=================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
Form 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
------------------------
For the Quarterly Period Ended Commission File Number
March 31, 1995 2-54754
General American Transportation Corporation
Incorporated in the IRS Employer Identification No.
State of New York 36-2827991
500 West Monroe Street
Chicago, Illinois 60661-3676
312/621-6200
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 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
---- ----
Registrant had 1,000 shares of common stock outstanding (all
owned by GATX Corporation) as of April 27, 1995.
=================================================================
<PAGE>
PART I--FINANCIAL INFORMATION
GENERAL AMERICAN TRANSPORTATION CORPORATION AND SUBSIDIARIES
-----------------
<TABLE>
<CAPTION>
CONSOLIDATED INCOME STATEMENTS (UNAUDITED)
In Millions
Three Months Ended
March 31
1995 1994
-------- --------
<S> <C> <C>
Gross income.................................... $ 175.2 $ 154.6
Costs and expenses
Operating expenses............................ 76.8 70.6
Interest...................................... 23.4 18.2
Provision for depreciation and
amortization................................ 30.0 26.9
Selling, general and
administrative.............................. 13.2 11.3
-------- -------
143.4 127.0
-------- -------
Income before income taxes and equity in net
earnings of affiliated companies.............. 31.8 27.6
Income taxes.................................... 13.6 10.6
-------- -------
Income before equity in net earnings of
affiliated companies......................... 18.2 17.0
Equity in net earnings of affiliated
companies................................... 5.0 3.7
------- -------
Net income...................................... $ 23.2 $ 20.7
======== ========
<FN>
Note - The consolidated balance sheet at December 31, 1994 has been
derived from the audited financial statements at that date. All other
consolidated financial statements are unaudited but include all
adjustments, consisting only of normal recurring items, which
management considers necessary for a fair statement of the consolidated
results of operations and financial position for the respective
periods. Operating results for the three months ended March 31, 1995
are not necessarily indicative of the results that may be achieved for
the entire year ending December 31, 1995.
</FN>
</TABLE>
-1-
<PAGE>
<TABLE>
<CAPTION>
GENERAL AMERICAN TRANSPORTATION CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
In Millions
ASSETS
March 31 December 31
1995 1994
(Unaudited)
<S> <C> <C>
Cash and cash equivalents................... $ 4.9 $ 14.5
Trade receivables - net..................... 45.8 52.3
Property, plant and equipment
Railcars and support facilities........... 1,949.4 1,857.4
Tank storage terminals and pipelines...... 1,166.1 1,171.8
-------- --------
3,115.5 3,029.2
Less - Allowances for depreciation........ (1,293.3) (1,274.3)
--------- ---------
1,822.2 1,754.9
Due from GATX Corporation................... 373.7 362.4
Investments in affiliated companies......... 189.6 182.1
Other assets................................ 99.7 100.4
-------- --------
TOTAL ASSETS $ 2,535.9 $ 2,466.6
========= =========
</TABLE>
-2-
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES, DEFERRED ITEMS AND SHAREHOLDER'S EQUITY
March 31 December 31
1995 1994
(Unaudited)
<S> <C> <C>
Accounts payable....................... $ 82.7 $ 106.4
Accrued expenses....................... 43.8 35.7
Debt
Short-term debt...................... 167.4 129.4
Long-term debt....................... 909.1 864.1
Capital lease obligations............ 117.9 121.8
------- --------
1,194.4 1,115.3
Deferred income taxes.................. 270.5 271.3
Other deferred items................... 229.3 234.5
------- --------
Total liabilities and deferred items 1,820.7 1,763.2
Shareholder's equity
Common Stock - par value $1 per share;
1,000 shares authorized, issued and
outstanding (owned by GATX Corporation). - -
Additional capital........................ 335.0 335.0
Reinvested earnings....................... 357.7 346.9
Cumulative foreign currency translation
adjustment............................. 22.5 21.5
------ -------
Total shareholder's equity 715.2 703.4
------- -------
TOTAL LIABILITIES, DEFERRED ITEMS
AND SHAREHOLDER'S EQUITY $ 2,535.9 $ 2,466.6
========= =========
</TABLE>
-3-
<PAGE>
<TABLE>
<CAPTION>
GENERAL AMERICAN TRANSPORTATION CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED)
In Millions
Three Months Ended
March 31
1995 1994
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 23.2 $ 20.7
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for depreciation and amortization 30.0 26.9
Deferred income taxes 7.3 3.7
Other (includes working capital) (22.8) (.2)
------- -------
NET CASH PROVIDED BY OPERATING ACTIVITIES 37.7 51.1
INVESTING ACTIVITIES
Additions to property, plant and equipment:
Railcars and support facilities (96.8) (60.0)
Tank storage terminals and pipelines (20.3) (27.0)
Investments in affiliated companies (.2) -
------- ------
Capital additions (117.3) (87.0)
Proceeds from other asset dispositions 14.4 2.6
------ ------
NET CASH USED IN INVESTING ACTIVITIES (102.9) (84.4)
FINANCING ACTIVITIES
Proceeds from issuance of long-term debt 50.0 -
Repayment of long-term debt (5.3) (3.3)
Net increase in short-term debt 38.5 49.8
Repayment of capital lease obligations (3.9) (2.1)
Cash dividends paid to GATX Corporation (12.4) (11.5)
Net increase in amount due from GATX Corporation (11.3) (4.8)
-------- ------
NET CASH PROVIDED BY FINANCING ACTIVITIES 55.6 28.1
-------- ------
NET DECREASE IN CASH AND CASH EQUIVALENTS $ (9.6) $ (5.2)
======== =======
</TABLE>
-4-
<PAGE>
MANAGEMENT'S DISCUSSION OF OPERATIONS
COMPARISON OF FIRST THREE MONTHS OF 1995 TO FIRST THREE MONTHS OF 1994
GENERAL
General American Transportation Corporation's (GATC's) net income
for the first quarter of 1995 was $23 million compared to net
income of $21 million for the first quarter of 1994. First
quarter gross income increased 13% while net income increased 12%
as a result of continuing strong performance at both
Transportation and Terminals and increased investment earnings.
Transportation continued to operate at high utilization rates
while at the same time adding significant numbers of railcars to
its fleet. Terminals' results improved due to increased demand
at many of its foreign terminals, earnings from recently acquired
terminal facilities, and strong chemical demand.
Cash provided by operating activities of $38 million decreased
$13 million from the first three months of 1994. The decrease
was principally due to changes in working capital.
Capital additions for the quarter totaled $117 million, up $30
million from the 1994 first quarter. Transportation invested $92
million in the railcar fleet, including $27 million for the
acquisition of used car fleets, versus $56 million in last year's
first quarter; in addition $5 million was expended on the service
center expansion compared to $4 million in 1994. Terminals'
capital spending of $20 million decreased $7 million from 1994,
which included the acquisition of a terminal facility in the
United Kingdom. Full year 1995 capital spending is forecasted to
exceed the $440 million expended in 1994. A portion of the 1995
expenditures may not be effected depending on market conditions.
It is anticipated that capital expenditures will be funded by
both internally generated funds and GATC's available external
financing sources.
GATC had available unused committed lines of credit in the amount
of $174 million at March 31, 1995. GATC has a $650 million shelf
registration for pass through trust certificates and debt
securities, under which $225 million of notes and $93 million of
pass through trust certificates have been issued as of quarter
end. GATC issued $50 million of ten-year medium-term notes
during the quarter.
-5-
<PAGE>
RESULTS OF OPERATIONS
Following is a discussion of the operating results of GATC's
business segments:
<TABLE>
<CAPTION>
RAILCAR LEASING AND MANAGEMENT (TRANSPORTATION)
- -----------------------------------------------------------------
Three Months Ended
(In Millions) March 31
1995 1994 Change
------- ------- --------------
<S> <C> <C> <C> <C>
Gross Income $ 85.5 $ 78.0 $ 7.5 10%
Net Income $ 14.8 $ 13.2 $ 1.6 12%
- -----------------------------------------------------------------
</TABLE>
Transportation's gross income for the first quarter of 1995
increased 10% from the comparable prior year period due to
additional railcars on lease as a result of the high level of
railcar additions as well as increased utilization, and slightly
higher lease rates. Fleet utilization at March 31, 1995 was 95%
on a fleet size of 61,200 compared to 93% on a fleet size of
56,400 a year ago. At quarter end, the active fleet totaled
57,800 compared to 52,600 a year ago.
Net income increased 12% from the first quarter of 1994 as higher
revenues and investment earnings were partially offset by
increased fleet repair costs and ownership costs. Operating
margins increased slightly as the growth in revenues exceeded the
increase in fleet repair costs. Fleet repair costs increased 8%
due to the increased fleet size and increased number of cars
repaired, primarily at GATX service centers. Ownership costs,
consisting of rental expense, depreciation and interest,
increased 19% due to the increased fleet size and higher interest
rates.
-6-
<PAGE>
<TABLE>
<CAPTION>
TERMINALS AND PIPELINES
- -----------------------------------------------------------------
Three Months Ended
(In Millions) March 31
1995 1994 Change
-------- ------- ---------------
<S> <C> <C> <C> <C>
Gross Income $ 81.3 $ 72.3 $ 9.0 12%
Net Income $ 8.4 $ 7.5 $ .9 12%
- -----------------------------------------------------------------
</TABLE>
Terminals' 1995 gross income increased 12% reflecting higher
pipeline revenues and incremental revenues from newly-acquired
terminals . Throughput for the first quarter was 153 million
barrels compared to 174 million barrels a year ago, largely
reflecting the mild winter which reduced petroleum needs and
tankage out of service as a result of flood damage in Texas which
occurred late last year. Capacity utilization at Terminals'
wholly-owned facilities was 91% compared to 94% at year end and
87% at the end of the first quarter of 1994.
Terminals' net income increased 12% from 1994. Higher revenues
were offset by additional expenses incurred at new facilities and
at pipeline operations. Further, SG&A increased due to
management restructuring, salary progression and additional
positions; interest expense grew from financing last
year's acquisitions. Operating margins decreased slightly due to
higher operating costs and depreciation. Equity in net earnings
of affiliated companies of $4 million increased $1 million as the
result of higher earnings at all of the affiliates, except for
one in Japan whose earnings were lower as a result of the
temporary shutdown of a terminal due to earthquake damage.
-7-
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
GATC has previously reported a number of lawsuits which have been
filed in the Superior Court for the State of California and
served upon Terminals, Calnev Pipe Line Company or another GATX
subsidiary seeking an unspecified amount of damages arising out
of the May 1989 explosion in San Bernardino, California. One of
those suits, Ledbetter, et al, v. City of San Bernardino, et al,
filed May 1990 (No. 256173) was settled in April 1995. It
remains management's opinion, based on information known to
management and taking into consideration probable insurance
recovery, that the ultimate resolution of the lawsuits arising
out of the May 1989 explosion will not have a material effect on
GATC's consolidated financial position or operations.
GATC has previously reported a potential action against Calnev
Pipe Line Company for allegedly failing to timely report the
purported release of hazardous materials. Calnev has entered
into a civil consent agreement with the San Bernardino California
District Attorney's office to settle the matter for a total
payment of $215,000 without admission of any violation.
Item 6. Exhibits and Reports on Form 8-K. Page
- ------------------------------------------ ----
(a) 4 General American Transportation Corporation
Notices 12 through 14 dated February 24, 1995,
defining the rights of the holders of GATC's
Medium-term Notes Series E issued during that
period, incorporated herein by reference to the
Form 424(b)(5) dated February 17, 1995, file
number 2-54754.
12 Statement regarding computation of ratios of
earnings to fixed charges. 10
27 Financial Data Schedule for GATC for the quarter
ended March 31, 1995 submitted to the SEC along
with the electronic submission of this Quarterly
Report on Form 10-Q.
Any instrument defining the rights of security holders
with respect to nonregistered long-term debt not being
filed on the basis that the amount of securities
authorized does not exceed 10 percent of the total
assets of the company and subsidiaries on a
consolidated basis will be furnished to the
Commission upon request.
(b) No reports on Form 8-K were filed during the reporting
period.
-8-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
GENERAL AMERICAN TRANSPORTATION CORPORATION
(Registrant)
/s/D. Ward Fuller
-------------------------
D. Ward Fuller
President, Chief Executive Officer
and Director
(Duly Authorized Officer)
/s/Donald J. Schaffer
--------------------------
Donald J. Schaffer
Vice President, Finance and Chief
Financial Officer
Date: May 10, 1995
-9-
<PAGE>
<TABLE>
<CAPTION>
Exhibit 12
GENERAL AMERICAN TRANSPORTATION CORPORATION
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
In Millions, Except For Ratios
Three Months Year Ended
Ended March 31 December 31
1995 1994 1994
------------------ -----------
(Unaudited)
<S> <C> <C> <C>
Earnings available for fixed charges:
Net income...................................... $ 23.2 $ 20.7 $ 87.0
Add (deduct):
Income taxes................................. 13.6 10.6 42.7
Equity in net earnings of affiliated
companies, net of distributions received... (4.2) (2.9) (14.2)
Interest on indebtedness and amortization
of debt discount and expense............... 23.4 18.2 78.3
Amortization of capitalized interest......... .3 .3 1.1
Portion of rents representative of interest
factor (deemed to be one-third)............ 4.4 3.4 16.8
------- ----- -----
Total earnings available for fixed charges...... $ 60.7 $ 50.3 $211.7
======= ====== ======
Fixed Charges:
Interest on indebtedness and amortization
of debt discount and expense................... $ 23.4 $ 18.2 $ 78.3
Capitalized interest............................. 1.5 .8 2.7
Portion of rents representative of interest
factor (deemed to be one-third)................. 4.4 3.4 16.8
Total fixed charges................................ $ 29.3 $ 22.4 $ 97.8
======= ====== ======
Ratio of earnings to fixed charges(A)............ 2.07x 2.25x 2.16x
<FN>
(A) The ratio of earnings to fixed charges represents the number of
times "fixed charges" are covered by "earnings." "Fixed charges"
consist of interest on outstanding debt and capitalized interest,
one-third (the proportion deemed representative of the interest
factor) of rentals, and amortization of debt discount and expense.
"Earnings" consist of consolidated net income before income taxes
and fixed charges, less equity in net earnings of affiliated
companies, net of distributions received.
</FN>
</TABLE>
-10-
<PAGE>
<TABLE>
<CAPTION>
Exhibit 12
GENERAL AMERICAN TRANSPORTATION CORPORATION
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
In Millions, Except For Ratios
Three Months Year Ended
Ended March 31 December 31
1995 1994 1994
---------------- ---------
(Unaudited)
<S> <C> <C> <C>
Earnings available for fixed charges:
Net income...................................... $ 23.2 $ 20.7 $ 87.0
Add (deduct):
Income taxes................................. 13.6 10.6 42.7
Equity in net earnings of affiliated
companies, net of distributions received... (4.2) (2.9) (14.2)
Interest on indebtedness and amortization
of debt discount and expense............... 23.4 18.2 78.3
Amortization of capitalized interest......... .3 .3 1.1
Portion of rents representative of interest
factor (deemed to be one-third)............ 4.4 3.4 16.8
------- ----- -----
Total earnings available for fixed charges...... $ 60.7 $ 50.3 $211.7
======= ====== ======
Fixed Charges:
Interest on indebtedness and amortization
of debt discount and expense................... $ 23.4 $ 18.2 $ 78.3
Capitalized interest............................. 1.5 .8 2.7
Portion of rents representative of interest
factor (deemed to be one-third)................. 4.4 3.4 16.8
Total fixed charges................................ $ 29.3 $ 22.4 $ 97.8
======= ====== ======
Ratio of earnings to fixed charges(A)............ 2.07x 2.25x 2.16x
<FN>
(A) The ratio of earnings to fixed charges represents the number of
times "fixed charges" are covered by "earnings." "Fixed charges"
consist of interest on outstanding debt and capitalized interest,
one-third (the proportion deemed representative of the interest
factor) of rentals, and amortization of debt discount and expense.
"Earnings" consist of consolidated net income before income taxes
and fixed charges, less equity in net earnings of affiliated
companies, net of distributions received.
</FN>
</TABLE>
-10-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Balance Sheet and Consolidated Income Statement and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 5
<SECURITIES> 0
<RECEIVABLES> 51
<ALLOWANCES> 5
<INVENTORY> 0
<CURRENT-ASSETS> 0<F1>
<PP&E> 3115
<DEPRECIATION> 1293
<TOTAL-ASSETS> 2536
<CURRENT-LIABILITIES> 0<F1>
<BONDS> 1027<F2>
<COMMON> 0
0
0
<OTHER-SE> 715
<TOTAL-LIABILITY-AND-EQUITY> 2536
<SALES> 0
<TOTAL-REVENUES> 175
<CGS> 0
<TOTAL-COSTS> 77<F3>
<OTHER-EXPENSES> 30<F4>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 23
<INCOME-PRETAX> 32<F5>
<INCOME-TAX> 14
<INCOME-CONTINUING> 23
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 23
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<FN>
<F1>Not applicable because GATC has an unclassified balance sheet.
<F2>This value consists of two components: Long-term Debt of 909 million and
Capital Lease Obligations of 118 million. Short-term Debt is not included in
this value.
<F3>This value represents Operating Expenses on the Consolidated Income
Statement.
<F4>This value consists of the Provision for Depreciation and Amortization on
the Consolidated Income Statement.
<F5>This value represents Income Before Income Taxes and Equity in Net
Earnings of Affiliated Companies.
</FN>
</TABLE>