AT&T Capital reports solid 1996 financial results with net income up 32.1 percent.

MORRISTOWN, N.J.--(BUSINESS WIRE)--Feb. 18, 1997--AT&T Capital Corporation today announced 1996 earnings of $168.5 million, a 32-percent increase from the $127.6 million reported for 1995.

"From a number of perspectives, 1996 was an incredible year for AT&T Capital," said Tom Wajnert, chairman and chief executive officer. "On October 1 we completed AT&T Capital's merger and, as a result of that transaction, senior management and a wholly owned subsidiary of GRS Holding, a U.K. rail leasing business, became the owners of the company. The $2.2 billion transaction was one of the largest of its kind.

"Also, in connection with the change in ownership, AT&T Capital made its inaugural launch into the public asset-backed securities market with a $3.1 billion securitization of lease and loan receivables -- a portion of the proceeds which were used to finance the merger transaction," he added.

"Through it all, AT&T Capital never lost focus on its business," Wajnert said. "We solidified our position as a leading global provider of vendor finance and last summer entered into a joint venture with Sembawang Capital Pte Ltd., the leasing subsidiary of Sembawang Corp. The 50/50 joint venture provides a full range of vendor financing services to local, multinational and global manufacturers in the ASEAN region.

"From the direct customer finance side of our business, we were pleased to announce a joint venture with American Express in December," he said. "American Express CapitaFinance is a 50/50 joint venture that provides equipment financing to small business owners throughout the country. It's a well-suited match -- American Express, with its 1.6 million corporate card holders and exceptional marketing expertise, coupled with AT&T Capital's world-class credit and operational prowess."

The company's 1996 revenue was $2.0 billion, a 23.8-percent increase from 1995 revenue of $1.6 billion. Excluding securitization revenue, and adding back an estimate of lost revenue on assets securitized, the company estimates that revenue would have been approximately $1.9 billion, a 21.4-percent increase over 1995.

AT&T Capital's strong earnings growth in 1996 can be attributed primarily to a significant increase in securitization revenue. Largely as a result of securitization activities, the company's 1996 securitization revenue increased $143.5 million to total $149.3 million. Increased portfolio revenue, supported by a higher average level of net portfolio assets, also augmented earnings. Earnings growth was tempered, though, by a $90.8 million increase in operating and administrative expenses caused principally by one-time merger-related costs.

AT&T Capital's total non-AT&T/Lucent/NCR businesses contributed 32 percent or $54.3 million of net income in 1996. This represents an eight percentage point-increase over the 24 percent or $30.5 million of net income contributed by non-AT&T/Lucent/NCR businesses in 1995. Had the merger and securitization not occurred, the company estimates that the non-AT&T/Lucent/NCR related business would have contributed approximately 34 percent of net income. This estimate assumes the exclusion of the securitization gain and one-time merger related costs, adds back revenue which would have been recognized on the assets sold, and adjusts interest expense for significant merger and securitization related events.

Including one-time merger related costs, the company's operating and administrative expenses as a percent of total owned and managed assets ("O&A / owned and managed assets") at December 31, 1996 was 4.38 percent compared with 4.03 percent at year-end 1995. Excluding one-time merger-related costs, the company's 1996 O&A / owned and managed assets was 3.97 percent.

The company's provision for credit losses increased $27.4 million, or 31.8 percent for 1996 versus 1995, primarily due to increased volume and write-offs. The company maintains an allowance for credit losses that considers probable credit losses within the portfolio. Management believes that the company's overall allowance in relation to the portfolio is adequate. The company's allowance as a percentage of portfolio assets was 2.30 percent at December 31, 1996 compared to 2.39 percent at December 31, 1995. Average net portfolio assets increased $600.1 million for 1996, a 7.2-percent increase over 1995.

Primarily as a result of the securitization, total assets dropped to $8.1 billion at December 31, 1996, a decrease of 15.2 percent from the $9.5 billion reported at December 31, 1995. Total owned and managed assets increased to $12.9 billion at December 31, 1996, a 9.6-percent increase from the $11.8 billion reported at December 31, 1995. For the year-ended 1996, volume was a record $5.2 billion, an increase of 14.9 percent from 1995.

AT&T Capital, formerly majority-owned by AT&T, is now a privately held company that provides diversified equipment leasing, financing, and related services to approximately 500,000 commercial customers in the United States, Europe, Canada, the Asia/Pacific region, Mexico, and South America.

AT&T Capital will continuously replay a tape of its 1996 earnings conference call beginning Tuesday, February 18, at 2 p.m. EST  until midnight, February 25. Chairman and Chief Executive Officer Thomas C. Wajnert and Chief Financial Officer Edward M. Dwyer will discuss the company's fourth quarter and year-end financial results. The replay of the call is expected to run about 30 minutes.

Members of the financial community can access the replay by calling:

Within the United States 800-475-6701 code: 331034

Outside the United States 320-365-3844 code: 331034

Callers who have any questions after listening to the replay, or would like to request copies of the company's financial information, should call Investor Relations at 201-397-4444 -0-

       AT&T Capital Corporation Consolidated Statements of Income

           (Dollars in Thousands, except per share amounts)

                       For the Three Months          For the Year
                         Ended December 31         Ended December 31
                                           %                            %
                       1996     1995(a)  Change    1996      1995(a)  Change
REVENUE:
Finance Revenue     $ 54,847  $ 46,698    17.5   $204,204   $174,523   17.0
Capital Lease
 Revenue             105,846   158,044   (32.9)   598,203    586,141    2.1
Rental Revenue on
 Operating Leases    191,640   149,795    27.9    697,020    560,964   24.3
Revenue from
 securitizations
 and loan sales      151,044     8,329  1713.5    164,899     16,374  907.1
Equipment Sales       18,023    21,367   (15.7)    90,631     48,724   86.0
Other Revenue         60,296    52,150    15.6    197,233    190,309    3.6
TOTAL REVENUE       $581,696  $436,383    33.3  1,952,190  1,577,035   23.8

EXPENSES:
Interest            $107,680  $110,149    (2.2)  $458,039   $411,040   11.4
Operating and
 Administrative      189,317   122,220    54.9    564,489    473,663   19.2
Depreciation on
 Operating Leases    126,259    95,021    32.9    455,595    354,509   28.5
Cost of Equipment
 Sales                16,861    18,175    (7.2)    78,538     43,370   81.1
Provision for Credit
 Losses               42,151    25,855    63.0    113,605     86,214   31.8
TOTAL EXPENSES      $482,268  $371,420    29.8  1,670,266  1,368,796   22.0

Distributions on
 company-obligated
 preferred securities
 of subsidiary         3,322       ---     ---      3,322        ---    ---

Income Before
 Income Taxes         96,106    64,963    47.9    278,602    208,239   33.8

Provision for
 Income Taxes         42,857    22,874    87.4    110,063     80,684   36.4

NET INCOME           $53,249   $42,089    26.5   $168,539   $127,555   32.1

(a) Certain 1995 amounts have been reclassified to conform to the
1996 presentation
-0-

OTHER KEY FINANCIAL STATISTICS
(Dollars in Thousands)

                                        December 31    December 31     %
                                            1996           1995      Change

Allowance/Net Write-offs                    1.96           4.77
Allowance/Non-Accruals                      1.25           1.88
Allowance/Portfolio Assets                  2.30%          2.39%

Total Equity plus company-obligated
 preferred securities of subsidiary    $ 907,307    $ 1,116,125       (18.7)
Total Equity                             707,307      1,116,125       (36.6)
Total Allowance                          168,986        223,220       (24.3)
Net Portfolio Assets:
Net Investment in Finance Receivables  2,135,250      1,800,636        18.6
Net Investment in Capital Leases       3,648,731      6,187,131       (41.0)
Net Investment in Operating Leases     1,403,470      1,117,636        25.6
Total Net Portfolio Assets             7,187,451      9,105,403       (21.1)

Total Assets                           8,092,512      9,541,259       (15.2)
Total Managed Assets                   4,790,972      2,214,502       116.3

Total Owned and Managed Assets       $12,883,484    $11,755,761         9.6

Debt to Equity plus company-obligated
 preferred securities of subsidiary         7.13           6.22
Debt to Equity                              9.14           6.22

CONTACT: David P. Caouette

201-397-8724 (office)

201-435-3494 (home)