AT&T Capital Reports Strong 1994 Financial Results With Net Income Up 46%.

MORRISTOWN, N.J.--(BUSINESS WIRE)--Jan. 26, 1995--AT&T Capital Corporation (NYSE - TCC) today announced 1994 earnings of $100.3 million, a 46-percent increase from the $68.6 million reported for 1993. For the fourth quarter, net income totaled $40.6 million compared with $39.9 million for the similar 1993 period. Earnings per share were $.86 for the fourth quarter and $2.14 for the year-ended 1994.

Excluding the effect of the adoption of SFAS 109 ("Accounting for Income Taxes") and the impact of an increase in federal income tax rates on deferred tax balances in 1993, earnings for 1994 increased $17.4 million or 21 percent over 1993.

AT&T Capital's strong earnings growth in 1994 can be attributed primarily to continued improvement in the company's overall credit performance, a higher average level of finance assets and increased gains from equipment remarketing. The company's provision for credit losses decreased $42.8 million or 35 percent in 1994, compared to 1993. At the same time the level of write-offs and non-accruals substantially improved from 1993 levels. More important, allowance coverage of these asset quality indicators strengthened in 1994.

"Nineteen ninety-four was a remarkable year for AT&T Capital," said Tom Wajnert, the company's chairman and chief executive officer. "Bolstered by a strong economy, we experienced a lower level of losses, achieved higher earnings and realized solid financing volumes. Just as important, AT&T Capital completed a number of key acquisitions in Hong Kong and Canada as well as commenced business with offices in Mexico and Australia last year. In other words, we managed to achieve outstanding 1994 financial results and at the same time made important global strategic investments for tomorrow.

"We believe the strides we have made in 1994 position us well for the future as we seek to be the business partner of choice for leasing services worldwide."

The company's total U.S. and international non-AT&T businesses contributed $9 million of net income in 1994. That compares to a loss of $7.5 million, excluding the tax charges noted above, for those businesses in 1993. In terms of the company's total U.S. and international assets at December 31, 1994, non-AT&T businesses were 58 percent while customers of AT&T and AT&T as an end-user accounted for 35 percent and 7 percent, respectively.

Revenue after depreciation was $1.1 billion, a 4-percent increase from the $1.0 billion reported for 1993. The company's revenue growth is attributable to increases in average earning assets as well as strong secondary market activities, though partially offset by lower levels of equipment sales and an expected decrease in assets securitized.

In accordance with management's objectives, AT&T Capital reduced the amount of assets it securitized in 1994 by approximately $300 million or 54 percent. The company's gain on assets securitized in 1994 totaled $14.8 million versus $51.5 million in 1993. The lower gain can be attributed to a reduced number of assets securitized as well as some margin compression.

The company also announced that operating expenses relative to total assets continue to trend downward reaching 5.3 percent for 1994 compared with 6 percent at year-end 1993.

Total assets exceeded $8.0 billion at December 31, 1994, an increase of 25 percent from the $6.4 billion reported at December 31, 1993. For the year-ended 1994, equipment and loans financed reached $4.3 billion, an increase of 23 percent from 1993. In addition, several acquisitions contributed approximately $315 million to asset growth last year.

A majority owned subsidiary of AT&T Corp., AT&T Capital marked its first anniversary as a public company on July 28, 1994. The company's shares are traded on the New York Stock Exchange under the ticker symbol "TCC."

As the largest publicly owned equipment leasing and finance company in the United States, AT&T Capital leases and finances both AT&T and non-AT&T equipment to approximately 500,000 small, mid-sized and large businesses in the United States, Canada, Mexico, Europe, Australia and Hong Kong.

Note to Editors:

AT&T Capital will replay a tape of its presentation to analysts beginning Thursday, January 26 at 1 p.m. (EST). Chairman Thomas C. Wajnert and Chief Financial Officer Edward M. Dwyer will discuss the company's quarterly and year-end performance. To gain access to the replay, callers in North America should dial 800-495-5201. The access code is 3616. -0-

AT&T Capital Corporation Consolidated Statements of Income

(Dollars in Thousands except per share amounts)
(Unaudited)

                                 For the Three Months    For the Year
                                  Ended December 31    Ended December 31

                                   1994       1993      1994       1993

REVENUE:
Finance Revenue                  $  33,954 $  27,099   $120,800   $107,436
Capital Lease Revenue              133,329   106,194    477,875    391,985
Rental Revenue on Operating Leases 122,469   126,572    475,375    502,132
Equipment Sales                     29,580    48,077    126,567    161,529
Other Revenue                       58,151    76,368    183,462    196,507
TOTAL REVENUE                     $377,483  $384,310 $1,384,079 $1,359,589

EXPENSES:
Interest                         $  77,109 $  61,105   $271,812   $236,335
Operating and Administrative       115,784    99,302    427,187    381,515
Depreciation on Operating Leases    77,295    86,044    313,583    334,191
Cost of Equipment Sales             27,862    43,842    116,995    145,830
Provision for Credit Losses          9,614    29,219     80,888    123,678
TOTAL EXPENSES                    $307,664  $319,512 $1,210,465 $1,221,549

Income Before Income Taxes and
 Cumulative Effect of Accounting
 Change                             69,819    64,798    173,614    138,040

Provision for Income Taxes          29,229    24,945     73,278     66,530

Income before Cumulative Effect on
 Prior Years of Accounting Change   40,590    39,853    100,336     71,510

Cumulative Effect on Prior
 Years of Accounting Change             --        --         --     (2,914)

NET INCOME                         $40,590    $39,853  $100,336    $68,596

NET INCOME PER SHARE                  $.86       $.85     $2.14      $1.60

Number of Shares used to compute
 Net Income per share (thousands)   46,940     46,938    46,906     43,002

Other Key Financial Statistics
(dollars in thousands)

                                                   At December 31
                                              1994               1993

Debt to Equity                                5.51               4.61

Allowance/Net Write-offs                      3.18               2.71
Allowance/Non-Accruals                        1.46               1.00
Allowance/Net Investment                      2.30%              2.56%

Total Equity                            $1,008,218            924,443
Total Allowance                           $176,428           $159,819

Portfolio Assets:
Net Investment in Finance Receivables   $1,452,947         $1,197,303
Net Investment in Capital Leases        $5,129,326         $3,900,224
Net Investment in Operating Leases      $  902,525         $  979,278

Total Portfolio Assets                  $7,484,798         $6,076,805

Total Assets                            $8,021,923         $6,409,726
Total Managed Assets                    $2,659,526         $2,795,663

Total Owned & Managed Assets           $10,681,449         $9,205,389

CONTACT: AT&T Capital Corporation

David Caouette

201-397-8724 (office)

201-435-3494 (home)