Fitch Ratings Affirms XTRA At 'BBB+/F1+'; Rating Outlook Stable.

Business Editors

NEW YORK--(BUSINESS WIRE)--Nov. 14, 2002

Fitch Ratings has affirmed XTRA Inc.'s (XTRA) 'BBB+' senior unsecured debt rating and 'F1+' commercial paper rating. The Rating Outlook is Stable. Approximately $479 million of outstanding debt securities are impacted by Fitch's action.

The commercial paper rating reflects an unconditional guarantee by Berkshire Hathaway Inc. (BH) (long-term rated 'AAA' by Fitch) following BH's September 2001 acquisition of XTRA. The guarantee also extends to XTRA's $165 million 5-year revolving credit facility. However, XTRA's $479 million senior unsecured notes are not subject to the guarantee and have maturities extending beyond the expiration of the revolving credit facility and are therefore rated on a stand-alone basis. While Fitch believes it is probable that BH would support XTRA during a liquidity event, due to the lack of an explicit guarantee and the non-core nature of XTRA's operations relative to BH, the senior unsecured rating does not receive a benefit from BH ownership.

XTRA's stand-alone senior unsecured rating is based on the company's top 2 market share in its core over-the-road (OTR) trailer leasing business. XTRA maintains a strong domestic presence, operating at 95 locations throughout North America. Rating strengths also center on XTRA's good risk-adjusted capitalization, solid cash flow, low leverage stemming from a lack of material equipment acquisition activity over the last 18-24 months, and historically sound long-term operating performance.

Rating strengths are tempered by low utilization across XTRA's equipment fleet resulting from weak general economic conditions. Stemming from low utilization rates, XTRA generated a modest net loss during the first-half of 2002, which is generally a weaker season due to cyclicality of demand for the company's services. However, improved utilization metrics for the third quarter suggest that the declining utilization trend may have hit a floor. Rating concerns also center on XTRA's ability to maintain competitiveness against other market participants with significantly greater financial flexibility. This concern is partially offset by XTRA's ownership by BH, which Fitch believes may provide support should the company identify opportunities to expand its business.

Additional concerns focus on losses stemming the sale of marine containers. XTRA's marine container business has been in run-off mode since June 1999. As a function of both declining new container prices and an industry-wide overcapacity of used containers, XTRA's equipment sales have been at a discount relative to net book value. However, when this loss is extrapolated over the entire marine container fleet and subtracted from equity, leverage remains acceptable and within XTRA's historical range. XTRA's marine container business is being managed by Textainer, Inc., which has a significant market share in the marine container leasing business.

Based in Westport, CT, XTRA, Inc. is the principal operating subsidiary of XTRA Corp., a transportation equipment holding company. XTRA leases a diverse fleet of more than 200,000 units constituting a net investment of over $1 billion, consisting of over-the-road trailers and intermodal equipment including chassis, intermodal trailers and domestic containers; and marine containers.

Based in Omaha, NE, Berkshire Hathaway Inc. is a holding company owning subsidiaries engaged in a number of diverse business activities. The most important of these is the property and casualty insurance business conducted on both a direct and reinsurance basis through a number of subsidiaries.