998                  |                 |             |            | $ |  | 27,566           | 
|Net income                                   |                 |             |            |   |  |                 | 
|Other comprehensive  income                  |                 |             |            |   |  |                 | 
|                                             |                 |              |           
|Comprehensive income                         |                 |             |            |   |  |                 | 
|                                             |                 |             
|Shares issued on exercise of                 |                
|stock option                                 |                 |             |            |   |  | 14               | 
|Purchase of 158,500 shares                   |                
|of treasury stock                            |                 |             |            |   |  |                 | 
|Cash dividends declared:                     |                
|Common stock, $0.15 per                      |                
|share                                        |                 |             |            |   |  |                 | 
|                                             |                 |              |            |    |  |                  | 
|BALANCE, December 31, 1999                   |                 |             |            |   |  | 27,580           | 
|Net income                                   |                 |             |            |   |  |                 | 
|Other comprehensive  income                  |                 |             |            |   |  |                 | 
|                                             |                 |             
|Comprehensive income                         |                 |             |            |   |  |                 | 
|                                             |                 |             
|Cash dividends declared:                     |                
|Common stock, $0.15 per                      |                
|share                                        |                 |             |            |   |  |                 | 
|                                             |                 |              |            |    |  |                  | 
|BALANCE, December 31, 2000                   |                 |             |            |   |  | 27,580           | 
|Net Income                                   |                 |             |            |   |  |                 | 
|Adoption of FAS 133-                         |                
|Cumulative effect through  December 31, 2000 |                 |             |            |   |  |                 | 
|Other comprehensive loss                     |                 |             |            |   |  |                 | 
|                                             |                 |             
|Comprehensive Income                         |                 |             |            |   |  |                 | 
|                                             |                 |             
|Purchase of 58,100 shares                    |                
|of treasury stock                            |                 |             |            |   |  |                 | 
|Cash dividends declared:                     |                
|Common stock, $0.1925 per                    |                
|share                                        |                 |             |            |   |  |                 | 
|                                             |                 |              |            |    |  |                  | 
|BALANCE, December 31, 2001                   |                 |             |            | $ |  | 27,580           | 
|                                             |                 |              |            |    |  |                  | 

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



27
|-----------------------------------------------------------------------------------------------------------

|INTERPOOL, INC. AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE YEARS ENDED DECEMBER 31, 2001,
2000 AND 1999(dollars in thousands)
|-----------------------------------------------------------------------------------------------------------------------------------------------

|                                                  | 2001 | 2000     | 1999
|------------------------------------------------- | ---- | -------- | ----
|CASH FLOWS FROM OPERATING ACTIVITIES:             |      |          |     
|Net income                                        |      | $42,480  |     
|Adjustments to reconcile net income to net cash   |     
|provided by operating activities                 |     
|Loss (Gain) from discontinued                     |     
|operations, net of tax                            |      | 1,909    |     
|Depreciation and amortization                     |      | 79,044   |     
|Loss on sale of leasing equipment                 |      | 1,659    |     
|Gain on sale of assets held for sale              |      | (1,774   | )   
|Provision for uncollectible accounts              |      | 2,302    |     
|Gain on securitized lease receivables             |      |         |     
|Gain on retirement of debt, net of tax            |      | (558     | )   
|Cumulative effect of change in accounting         |     
|principle, net of tax                             |      | (833     | )   
|Loss on market value adjustment for               |     
|derivative instruments                            |      | 2,647    |     
|Changes in assets and liabilities -               |     
|Accounts and notes receivable                     |      | (7,555   | )   
|Other receivables                                 |      | (3,513   | )   
|Other assets                                      |      | 10,542   |     
|Accounts payable and accrued expenses             |      | (18,016  | )   
|Income taxes payable                              |      | 4,377    |     
|Deferred income                                   |      | (145     | )   
|Minority interest in equity of subsidiaries       |      | (1,030   | )   
|                                                  |      |          |     
|Net cash provided by operating activities         |      | 111,536  |     
|                                                  |      |          |     
|CASH FLOWS FROM INVESTING ACTIVITIES:             |     
|Acquisition of leasing equipment                  |      | (157,116 | )   
|Proceeds from dispositions of leasing equipment   |      | 30,948   |     
|Proceeds from disposition of assets held for sale |      | 299,105  |     
|Investment in direct financing leases             |      | (123,728 | )   
|Cash collections on direct financing leases,      |     
|net of income recognized                          |      | 43,014   |     
|Changes in marketable securities and other        |     
|investing activities                              |      | (512     | )   
|Investment in and advances to subsidiary          |      |         |     
|Change in accrued equipment purchases             |      | (44,033  | )   
|Changes in assets and liabilities related to      |     
|discontinued operations                           |      | 6,363    |     
|Acquisitions, net of cash acquired                |      |         |     
|                                                  |      |          |     
|Net cash provided by (used for)                   |     
|investing activities                              |      | 54,041   |     
|                                                  |      |          |     
|CASH FLOWS FROM FINANCING ACTIVITIES:             |     
|Proceeds from issuance of debt                    |      | 145,200  |     
|Payment of long-term debt and capital             |     
|lease obligations                                 |      | (244,930 | )   
|Borrowings of revolving credit lines              |      | 165,384  |     
|Repayment of revolving credit lines               |      | (278,867 | )   
|Proceeds from issuance of common stock            |      |         |     
|Proceeds from securitized lease receivables       |      |         |     
|Purchase of treasury stock                        |      | (929     | )   
|Dividends paid                                    |      | (4,799   | )   
|                                                  |      |          |     
|Net cash provided by (used for)                   |     
|financing activities                              |      | (218,941 | )   
|                                                  |      |          |     
|Net increase (decrease) in cash and               |     
|short-term investments                            |      | $(53,364 | )   
|CASH AND SHORT-TERM INVESTMENTS,                  |     
|beginning of period                               |      | 155,553  |     
|                                                  |      |          |     
|CASH AND SHORT-TERM INVESTMENTS,                  |     
|end of period                                     |      | $102,189 |     
|                                                  |      |          |     
|Supplemental schedule of non-cash                 |     
|financing activities:                             |     
|Assumption of debt in connection with             |     
|Assets Held for Sale                              |      | $52,551  |     
|                                                  |      |          |     
|Increase in minority interest in consolidated     |     
|subsidiary from contribution of equipment         |      | $26,326  |     
|                                                  |      |          |     
|Liability on unrealized loss on swap agreements   |      | $19,798  |     
|                                                  |      |          |     

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


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

|INTERPOOL,
INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS



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

|(1) |  | Nature
of operations and significant accounting policies:
|--- |  | ---------------------------------------------------------

|The nature of operations
and the significant accounting policies used by Interpool, Inc. and subsidiaries
(the Company or Interpool) in the preparation of the
accompanying consolidated financial statements are summarized below. The
Companys accounting records are maintained in United States dollars and
the consolidated financial statements are prepared in accordance with accounting
principles generally accepted in the United States.


Nature of
operations


The Company and its
subsidiaries conduct business principally in a single industry segment, the
leasing of intermodal dry freight standard containers, chassis and other
transportation related equipment. Within this single industry segment, the
Company has two reportable segments: container leasing and domestic intermodal
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 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 had formerly
operated in a third reportable segment, computer equipment leasing. The Company
operated in this segment through two majority owned subsidiaries, Microtech
Leasing Corporation (Microtech) and Personal Computer Rentals (PCR). Microtech
Leasing Corporation specializes in leasing microcomputers and related equipment
to venture capital backed and emerging growth companies. PCR Corporation focuses
on the computer and audio/visual (AV) equipment needs of companies for trade
shows, conferences, training classes, meetings and events. During the third
quarter of 2001, management, having the authority to do so, adopted a formal
plan to exit this segment through the sale of PCR and liquidation of Microtech.
See Note 9 to the 2001 consolidated financial statements for further information
regarding the sale of PCR and discontinued operations of the computer leasing
segment.


Basis of
consolidation


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


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


The Companys equity
in the income and/or loss from such equity investments, net of goodwill
amortization, is included in other (income)/expense, net and was approximately
$426, $835 and $1,315 for the years ended December 31, 2001, 2000 and 1999,
respectively.


Goodwill


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


29
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(dollars in thousands,
except per share amounts)


Translation of
foreign currencies


The Company considers the U. S.
dollar its functional currency and therefore, translates foreign currency statements
using an average exchange rate for revenue and expense accounts and the rate of exchange
in effect at the balance sheet date for assets and liabilities. Substantially all
transactions are U.S. dollar denominated.


Revenues


Equipment leasing revenues
include revenue from operating leases and income on direct financing leases,
which is recognized over the term of the lease using the effective interest
method. Rental income on operating leases is recognized on the accrual basis
based on the contractual agreement with the leased customer.


Leasing
equipment


As of December 31, 2001, in
excess of 94% of leasing equipment is on lease to customers. The net value of
equipment available for hire is not material.


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

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

|Effective October 1, 2000,
the Company revised its estimate of the depreciation life of chassis from 15
years to 17.5 years. The effect of this change was to decrease depreciation
expense by $955 for the three months ended December 31, 2000. For the year ended
December 31, 2001, the effect of this change was to decrease depreciation
expense by $3,736.


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


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


Marketable and
other investment securities


Management has determined
that all securities are to be held for an indefinite period of time and
classified as securities available-for-sale carried at market value. Unrealized
holding gains and losses for available-for-sale securities are credited
(charged) to a component of stockholders equity net of related income
taxes. Management determines the appropriate classifications of securities at
the time of purchase.


Premium and discount on
securities are included in interest income over the period from acquisition to
maturity using the level-yield method. The specific identification method is
used to record gains and losses on security transactions.


The Company classified the
retained interest in securitized direct finance lease receivables as an
available for sale security, which is included in Other Investment
Securities in the accompanying consolidated balance sheets.


During the year ended
December 31, 2001, no sales of available-for-sale securities took place.


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



30
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(dollars in thousands,
except per share amounts)


The amortized cost and
estimated fair value of available for sale securities as of December 31, 2001
and 2000 are as follows:
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                       | Gross Unrealized
|---------------------- | ----------------
|
|
|2001                   |                 
|Other Investment Secur |                 
|Equity and Other Secur |                 
|                       |                 
|                       |                 
|                       |                 
|2000                   |                 
|Other Investment Secur |                 
|Equity and Other Secur |                 
|                       |                 
|                       |                 
|                       |                 

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

|                                      | AmortizedCost |        | Estimated FairValue |       
|------------------------------------- | ------------- | ------ | ------------------- | ------
|Due in one year                       |               | $7,887 |                     | $8,225
|Due after one year through five years |               | 7,427  |                     | 7,745 

|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 TaxAmount | TaxEffect | Net ofTax Amount
|------------------------------------------------------------ | ---------------- | --------- | ----------------
|Year Ended December 31, 2001                                 |                  |           |                 
|Unrealized holding losses arising during the period:         |                 
|Marketable securities                                        |                  | $(28      | )               
|Other investment securities                                  |                  | (658      | )               
|Swap agreements                                              |                  | (9,911    | )               
|                                                             |                  |           |                 
|                                                             |                  | $(10,597  | )               
|                                                             |                  |           |                 
|                                                            
|Year Ended December 31, 2000                                 |                 
|Unrealized holding gains arising during the period:          |                 
|Marketable securities                                        |                  | $14       |                 
|Other investment securities                                  |                  | 539       |                 
|                                                             |                  |           |                 
|                                                             |                  | $553      |                 
|                                                             |                  |           |                 
|                                                            
|Year Ended December 31, 1999                                 |                 
|Unrealized holding gains (losses) arising during the period: |                 
|Marketable securities                                        |                  | $(34      | )               
|Other investment securities                                  |                  | 771       |                 
|                                                             |                  |           |                 
|                                                             |                  | $737      |                 
|                                                             |                  |           |                 

|Fair value of
financial instruments


The carrying amount of cash
and short-term investments, trade receivables and payables, accrued interest
receivable and payable approximate fair value. The carrying amount and estimated
fair value of the Companys debt and capital securities is $1,410,310 and
$1,366,077, respectively, at December 31, 2001. The carrying amount and
estimated fair value of the Companys debt and capital securities is
$1,671,275 and $1,580,711, respectively, at December 31, 2000.


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


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

|(dollars in thousands,
except per share amounts)


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

|                              | December 31, 2000
|----------------------------- | -----------------
|
|Interest rate swap agreements |                  

|Concentration
of credit risk


The Company extends credit
to its customers after extensive credit evaluation. At December 31, 2001
approximately 32% of accounts receivable and notes receivable and 74% of the net
investment in direct financing leases were from customers outside of the United
States. At December 31, 2000, approximately 19% of accounts receivable and notes
receivable and 73% of the net investment in direct financing leases were from
customers outside of the United States.


The Companys credit
exposure to Korean, South American and Indonesian customers at December 31, 2001
and 2000 represented 3% and 6%, respectively, of accounts receivable and notes
receivable and 14% and 16%, respectively, of the net investment in direct
financing leases. During 2001, 2000 and 1999 respectively, 3%, 6% and 4% of the
Companys consolidated revenues were from these customers.


In 2001, 2000 and 1999 the
Companys top 25 customers represented approximately 69%, 67% and 67%,
respectively, of its consolidated revenues, with no single customer accounting
for more than 6%.


Net income per
share


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


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

|                                                    | (in thousands)
|--------------------------------------------------- | --------------
|
|Average common shares outstanding                   |               
|Common shares issuable (1)                          |               
|                                                    |               
|Average common shares outstanding assuming dilution |               
|                                                    |               

|(1) |  | Issuable
primarily under stock option plans.
|--- |  | --------------------------------------------

|The Company authorized a
stock repurchase plan on November 9, 1999. See Note 17 to the 2001 consolidated
financial statements for further information.


Adoption of
New Accounting Standard


Prior to the adoption of
Statement 133, interest differentials paid or received under these contracts are
recognized as yield adjustments to the effective yield of the underlying debt
instruments hedged. Interest rate swap contracts would only be recognized at
fair value if the hedged relationship is terminated. Gains or losses accumulated
prior to termination of the relationship would be amortized as a yield
adjustment over the shorter of the remaining life of the contract, or the
remaining period to maturity of the underlying debt instrument hedged. If the
contract remained outstanding after termination of the hedged relationship,
subsequent changes in market value of the contract would be recognized in
earnings. The Company does not use leveraged swaps and does not use leverage in
any of its investment activities that would put principal capital at risk.


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


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

|(dollars in thousands,
except per share amounts)



Statement 133, as amended,
is effective for fiscal years beginning after June 15, 2000. A company may also
implement the Statement as of the beginning of any fiscal quarter after issuance
(that is, fiscal quarters beginning June 16, 1998, and thereafter). Statement
133 cannot be applied retroactively. Statement 133 must be applied to (a)
derivative instruments and (b) certain derivative instruments embedded in
hybrid instruments. The Company does not hold any such hybrid instruments.


On January 1, 2001, the
Company adopted Statement 133. Statement 133, in part, allows special hedge
accounting for fair value and cash flow hedges. Statement 133 provides that the
gain or loss on a derivative instrument designated and qualifying as a fair
valuehedging instrument as well as the offsetting loss or gain on the
hedged item attributable to the hedged risk be recognized currently in earnings
in the same accounting period. Statement 133 provides that the effective portion
of the gain or loss on a derivative instrument designated and qualifying as a
cash flow hedging instrument be reported as a component of other comprehensive
income and be reclassified into earnings in the same period or periods during
which the hedged forecasted transaction affects earnings. (The remaining gain or
loss on the derivative instrument, if any, must be recognized currently in
earnings.)


As of December 31, 2000,
the Company had entered into 13 interest rate swap agreements with various
financial institutions. The aggregate notional balance of the swaps was $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. Under
previous generally accepted accounting principals (GAAP), the interest
differential payable or receivable by the Company on its interest rate swaps is
accrued by the Company as interest rates change, and is recognized by the
Company over the life of the swap agreement as an adjustment of interest
expense. In contrast Statement 133 effectively requires that changes in the fair
value of the swap agreements which are designated as effective cash flow hedges,
be reported as a component of other comprehensive income and changes in the fair
value of the swap agreements that do not qualify for hedge accounting to be
reported in earnings. Upon adoption of Statement 133 on January 1, 2001, the
Company recorded the swap contracts at their fair value resulting in an increase
in liabilities of approximately $9,012, with offsetting amounts recorded as
decreases to deferred tax liabilities of $2,435 and accumulated other
comprehensive income of $7,411 and an increase to earnings (net of tax) of $833.


Prospective
accounting pronouncements


On June 29, 2001, the Financial
Accounting Standards Board approved its proposed Statement of Financial Accounting
Standards No. 142, Goodwill and Other Intangible Assets.


Statement 142 will apply to
all acquired intangible assets whether acquired singly, as part of a group, or
in a business combination. The statement will supersede Accounting Principals
Board, or APB, Opinion No. 17, Intangible Assets, and will carry
forward provisions in APB Opinion No 17 related to internally developed
intangible assets. Adoption of Statement 142 will result in ceasing amortization
of goodwill. All of the provisions of the statement should be applied in fiscal
years beginning after December 15, 2001 to all goodwill and other intangible
assets recognized in an entitys statement of financial position at that
date, regardless of when those assets were initially recognized.


The Company is currently
evaluating its goodwill of $9,653 as prescribed by Statement 142 and does not
expect the adoption of this statement to result in an adjustment to recorded
goodwill.



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

|(dollars in thousands,
except per share amounts)


In August 2001, the
Financial Accounting Standards Board (FASB) approved its proposed Statement of
Financial Accounting Standards No. 144, Accounting for the Impairment of
Disposal of Long Lived Assets. Statement 144 addresses financial accounting
and reporting for the impairment or disposal of long-lived assets. This
Statement supersedes FASB Statement No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, and the
accounting and reporting provisions of APB Opinion 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, for the disposal of a segment of a business (as
previously defined in that Opinion). This Statement also amends ARB No. 51,
Consolidated Financial Statements, to eliminate the exception to
consolidation for a subsidiary for which control is likely to be temporary. All
the provisions of the statement should be applied to fiscal years beginning
after December 15, 2001. The Company is currently evaluating the carrying value
of its long lived assets as prescribed by Statement 144 and does not expect the
adoption of this statement in the first quarter of 2002 to have a material
effect on our consolidated financial statements.


Use of
estimates


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


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


Reclassifications


Certain reclassifications
have been made to the 2000 amounts in order to conform to the 2001 presentation.
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) |  | Income
taxes:
|--- |  | -------------

|Significant components of
deferred tax assets and liabilities as of December 31, 2001 and 2000 were as
follows:
|---------------------------------------------------------------------------------------------------------------

|                                    |  | 2001     |  | 2000    | 
|----------------------------------- |  | -------- |  | ------- | 
|Deferred tax assets:                |  |          |  |         | 
|Loss carry forwards                 |  | $105,662 |  | $75,844 | 
|Finance leases receivable           |  | 3,704    |  | 3,392   | 
|Other, primarily operating reserves |  | 8,617    |  | 4,934   | 
|                                    |  |          |  |        
|Total deferred tax assets           |  | 117,983  |  | 84,170  | 
|                                    |  |          |  |        
|                                   
|Deferred tax liabilities:           | 
|Operating property, net             |  | 135,765  |  | 103,603 | 
|Other                               |  | 12,108   |  | 9,459   | 
|                                    |  |          |  |        
|Total deferred tax liabilities      |  | 147,873  |  | 113,062 | 
|                                    |  |          |  |        
|Net deferred tax liability          |  | $29,890  |  | $28,892 | 
|                                    |  |          |  |        

|One of the Companys
subsidiaries has tax net operating loss carryforwards (NOLs) for Federal income
tax purposes totaling approximately $15,602, which may be used only to offset
that subsidiarys income. These NOLs, if not utilized, will expire between
2005 and 2006. In addition, NOLs of approximately $286,288 have been granted as
a result of certain losses from leasing activities that are characterized as
suspended passive losses. These losses can be carried forward indefinitely to
offset income from future leasing activities.


A significant subsidiary of
the Company is a Barbados corporation. Under the terms of a protocol between the
United States and Barbados, the subsidiarys leasing income is fully
taxable by Barbados, but exempt from U.S. Federal taxation. Since 1991, the
Barbados tax rate was a maximum of 21⁄2% of income earned in Barbados. No
deferred U.S. Federal income taxes have been provided on the unremitted earnings
of the subsidiary since it is the Companys intention to indefinitely
reinvest such earnings. At December 31, 2001 unremitted earnings of this
subsidiary were approximately $236,600. The deferred U.S. Federal income taxes
related to the unremitted earnings of this subsidiary would be approximately
$82,800, assuming these earnings are taxable at the U.S. statutory rate, net of
foreign tax credits.


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

|(dollars in thousands,
except per share amounts)


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

|                                                      | 2001 |       | 2000 |       | 1999 |      
|----------------------------------------------------- | ---- | ----- | ---- | ----- | ---- | -----
|U.S. statutory rate                                   |      | 35.0  | %    | 35.0  | %    | 35.0 
|Difference due to operation of subsidiary in Barbados |      | (23.6 | )    | (23.1 | )    | (25.7
|Federal taxes on foreign income                       |      | 1.0   |      | 0.9   |      | 1.3  
|State taxes                                           |      | 0.6   |      | 3.1   |      | 0.9  
|Other                                                 |      | 0.5   |      | 0.5   |      | 0.3  
|                                                      |      |       |      |       |      |      
|Actual tax rate                                       |      | 13.5  | %    | 16.4  | %    | 11.8 
|                                                      |      |       |      |       |      |      

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

|         | 2001 |        | 2000 |        | 1999 |       
|-------- | ---- | ------ | ---- | ------ | ---- | ------
|U.S.     |      | $5,981 |      | $7,459 |      | $2,400
|Other    |      | 744    |      | 716    |      | 400   
|         |      |        |      |        |      |       
|         |      | $6,725 |      | $8,175 |      | $2,800
|         |      |        |      |        |      |       
|Current  |      | $2,144 |      | $2,691 |      | $2,248
|Deferred |      | 4,581  |      | 5,484  |      | 552   
|         |      |        |      |        |      |       
|         |      | $6,725 |      | $8,175 |      | $2,800
|         |      |        |      |        |      |       

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

|(3) |  | Leasing
activities:
|--- |  | -------------------

|As lessee


The net book value of
assets acquired through capital leases was $351,040 at December 31, 2001. The
aggregate capital lease obligations, secured by equipment, with installments
payable in varying amounts through 2011, were $355,252 at December 31, 2001.


As of December 31, 2001,
the annual maturities of capital leases and related interest were as follows:
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|           | Payment |          | Interest |         | Principal |         
|---------- | ------- | -------- | -------- | ------- | --------- | --------
|2002       |         | $54,128  |          | $15,482 |           | $38,646 
|2003       |         | 69,741   |          | 13,767  |           | 55,974  
|2004       |         | 60,226   |          | 10,658  |           | 49,568  
|2005       |         | 67,797   |          | 8,662   |           | 59,135  
|2006       |         | 40,989   |          | 6,084   |           | 34,905  
|Thereafter |         | 124,988  |          | 7,964   |           | 117,024 
|           |         |          |          |         |           |         
|           |         | $417,869 |          | $62,617 |           | $355,252
|           |         |          |          |         |           |         

|The Company leases office
space and certain leasing equipment under operating leases expiring at various
dates through 2010. Rental expense under operating leases aggregated $16,902,
$7,581 and $4,226 for the periods ended December 31, 2001, 2000 and 1999,
respectively.


As of December 31, 2001,
the aggregate minimum rental commitment under operating leases having initial or
remaining noncancellable lease terms in excess of one year was as follows:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 2002       |  | $11,625 | 
| | ---------- |  | ------- | 
| | 2003       |  | 9,411   | 
| | 2004       |  | 9,388   | 
| | 2005       |  | 9,397   | 
| | 2006       |  | 8,966   | 
| | Thereafter |  | 44,910  | 

|As lessor


The Company has entered
into various leases of equipment that qualify as direct financing leases. At the
inception of a direct finance lease, the Company records a net investment based
on the gross investment (representing the total future minimum lease payments
plus unguaranteed residual value), net of unearned lease income. The
unguaranteed residual value is generally equal to the purchase option of the
lessee, which in the case of the Companys lease contracts is insignificant
and is included in total lease receivables. Unearned income represents the
excess of gross investment over equipment cost. Receivables under these direct
financing leases, net of unearned income, are collectible through 2011 as
follows:


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

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

|           | December 31, 2001
|---------- | -----------------
|
|
|2002       |                  
|2003       |                  
|2004       |                  
|2005       |                  
|2006       |                  
|Thereafter |                  
|           |                  
|           |                  
|           |                  

|As of December 31, 2000,
the Company had total lease receivable, unearned lease income and net lease
receivable of $189,989, $38,603 and $151,386 respectively.


As of December 31, 2001 the
Company also had noncancelable operating leases, under which it will receive
future minimum rental payments as follows:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 2002       |  | $70,402 | 
| |  | ---------- |  | ------- | 
| |  | 2003       |  | 62,194  | 
| |  | 2004       |  | 40,689  | 
| |  | 2005       |  | 23,314  | 
| |  | 2006       |  | 6,735   | 
| |  | Thereafter |  | 3,928   | 

|Effective January 1, 1995,
the Company began capitalizing lease commissions and amortizing this cost over
the average life of the related lease contract. At December 31, 2001 and 2000,
$3,268 and $3,801 of these commissions were included in other assets.


During the three months
ended June 30, 2001, the Company initiated a bankruptcy claim against a customer
and sought to collect receivables and to recover equipment values through its
insurance policies. The Company has demanded the return of approximately $48,588
of equipment, including $8,482 of direct finance leases which were reclassified
to leasing equipment. The total net book value of equipment leased to this
customer as of December 31, 2001 was approximately $10,651. The Company
anticipates that approximately $8,500 of this equipment will not be recovered
from the customer. In addition, the outstanding receivables from this customer
as of December 31, 2001 totaled approximately $19,735 of which $18,785 is
covered by insurance, with the balance reserved for in the allowance for
doubtful accounts.


At this time, the Company
has estimated no impairment upon the liquidation and/or re-lease of these assets
after considering anticipated insurance proceeds. The maximum insurance coverage
related to this claim is $35,000. The overall recovery of the asset values has
been evaluated taking into consideration the equipment book value, the cost to
recover and re-lease the equipment, and the total outstanding receivables, as
well as the likelihood to collect through the recovery and sale of the equipment
or the stipulated equipment values within the insurance policy. The Company
continued to record revenue from these leases through August 20, 2001 at which
time, revenue recognition was discontinued, as lease payments through August 20,
2001 were covered by the insurance policies.


The Company will continue
to assess the overall recovery of the asset values and adjust the assumptions
used in evaluating the total insurance claim with respect to this
customers bankruptcy. As additional information becomes available,
reserves for the impairment of the asset values may be necessary based upon
changes in economic conditions and the assumptions used in evaluating the total
insurance claim.


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

|(dollars in thousands,
except per share amounts)


Allowance for
doubtful accounts


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

|                              | 2001 |         | 2000 |         | 1999 |        
|----------------------------- | ---- | ------- | ---- | ------- | ---- | -------
|Balance, beginning of year    |      | $14,271 |      | $10,260 |      | $4,632 
|Provision charged to expense  |      | 2,302   |      | 2,192   |      | 6,925  
|Acquired                      |      |        |      | 1,281   |      |       
|Write-offs, net of recoveries |      | (10,711 | )    | 538     |      | (1,297 
|                              |      |         |      |         |      |        
|Balance, end of year          |      | $5,862  |      | $14,271 |      | $10,260
|                              |      |         |      |         |      |        

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

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

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

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

|As of December 31, 2001 and
2000, included in accounts and notes receivable are non-performing receivables
of $4,887 and $10,034, respectively.


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

|(4) |  | Debt:
|--- |  | -----

|Debt consists of notes and
loans with installments payable in varying amounts through 2008, with effective
interest rates of approximately 3.9% to 7.9% and a weighted average rate of
5.78% in 2001. The principal amount of debt payable under fixed rate contracts
is $309,298. Remaining debt is payable under floating rate arrangements.
Approximately $397,028 of floating rate debt outstanding has been converted to
fixed rate debt through the use of interest rate swaps as described below. The
agreements contain certain covenants, which, among other things, provide for the
maintenance of specified levels of tangible net worth (as defined) and a maximum
debt to net worth ratio. At December 31, 2001, under covenants in the
Companys loan agreement approximately $177,500 of retained earnings were
available for dividends. The Company was in compliance with its debt covenants
at December 31, 2001.


As of December 31, 2001,
the annual maturities of notes and loans, net of interest thereon were as
follows:
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | 2002       |  | $141,018 | 
| |  | ---------- |  | -------- | 
| |  | 2003       |  | 95,561   | 
| |  | 2004       |  | 56,357   | 
| |  | 2005       |  | 219,804  | 
| |  | 2006       |  | 19,365   | 
| |  | Thereafter |  | 447,953  | 
| |  |            | 
| |  |            |  | $980,058 | 
| |  |            | 

|The Company has a $215,000
revolving credit facility with a group of commercial banks; on December 31,
2001, $215,000 was outstanding, with an interest rate of 6.21%, including the
effect of interest rate swap contracts in place as of December 31, 2001. 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. In addition, as of December 31, 2001, the Company had an
available line of credit of $10,000 under one facility, under which $3,246 was
outstanding. The interest rate under this facility as of December 31, 2001 was
4.3%. Subsequent to December 31, 2001 the Company has continued to incur and
repay debt obligations in connection with financing its equipment leasing
activities. Under our revolving credit facility and most of our other debt
instruments, the Company is required to maintain a tangible net worth (as
defined) 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. At December 31, 2001, the Company was in
compliance with these requirements.


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

|(dollars in thousands,
except per share amounts)


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 principal balance is payable in
quarterly installments of $500, with a balloon payment due in October 2002.


In July 2001, the 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. At
December 31, 2001, $44,089 of the on-balance sheet container securitization
facility was outstanding with an interest rate of 5.10%, including the effect of
interest rate swap contracts in place as of December 31, 2001.


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 in place as of December 31,
2001. This facility provides the Company an additional source of funding and is
accounted for as on-balance sheet secured debt financing.


In February 1998, the
Company issued $100,000 principal amount of 6-5/8% Notes due 2003 (the
6-5/8% Notes). The net proceeds were used to repay $83,000 in
borrowings under the revolving credit agreement and for other general corporate
purposes. During the fourth quarter of 1999, the Company retired $17,000 of the
6-5/8% Notes and recognized an extraordinary gain of $740 net of tax expense of
$494. During the first quarter of 2000, the Company retired $8,200 of the 6-5/8%
Notes and recognized an extraordinary gain of $471 net of tax expense of $314.
During 2001, the Company retired $27,174 of the 6-5/8% Notes and recognized an
extraordinary gain of $435 net of tax expense of $290. As of December 31, 2001,
$47,626 principal amount of the 6-5/8% Notes remains outstanding.


In July and August, 1997,
the Company issued $225,000 of ten year notes, comprised of $150,000 of 7.35%
Notes due 2007 and $75,000 of 7.20% Notes due 2007. The net proceeds from these
offerings were used to repay secured indebtedness, to purchase equipment and for
other investments. During the first quarter of 2000, the Company retired $3,000
of the 7.35% Notes and recognized an extraordinary gain of $369 net of tax
expense of $246. During 2001, the Company retired $2,075 of the 7.20% Notes and
recognized an extraordinary gain of $123 net of tax expense of $82. As of
December 31, 2001, $72,925 and $147,000 principal amount of the 7.20% and 7.35%
Notes, respectively, remains outstanding.


In addition to the debt
specifically identified above, the Company has additional notes and loan
outstanding with various financial institutions totaling $75,106, as of December
31, 2001, with installments payable in varying amounts through 2008 with
interest rates of approximately 4.2% to 7.9%.


In 2001, the Company
entered into an interest rate swap contract with notional amounts totaling
$51,467. These amounts relate to on and off balance sheet financing, of which
the notional amounts are $43,330 and $8,137, respectively. The terms of the
interest rate swap contract are for six years. The interest rate swap contracts
convert variable rate debt into fixed rate debt. The maturity of the contract
coincides with the maturity of the underlying debt instruments hedged. At
December 31, 2001, the on and off balance sheet notional amounts are
approximately $39,575 and $7,432, respectively.


In 2000, the Company
entered into interest rate swap contracts with notional amounts totaling
$334,882. The terms of the interest rate swap contracts are for two and seven
years. The interest rate swap contracts convert variable rate debt into fixed
rate debt. The maturity of these contracts coincides with the maturity of the
underlying debt instruments hedged. At December 31, 2001, the notional amount
was approximately $323,268.


In 1998, the Company
entered into interest rate swap contracts with notional amounts totaling
$79,709. The terms of the interest rate swap contracts are for three, five and
seven years. The interest rate swap contracts convert variable rate debt into
fixed rate debt. The maturity of these contracts coincides with the maturity of
the underlying debt instruments hedged. In 2000, a portion of the debt
instrument hedged was retired and the related portion of the swap contract was
closed. At December 31, 2001, the notional amount was approximately $34,185.



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

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

|(5) |  | 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.


The unrealized pre-tax losses on
cash flow hedges as of December 31, 2001 of $9,911 have been reported in the Companys
consolidated balance sheet as a component of accumulated other comprehensive income
(loss), along with the related deferred income tax benefit of $1,928.



Amounts recorded in accumulated
other comprehensive income would be reclassified into earnings upon termination of these
interest rate swap agreements prior to their contractual maturity. The Company does not
intend to terminate any such interest rate swap agreements prior to maturity and
therefore does not expect any gains or losses to be reclassified into income within the
next twelve months.


Pre-tax losses for the year
ended December 31, 2001 resulting from the change in fair value of interest rate
swap agreements held which do not quality as cash flow hedges under Statement
133 of $1,647 have been recorded on the consolidated statements of income as
market value adjustment for derivative instruments. Interest rate swap
agreements which qualify as perfect cash flow hedges have no ineffectiveness and
therefore are not reflected in the consolidated statements of income. Interest
rate swap agreements which qualify as cash flow hedges but are not perfectly
correlated have associated ineffectiveness of approximately $1,000 which has
been recorded in the consolidated statements of income as market value
adjustment for derivative instruments.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(6) |  | Acquisition
of North American Intermodal Division of Transamerica Leasing, Inc.:
|--- |  | --------------------------------------------------------------------------------

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


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


During the year ended 2001,
the Company adjusted the excess of the purchase price paid over the book 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 premium paid over the book value of the assets and
liabilities acquired by $5,112, and is being amortized over the average
remaining depreciable life of the chassis acquired.


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

|(dollars in thousands,
except per share amounts)


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

|                                         | 2000 |          | 1999 |         
|---------------------------------------- | ---- | -------- | ---- | --------
|Revenues                                 |      | $298,484 |      | $258,433
|Income from continuing operations before |     
|change in accounting principle and       |      | 47,050   |      | 28,909  
|extraordinary items                      |     
|Basic net income per share               |      | $1.72    |      | $1.05   
|Diluted net income per share             |      | $1.69    |      | $1.02   

|(7) |  | Assets
Held for Sale:
|--- |  | ---------------------

|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 assets held for sale as of December 31, 2000 include $279.2 million
related to the units acquired from TA, $5.9 million of accounts receivable and
$63.3 million of assets previously owned by the Company. The Company recorded a
gain of $1.8 million upon the consummation of this sale, which represents the
premium paid for the units previously owned by the Company over their net book
value.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(8) |  | Lease
securitization program:
|--- |  | -----------------------------

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


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


The Company classified the retained
interest as an available for sale security, which is included in Other Investment
Securitiesin the accompanying consolidated balance sheets. Accordingly, the
retained interest is accounted for at fair value, with any changes in fair value over its
allocated historical book value recorded as a component of other comprehensive income,
net of tax, in the statement of changes in shareholdersequity. As of December 31,
2001, the Company estimated the fair market value of retained interest was $15,970 using
a discounted cash flow model assuming expected credit losses of 1.5% and a discount rate
of 12.6%. For the years ended December 31, 2001, 2000 and 1999, the Company recorded
interest income on the retained interest totaling $3,558, $4,145 and $3,050,
respectively, which is included in revenues in the accompanying consolidated statements
of income. In 2001, defaulted finance leases of bankrupt customers were removed from the
securitization program resulting in a reduction of the retained interest totaling $1,798.


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



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

|(dollars in thousands,
except per share amounts)


At December 31, 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:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

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

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

|(9) |  | Discontinued
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, a
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 have been classified as discontinued
operations. Pursuant to Accounting Principles Board Opinion 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 accompanying Consolidated Financial
Statements and notes thereto have been restated for all comparative periods
presented 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 have been accounted for as Discontinued Operations
in the accompanying Consolidated Financial Statements.


On December 31, 2001, the
Company completed the 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 $2,297. As payment for the transaction, the management of
PCR transferred its 24.5% ownership in Microtech valued at $792 to the Company,
thereby increasing the Companys ownership in Microtech to 100%. The
balance of the purchase price is in the form of a non-recourse note issued by
PCR to the Company in the amount of $1,657 at an effective interest rate of 15%,
after considering a payment of $640 received by the Company on January 2, 2002.
The original terms of the note are interest only at 5% through December 31, 2004
and an annual rate of 7.5% for the period from December 31, 2004 through
December 31, 2010 (the maturity date). Monthly principal payments in
equal installments of $35 commence on January 31, 2005 and continue through the
maturity date.


In addition, on April 6,
1999, the Company also entered into a $3,500 long-term revolving credit facility
with PCR. This revolving credit facility is due on demand and remains
outstanding as of December 31, 2001. The line of credit bears interest at 12%
per annum and is payable monthly. This line of credit is secured by
substantially all of PCRs assets, subordinated to the interest of a
financial institution which provided PCR an additional line of credit.




41
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(dollars in
thousands, except per share amounts)


Since 2000, the Company has
guaranteed PCR debts due to parties other than the Company totaling $5,000,
which remain in effect.


The assets and liabilities
of discontinued operations, presented in the accompanying Consolidated Balance
Sheets are primarily comprised of Cash, Accounts Receivable, Net Investment in
Direct Financing Leases, Leasing Equipment, Other Assets, Accounts Payable and
Accrued Expenses and Debt Obligations.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(10) |  | Cumulative
effect of change in accounting principle:
|---- |  | ----------------------------------------------------

|During 2001, the Company
recorded the cumulative effect of a change in accounting principle of $833 net
of tax expense of $44. This represents the cumulative effect through December
31, 2000 regarding the Companys accounting for swap transactions not
accounted for as hedges in accordance with the Financial Accounting Standards
Board issued statement of Financial Accounting Standards No. 133, Accounting
for Derivative Instruments and Hedging Activities.


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

|(11) |  | Other
contingencies and commitments:
|---- |  | ------------------------------------

|At December 31, 2001,
commitments for capital expenditures totaled approximately $70,600.


Under certain of the
Companys leasing agreements, the Company as lessee may be obligated to
indemnify the lessor for loss, recapture or disallowance of certain tax benefits
arising from the lessors ownership of the equipment. This recourse feature
is included in capital lease obligations with a net book value of approximately
$21,180.


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


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

|(12) |  | Cash
flow information:
|---- |  | ----------------------

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


For the years ended
December 31, 2001, 2000 and 1999, cash paid for interest was approximately
$100,043, $78,880 and $64,563, respectively. Cash paid for income taxes was
approximately $2,442, $1,354, and $2,926, respectively.
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(13) |  | 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 of the Company, held a direct or indirect equity interest of 42.76% and
Radcliff Group, Inc., a related party, held a direct or indirect equity interest
of 42.17%. 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 being paid under this lease does not exceed rent that the
Company would have paid in an arms length transaction with an unrelated
third party. On January 28, 2002 the Company executed a Purchase and Sale
Agreement, pursuant to which the Company will acquire the building which houses
our corporate offices. The fair market value purchase price of the approximately
39,000 square feet building will be $6,250 as determined by an independent
property appraisal firm and approved by the Companys Board of
Directors.The Company expects to conclude the transaction during the second
quarter of 2002.


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 and payment of
health related costs continues through December 31, 2002. Compensation under
this agreement was $492 in 2001, 2000 and 1999.



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

|(dollars in
thousands, except per share amounts)


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. Theannual lease term renews automatically
unless canceled by either party prior to the first day of the renewal period.
The terms of the lease agreement, in the opinion of our management, are
comparable to terms that Trac Lease would have obtained in an arms length
transaction with an unrelated third party.


The Ivy Group, a New Jersey
general partnership composed directly or indirectly of Mr. Tuchman, Radcliff
Group, Inc., Mr. 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 $2,900.
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 approximately $2,691 through June 30,
2001. Effective as of July 1, 2001, the Company restructured its relationship
with The Ivy Group and its principals to provide it 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 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 $2,407 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 that were engaged by the Company 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 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.


The terms of all
arrangements between Chassis Holdings and Trac Lease, including rental rates,
are, in the opinion of our management, comparable to terms that we would have
obtained in arms length transactions with unrelated third parties. 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.


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. The aggregate loan balance of
$13,433 at June 30, 2001 bears 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 therewith, The Ivy Group executed
a Chattel Mortgage Security Agreement and Assignment under which the Company was
granted a security interest in 4,364 chassis owned by The Ivy Group and 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 Chassis Holdings as part of the July 1, 2001 restructuring with
The Ivy Group.


In February 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
since 1998 and Chief Financial Officer and Executive Vice President since
October 2000, 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, Mitchell Gordon was named the Companys
Chief Financial Officer and Executive Vice President and the Consulting
Agreement was terminated.
43
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(dollars in
thousands, except per share amounts)


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

| |  |                         |  | 2001   |  | 2000   |  | 1999   | 
| |  | ----------------------- |  | ------ |  | ------ |  | ------ | 
| |  | Revenue                 |  | $496   |  | $1,104 |  | $958   | 
| |  |                         |  |        |  |        | 
| |  | Lease operating expense |  | $4,343 |  | $3,033 |  | $3,030 | 
| |  |                         |  |        |  |        | 
| |  | Administrative expense  |  | $1,379 |  | $1,061 |  | $1,092 | 
| |  |                         |  |        |  |        | 
| |  | Interest expense        |  | $     |  | $168   |  | $353   | 
| |  |                         |  |        |  |        | 

|(14) |  | 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 year ended December 31, 2001, the
Company expensed approximately $461 related to this plan. No contributions were
made by the Company or its subsidiaries to these plans during the years ended
December 31, 2000 and 1999.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(15) |  | Segment
and geographic data:
|---- |  | ----------------------------

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


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

|2001:                                       |  | ContainerLeasing |   | DomesticIntermodalEquipment |  | Totals     |  
|------------------------------------------- |  | ---------------- | - | --------------------------- |  | ---------- | -
|Revenues from external customers            |  | $112,085         |   | $193,048                    |  | $305,133   |  
|Lease operating and administrative expenses |  | 12,443           |   | 82,546                      |  | 94,989     |  
|Depreciation and amortization               |  | 36,583           |   | 37,728                      |  | 74,311     |  
|Other income/(expense), net                 |  | (1,644           | ) | 1,178                       |  | (466       | )
|Interest income                             |  | 3,788            |   | 5,612                       |  | 9,400      |  
|Interest expense                            |  | 27,966           |   | 67,078                      |  | 95,044     |  
|Income from continuing operations before    | 
|taxes and extraordinary item                |  | 37,237           |   | 12,486                      |  | 49,723     |  
|Net investment in DFLs                     |  | 168,890          |   | 60,349                      |  | 229,239    |  
|Leasing equipment, net                      |  | 529,867          |   | 842,459                     |  | 1,372,326  |  
|Equipment purchase                          |  | 168,906          |   | 111,938                     |  | 280,844    |  
|Total segment assets                        |  | $822,784         |   | $1,084,981                  |  | $1,907,765 |  

|44
|--

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

|2000:                                       |  | ContainerLeasing | DomesticIntermodalEquipment | Totals    
|------------------------------------------- |  | ---------------- | --------------------------- | ----------
|Revenues from external customers            |  | $103,018         |                             | $139,237  
|Lease operating and administrative expenses |  | 12,637           |                             | 48,282    
|Depreciation and amortization               |  | 29,911           |                             | 30,856    
|Other income/(expense), net                 |  | (719             | )                           | (1,790    
|Interest income                             |  | 5,984            |                             | 10,527    
|Interest expense                            |  | 32,569           |                             | 52,027    
|Income from continuing operations before    | 
|taxes and extraordinary item                |  | 33,166           |                             | 16,809    
|Net investment in DFLs                     |  | 125,046          |                             | 26,340    
|Leasing equipment, net                      |  | 483,925          |                             | 771,010   
|Equipment purchases                         |  | 163,535          |                             | 129,938   
|Total segment assets                        |  | $795,994         |                             | $1,360,794

|1999:                                       |  | ContainerLeasing | DomesticIntermodalEquipment | Totals 
|------------------------------------------- |  | ---------------- | --------------------------- | -------
|Revenues from external customers            |  | $94,608          |                             | $95,180
|Lease operating and administrative expenses |  | 16,959           |                             | 38,267 
|Depreciation and amortization               |  | 32,886           |                             | 22,749 
|Other income/(expense), net                 |  | (1,953           | )                           | (869   
|Interest income                             |  | 3,563            |                             | 8,486  
|Interest expense                            |  | 24,635           |                             | 39,794 
|Income from continuing operations before    |  | 21,738           |                             | 1,987  
|taxes and extraordinary item                | 

|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:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                           |  | 2001       |  | 2000       |  | 1999     | 
|-------------------------- |  | ---------- |  | ---------- |  | -------- | 
|REVENUES: United States(a) |  | $193,111   |  | $139,312   |  | $103,190 | 
|International              |  | 112,022    |  | 102,943    |  | 86,598   | 
|                           |  |            |  |            |  |         
|                           |  | $305,133   |  | $242,255   |  | $189,788 | 
|                           |  |            |  |            |  |         
|ASSETS:                    | 
|United States              |  | $1,084,981 |  | $1,360,794 | 
|International              |  | 822,784    |  | 795,994    | 
|                           |  |            |  |            | 
|                           |  | $1,907,765 |  | $2,156,788 | 
|                           |  |            |  |            | 

|(a) |  | Includes
revenues from related parties of $496, $1,104 and $958 in 2001, 2000 and 1999,
respectively.
|--- |  | -----------------------------------------------------------------------------------------------------

|45
|--

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

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

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

|(17) |  | Capital
stock:
|---- |  | --------------

|The Companys 1993
Stock Option Plan for Executive Officers and Directors (the Stock Option
Plan) was adopted by the Companys Board of Directors and approved by
the stockholders in March 1993. A total of 6 million shares of common stock have
been reserved for issuance under the Stock Option Plan. Options may be granted
under the Stock Option Plan to executive officers and directors of the Company
or a subsidiary (including any executive consultant of the Company and its
subsidiaries), whether or not they are employees. These options vest six months
from date of grant and expire ten years from date of grant.


The Companys
Nonqualified Stock Option Plan for Non-employee, Non-consultant Directors (the
Directors Plan) was adopted by the Board of Directors and
approved by the stockholders in March 1993. The Directors Plan is
administered by the Stock Option Committee of the Board of Directors. Under the
Directors Plan a nonqualified stock option to purchase 15,000 shares of
common stock is automatically granted to each non-employee, non-consultant
director of the Company, in a single grant at the time the director first joins
the Board of Directors. The Directors Plan authorizes grants of options up
to an aggregate of 150,000 shares of common stock. The exercise price per share
is the fair market value of the Companys common stock on the date on which
the option is granted (the Grant Date). The options granted pursuant
to the Directors Plan may be exercised at the rate of 1/3 of the shares on
the first anniversary of the directors Grant Date and 1/3 of the shares on
the second anniversary of the directors Grant Date and 1/3 of the shares
on the third anniversary of the directors Grant Date, subject to certain
holding periods required under rules of the Securities and Exchange Commission.
Options granted pursuant to the Directors Plan expire ten years from their
Grant Date.


Through September 16, 1998,
options to purchase 4,408,501 shares under the Companys 1993 Stock Option
Plan for Executive Officers and Directors 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 of the 4,393,501 options to purchase shares of the
Companys common stock outstanding under its 1993 Stock Option Plan for
Executive Officers and Directors, as well as the Companys Nonqualified
Stock Option Plan for Non-employee, Non-consultant Directors and issued
4,393,501 new options in their place. The newly issued options were granted with
an exercise price equal to the closing market price of the Companys stock
as of September 16, 1998 (the date of grant). This results in a new
measurement date whereby the newly issued options vest six months from date of
grant and expire ten years from date of grant. All other terms and conditions of
the newly issued options are similar to the canceled options.

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

|(dollars in
thousands, except per share amounts)


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


On October 10, 2000,
options to purchase 50,000 shares of the Companys common stock were
granted under the 1993 Stock Option Plan for Executive Officers and Directors to
each of Mitchell I. Gordon, the Companys Chief Financial Officer and
Executive Vice President, and Herbert Mertz, 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.


Changes during 1999, 2000
and 2001 in options outstanding for the combined plans were as follow:
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                 |  | Number ofOptions |   | Weighted AverageExercise Price | 
|-------------------------------- |  | ---------------- | - | ------------------------------ | 
|Outstanding at January 1, 1999   |  | 4,393,501        |   | $10.25                         | 
|Exercised in 1999                |  | (13,500          | ) | 10.25                          | 
|                                 |  |                  |  
|Outstanding at December 31, 1999 |  | 4,380,001        |   | $10.25                         | 
|Granted in 2000                  |  | 115,000          |   | 11.21                          | 
|                                 |  |                  |   |                               
|Outstanding at December 31, 2000 |  | 4,495,001        |   | $10.27                         | 
|Granted in 2001                  |  |                 |   |                               | 
|Canceled in 2001                 |  |                 |   |                               | 
|Exercised in 2001                |  |                 |   |                               | 
|Outstanding at December 31, 2001 |  | 4,495,001        |   | $10.27                         | 
|                                 |  |                  |   |                               
|Exercisable at December 31, 2001 |  | 4,385,001        |   | $10.25                         | 
|                                 |  |                  |   |                               

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


Common stock dividends
declared and unpaid at December 31, 2001 and 2000 amounted to $1,517 and $1,034,
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. 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:
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                          |  | 2001    |  | 2000    |  | 1999    | 
|----------------------------------------- |  | ------- |  | ------- |  | ------- | 
|Net income as reported                    |  | $42,480 |  | $44,456 |  | $22,611 | 
|Net income pro forma                      |  | $42,360 |  | $44,423 |  | $18,681 | 
|Basic net income per share, as reported   |  | $1.55   |  | $1.62   |  | $0.82   | 
|Basic net income per share, pro forma     |  | $1.55   |  | $1.62   |  | $0.68   | 
|Diluted net income per share, as reported |  | $1.47   |  | $1.60   |  | $0.80   | 
|Diluted net income per share, pro forma   |  | $1.46   |  | $1.60   |  | $0.66   | 

|This pro forma impact only
takes into account options granted since January 1, 1995. The average fair value
of options granted during 2000 was $5.35 and $2.62, respectively. The fair value
was estimated using the Black-Scholes option pricing model based on the market
price at Grant Date of $11.94 and $6.38 in 2000, respectively, and the following
weighted average assumptions: risk-free interest rate of 5.97% and 6.70%,
expected life of 7 and 7 years, volatility of 37% and 37% and dividend yield of
1.3% and 2.4% in 2000, respectively. No options were granted by the Company in
2001.

47
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(dollars in
thousands, except per share amounts)


On November 9, 1999, the
Company authorized the repurchase up to 1,000,000 shares of its common stock.
The shares will be purchased from time to time through open market purchases or
privately negotiated transactions. During the fourth quarter of 2001, the
Company purchased 58,100 shares for an aggregate purchase price of $929. A total
of 158,500 shares were purchased by the Company during the fourth quarter 1999,
for an aggregate purchase price of $1,170.
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(18) |  | 2001
quarterly financial data (unaudited):
|---- |  | ------------------------------------------

|                                          | 1st | 2nd     | 3rd | 4th (a)
|----------------------------------------- | --- | ------- | --- | -------
|Revenues                                  |     | $76,468 |     | $77,653
|Income from continuing operations before  |    
|results from discontinued operations,     |    
|cumulative effect of change in accounting |    
|principle and extraordinary gain          |     | $11,035 |     | $12,208
|Basic income per share                    |     | $0.40   |     | $0.45  
|Diluted income per share                  |     | $0.38   |     | $0.42  

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

|                                          | 1st | 2nd     | 3rd | 4th (b)
|----------------------------------------- | --- | ------- | --- | -------
|Revenues                                  |     | $50,529 |     | $54,258
|Income from continuing operations before  |    
|results from discontinued operations,     |    
|cumulative effect of change in accounting |    
|principle and extraordinary gain          |     | $8,724  |     | $10,074
|Basic income per share                    |     | $0.32   |     | $0.37  
|Diluted income per share                  |     | $0.32   |     | $0.37  

| |  | (a) |  | Includes
the favorable impact of an adjustment to income earned on finance lease receivables of
$1,673 net of tax expense of $70, of which $1,119 net of tax expense of $47 relates to
prior years, as well as net gains on sales of equipment recovered from a bankrupt
customer of $1,364 net of tax expense of $57.
| |  | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  | (b) |  | 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.
| |  | --- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

None.

|48
|--

|PART III
|--------

|ITEM 10. |  | DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
|-------- |  | --------------------------------------------------

|Information required by
this Item 10 is hereby incorporated by reference to registrants definitive
proxy statement to be filed pursuant to Regulation 14A promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934,
which proxy statement is anticipated to be filed on or about March 28, 2002.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|ITEM 11. |  | EXECUTIVE COMPENSATION
|-------- |  | ----------------------

|Information required by
this Item 11 is hereby incorporated by reference to registrants definitive
proxy statement to be filed pursuant to Regulation 14A promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934,
which proxy statement is anticipated to be filed on or about March 28, 2002.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|ITEM 12. |  | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
|-------- |  | --------------------------------------------------------------

|Information required by
this Item 12 is hereby incorporated by reference to registrants definitive
proxy statement to be filed pursuant to Regulation 14A promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934,
which proxy statement is anticipated to be filed on or about March 28, 2002.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|ITEM 13. |  | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
|-------- |  | ----------------------------------------------

|Information required by
this Item 13 is hereby incorporated by reference to registrants definitive
proxy statement to be filed pursuant to Regulation 14A promulgated by the
Securities and Exchange Commission under the Securities Exchange Act of 1934,
which proxy statement is anticipated to be filed on or about March 28, 2002.


49
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|PART IV
|-------

|ITEM 14. |  | 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, 2001 and 2000
Consolidated Statements of Income for the Years Ended December 31, 2001, 2000 and 1999
Consolidated Statements of
Changes in Stockholders Equity for the Years Ended December 31, 2001, 2000
and 1999Consolidated Statements of Cash Flows for the Years Ended December 31,
2001, 2000 and 1999Notes to Consolidated Financial Statements


(a)(2)
FINANCIAL STATEMENT SCHEDULES


Schedule II  Valuation and
Qualifying Accounts


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


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

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

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

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

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

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

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

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

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

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

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

|50
|--

|
|

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

|51
|--

|
|

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

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

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

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

|10.27 |  | Indenture
between Interpool, Inc. and United States Trust Company of New York, as trustee, relating
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)).
|----- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.28 |  | Indenture
between Interpool, Inc. and United States Trust Company of New York, as trustee, related
to the 6-5/8% Notes, dated February 24, 1998 (incorporated herein by reference to the
Companys Registration Statement on Form S-4 (Reg. No. 333-56065)).
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.29 |  | Indenture
between the Company and IBJ Schroeder Bank & Trust Company, as Trustee, dated January 27,
1997 (incorporated herein by reference to the Companys Annual Report on Form 10-K for
the period ended 12/31/96).
|----- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.30 |  | First
Supplemental Indenture between Interpool, Inc. and IBJ Schroeder Bank & Trust Company
dated January 27, 1997 (incorporated herein by reference to the Registrants Annual
Report on Form 10-K for the period ended 12/31/96).
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.31 |  | Series
A Capital Securities Guarantee Agreement dated January 27, 1997 (incorporated herein by
reference to the Companys Annual Report on Form 10-K for the period ended 12/31/96).
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.32 |  | Agreement
of Merger dated March 15, 1996 among Trac Lease, Inc., Trac Lease Merger Corp. and the
Company (incorporated herein by reference to the Companys Annual Report on Form 10-K for
the period ended 12/31/95).
|----- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.33 |  | Letter
Agreement between The Ivy Group and the Company (incorporated herein by reference to the
Registrants Annual Report on Form 10-K for the period ended 12/31/95).
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.34 |  | 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).
|----- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.35 |  | 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).
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.36 |  | 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).
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.37 |  | 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).
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.38 |  | 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).
|----- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.39 |  | 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).
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.40 |  | 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).
|----- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.41 |  | 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).
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.42 |  | 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).
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.43 |  | Sale
and Purchase Agreement between between 211 College Road Associates and the Company.
|----- |  | -----------------------------------------------------------------------------------------

|52
|--

|
|

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

|21.1 |  | Subsidiaries
of the Company (incorporated herein by reference to the Companys Registration Statement
on Form S-1 (No. 333-66738) filed on August 3, 2001).
|---- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------

|99.1 |  | Press
Release dated October 16, 2001.
|---- | - | -------------------------------------

|99.2 |  | Press
Release dated October 31, 2001.
|---- | - | -------------------------------------

|99.3 |  | Press
Release dated November 1, 2001.
|---- | - | -------------------------------------

|99.4 |  | Press
Release dated November 6, 2001.
|---- | - | -------------------------------------

|99.5 |  | Press
Release dated November 6, 2001.
|---- | - | -------------------------------------

|99.6 |  | Press
Release dated November 20, 2001.
|---- | - | --------------------------------------

|99.7 |  | Press
Release dated December 19, 2001.
|---- | - | --------------------------------------

|99.8 |  | Press
Release dated February 27, 2002.
|---- | - | --------------------------------------

|99.9 |  | Press
Release dated February 28, 2002.
|---- | - | --------------------------------------

|99.10 |  | Press
Release dated March 22, 2002.
|----- | - | -----------------------------------

|99.11 |  | Letter
to Commission Pursuant to Temporary Note 3T.
|----- | - | ---------------------------------------------------

|53
|--

|(b) REPORTS ON
FORM 8-K


(b)(1) No reports on Form
8-K were filed during the fourth quarter of 2001.


54
|----------------------------------------------------------------------------------------------------------

|REPORT OF
INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULE


To the Stockholders of Interpool,
Inc.:


We have audited in
accordance with auditing standards generally accepted in the United States of
America, the consolidated financial statements of Interpool, Inc. and
subsidiaries included in this Form 10-K and have issued our report thereon dated
February 26, 2002. Our audit was made for the purpose of forming an opinion on
the basic financial statements taken as a whole. The accompanying Schedule II is
the responsibility of the Companys management and is presented for
purposes of complying with the Securities and Exchange Commissions rules
and is not part of the basic financial statements. The schedule has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, fairly states in all material respects the
financial data required to be set forth therein in relation to the basic
financial statements taken as a whole.


Arthur Andersen LLP



New York, New YorkFebruary 26, 2002


55
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|INTERPOOL,
INC. AND SUBSIDIARIESSCHEDULE
IIVALUATION AND QUALIFYING ACCOUNTSFOR THE
YEARS ENDED DECEMBER 31, 2001, 2000 and 1999


ALLOWANCE
FOR DOUBTFUL ACCOUNTS


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

|                             |  | Balance atBeginning ofYear |  | Charge toCosts andExpenses |  | Acquired |  | (Write-offs),Net ofRecoveries |   | Balance atEnd ofYear | 
|---------------------------- |  | -------------------------- |  | -------------------------- |  | -------- |  | ----------------------------- | - | -------------------- | 
|Year Ended December 31, 2001 |  | $14,271                    |  | $2,302                     |  |         |  | $(10,711                      | ) | $5,862               | 
|                             |  |                            |  |                            |  |          |  |                               |   |                     
|Year Ended December 31, 2000 |  | $10,260                    |  | $2,192                     |  | $1,281   |  | $538                          |   | $14,271              | 
|                             |  |                            |  |                            |  |          |  |                               |   |                     
|Year Ended December 31, 1999 |  | $4,632                     |  | $6,925                     |  |         |  | $(1,297                       | ) | $10,260              | 
|                             |  |                            |  |                            |  |          |  |                               |   |                     

|56
|--

|SIGNATURES


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

|March 28, 2002 |  | INTERPOOL, INC.(Registrant)By /s/ Martin  Tuchman      
Martin Tuchman
                                                            Chairman of the Board, Chief Executive Officer,
                                                            and Director (Principal Executive Officer)
|-------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

|March 28, 2002 |  | By /s/ Martin  Tuchman      
Martin Tuchman
                                                            Chairman of the Board, Chief Executive Officer,
                                                            and Director (Principal Executive Officer)
|-------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|March 28, 2002 |  | By /s/ Raoul J. Witteveen      
Raoul J. Witteveen
                                                            President, Chief Operating Officer and
                                                            Director
|-------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|March 28, 2002 |  | By /s/ Warren L. Serenbetz      
Warren L. Serenbetz Director
|-------------- |  | ---------------------------------------------------------------------------

|March 28, 2002 |  | By /s/ Mitchell I. Gordon      
Mitchell I. GordonChief Financial Officer, Executive
                                                            Vice President and Director
                                                            (Principal Financial Officer)
|-------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|March 28, 2002 |  | By /s/ Arthur L. Burns      
Arthur L. BurnsGeneral Counsel, Secretary and
                                                            Director
|-------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------

|March 28, 2002 |  | By /s/ Peter D. Halstead      
Peter D. HalsteadDirector
|-------------- |  | ----------------------------------------------------------------------

|March 28, 2002 |  | By /s/ Joseph J. Whalen      
Joseph J. WhalenDirector
|-------------- |  | --------------------------------------------------------------------

|March 28, 2002 |  | By /s/ Clifton H. W. Maloney      
Clifton H. W. MaloneyDirector
|-------------- |  | ------------------------------------------------------------------------------

|March 28, 2002 |  | By /s/ William Geoghan      
William GeoghanSenior Vice President (Principal Accounting Officer)
|-------------- |  | --------------------------------------------------------------------------------------------------------------

|57
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|EXHIBIT INDEX
|-------------

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

|58
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|
|

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

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

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

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

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

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

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

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

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

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

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

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

|10.27 |  | Indenture
between Interpool, Inc. and United States Trust Company of New York, as trustee, relating
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)).
|----- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.28 |  | Indenture
between Interpool, Inc. and United States Trust Company of New York, as trustee, related
to the 6-5/8% Notes, dated February 24, 1998 (incorporated herein by reference to the
Companys Registration Statement on Form S-4 (Reg. No. 333-56065)).
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.29 |  | Indenture
between the Company and IBJ Schroeder Bank & Trust Company, as Trustee, dated January 27,
1997 (incorporated herein by reference to the Companys Annual Report on Form 10-K for
the period ended 12/31/96).
|----- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.30 |  | First
Supplemental Indenture between Interpool, Inc. and IBJ Schroeder Bank & Trust Company
dated January 27, 1997 (incorporated herein by reference to the Registrants Annual
Report on Form 10-K for the period ended 12/31/96).
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.31 |  | Series
A Capital Securities Guarantee Agreement dated January 27, 1997 (incorporated herein by
reference to the Companys Annual Report on Form 10-K for the period ended 12/31/96).
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.32 |  | Agreement
of Merger dated March 15, 1996 among Trac Lease, Inc., Trac Lease Merger Corp. and the
Company (incorporated herein by reference to the Companys Annual Report on Form 10-K for
the period ended 12/31/95).
|----- | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|59
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|
|

|10.33 |  | Letter
Agreement between The Ivy Group and the Company (incorporated herein by reference to the
Registrants Annual Report on Form 10-K for the period ended 12/31/95).
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.34 |  | 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).
|----- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.35 |  | 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).
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.36 |  | 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).
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.37 |  | 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).
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.38 |  | 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).
|----- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.39 |  | 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).
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.40 |  | 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).
|----- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.41 |  | 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).
|----- | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.42 |  | 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).
|----- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|10.43 |  | Sale
and Purchase Agreement between between 211 College Road Associates and the Company.
|----- | - | ----------------------------------------------------------------------------------------

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

|21.1 |  | Subsidiaries
of the Company (incorporated herein by reference to the Companys Registration Statement
on Form S-1 (No. 333-66738) filed on August 3, 2001).
|---- | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------

|99.1 |  | Press
Release dated October 16, 2001.
|---- | - | -------------------------------------

|99.2 |  | Press
Release dated October 31, 2001.
|---- | - | -------------------------------------

|99.3 |  | Press
Release dated November 1, 2001.
|---- | - | -------------------------------------

|99.4 |  | Press
Release dated November 6, 2001.
|---- | - | -------------------------------------

|99.5 |  | Press
Release dated November 6, 2001.
|---- | - | -------------------------------------

|99.6 |  | Press
Release dated November 20, 2001.
|---- | - | --------------------------------------

|99.7 |  | Press
Release dated December 19, 2001.
|---- | - | --------------------------------------

|99.8 |  | Press
Release dated February 27, 2002.
|---- | - | --------------------------------------

|99.9 |  | Press
Release dated February 28, 2002.
|---- | - | --------------------------------------

|99.10 |  | Press
Release dated March 22, 2002.
|----- | - | -----------------------------------

|99.11 |  | Letter
to Commission Pursuant to Temporary Note 3T.
|----- | - | ---------------------------------------------------

|60
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