AT&T Capital Reports Third Quarter Net Income of $40.5 million, Up 25%.

MORRISTOWN, N.J.--(BUSINESS WIRE)--Oct. 15, 1996--AT&T Capital Corporation today announced third quarter 1996 net income of $40.5 million, a 25-percent increase from the $32.5 million reported for the third quarter of 1995. For the first nine months of 1996, net income grew to $115.3 million, a 35-percent rise compared with the $85.5 million reported for the similar period in 1995. Earnings per share were $.85 for the third quarter of 1996 and $2.43 for the first nine months of 1996.

On October 1, 1996 the company completed its merger with a majority-owned subsidiary of GRS Holding Company Ltd. (GRSH), owner of a U.K. rail leasing company. Following the merger, the company is owned by a leasing consortium composed of certain members of AT&T Capital's senior management, led by Chairman and CEO Tom Wajnert, and GRSH. The pro forma impacts of the merger and related transactions, are included in a report on Form 8-K that was filed with the Securities and Exchange Commission on October 15, 1996.

AT&T Capital's strong earnings growth for the third quarter of 1996 can be attributed primarily to increased income associated with a higher level of average earning assets.

Total revenues were $470.6 million for the third quarter of 1996, an increase of 19 percent when compared to the $395.9 million reported for the same period in 1995. For the first nine months of 1996, total revenues were $1,370.5 million, a 20-percent increase from the $1,140.7 million reported for the same period in 1995.

AT&T Capital's maturing non-AT&T/Lucent Technologies businesses continue to provide greater contributions to company profitability. For the third quarter, non-AT&T/Lucent businesses contributed $16.5 million or 41 percent of net income, a significant increase from the $10.5 million, or 32-percent level, reported for the same period in 1995. For the first nine months of 1996, total non-AT&T/Lucent businesses contributed $37.7 million or 33-percent of net income, up from the 16-percent level reported for the first nine months of 1995. Non-AT&T/Lucent-related assets accounted for 68 percent of the company's total assets at September 30, 1996, up slightly from December 31, 1995.

The company also continues to improve its operating efficiency. At September 30, 1996, AT&T Capital's operating expense to asset ratio was 4.88 percent, which compares favorably with a ratio of 5.19 percent at September 30, 1995. As a percentage of total owned and managed assets, AT&T Capital's operating expense ratio was 4.03 percent at September 30, 1996, versus 4.09 percent for the comparable prior year period.

Year-to-date September 30, 1996 charge-offs of approximately $63.4 million (which includes one large financing transaction of $11.2 million charged-off in the third quarter of 1996) were reflected in the decline in the company's allowance to net write-offs and allowance to investment in portfolio assets ratio.

Total assets were $10.3 billion at September 30, 1996, a 7- percent increase from the $9.5 billion reported at December 31, 1995. Total owned and managed assets were $12.4 billion at September 30, 1996, up from $11.8 billion reported at December 31, 1995. For the quarter ended September 30, 1996, equipment and loans financed (volume) were $1.3 billion versus $1.1 billion for the comparable prior year quarter. For the first nine months of 1996, volume totaled $3.8 billion, a 22-percent increase when compared with the $3.1 billion reported for the first nine months of 1995.

As a leading, worldwide, diversified equipment leasing and finance company, AT&T Capital leases and finances equipment to approximately 500,000 businesses of all sizes in the United States, Canada, Mexico, Europe, Australia and Hong Kong. -0-

          AT&T Capital Corporation Consolidated Statements of Income
                  (Dollars in Thousands, except per share amounts)

                       For the Three Months     For the Nine Months
                        Ended September 30       Ended September 30
                                        %                            %
                       1996     1995   Change    1996       1995
Change REVENUES:
Finance Revenue       $ 52,393 $ 46,793  12%   $ 149,357  $ 127,825  17%
Capital Lease Revenue  169,148  150,427  12      492,357    428,097  15
Rental Revenue on
 Operating Leases      179,894  141,800  27      505,380    411,169  23
Equipment Sales         24,012   10,375 131       72,608     27,356 165
Other Revenue, Net      45,162   46,486  (3)     150,792    146,204   3
TOTAL REVENUES         470,609  395,881  19    1,370,494  1,140,651  20
EXPENSES:
Interest               120,288  106,086  13      350,359    300,891  16
Operating and
 Administrative        126,762  116,456   9      375,172    351,443   7
Depreciation on
 Operating Leases      117,394   88,328  33      329,336    259,487  27
Cost of Equipment
 Sales                  21,018    9,896 112       61,677     25,195 145
Provision for Credit
 Losses                 22,918   20,681  11       71,454     60,359  18
TOTAL EXPENSES         408,380  341,447  20    1,187,998    997,375  19
Income Before
 Income Taxes           62,229   54,434  14      182,496    143,276  27
Provision for
 Income Taxes           21,762   21,962   1       67,206     57,810  16
NET INCOME             $40,467  $32,472  25%    $115,290    $85,466  35%
EARNINGS PER SHARE       $.85      $.69            $2.43      $1.82
Number of Shares used
 to compute Earnings
 per share (thousands)  47,565   47,195           47,497     47,063

Other Key Financial
 Statistics
(dollars in thousands)

                                  At September 30,   At December 31,  %
                                        1996              1995       Change

Debt to Equity                          6.50              6.22
Allowance/Net Write-offs                3.08              4.77
Allowance/Non-Accruals                  1.59              1.88
Allowance/Investment in Portfolio Assets 2.34%            2.39%
Total Equity                     $ 1,217,802       $ 1,116,125         9%
Total Allowance                  $   235,205       $   223,220         5%
Net Portfolio Assets:
Net Investment in Finance
 Receivables                     $ 2,017,835       $ 1,800,636        12%
Net Investment in Capital Leases   6,503,112         6,187,131         5
Net Investment in Operating Leases 1,284,868         1,117,636        15
Total Net Portfolio Assets       $ 9,805,815       $ 9,105,403         8%
Total Assets                     $10,251,600       $ 9,541,259         7%
Total Managed Assets               2,159,316        2,214,502         (2)
Total Owned & Managed Assets     $12,410,916      $11,755,761          6%

CONTACT: David P. Caouette

201-397-8724 (office)

201-435-3494 (home)