SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-2328
GATX Corporation
Incorporated in the IRS Employer Identification Number
State of New York
36-1124040
500 West Monroe Street
Chicago, Illinois 60661-3676
312/621-6200
Securities Registered Pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class or series on which registered
Common Stock New York Stock Exchange
Chicago Stock Exchange
London Stock Exchange
$2.50 Cumulative Convertible Preferred Stock New York Stock Exchange
Chicago Stock Exchange
$2.50 Cumulative Convertible Preferred New York Stock Exchange
Stock, Series B Chicago Stock Exchange
$3.875 Cumulative Convertible Preferred StockNew York Stock Exchange
Chicago Stock Exchange
Securities Registered Pursuant to Section 12(g) of the Act:
None
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. X
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
As of March 4, 1994, 19,809,722 common shares were outstanding, and the
aggregate market value of the common shares (based upon the March 4, 1994
closing price of these shares on the New York Stock Exchange) of GATX
Corporation held by nonaffiliates was approximately $864.2 million.
Documents Incorporated by Reference
Portions of the GATX Annual Report to Shareholders for the year ended
December 31, 1993 are incorporated by reference into Parts I and II.
Portions of GATX's proxy statement dated March 11, 1994 are
incorporated by reference into Part III.
<PAGE>
PART I
Item 1. Business
GATX Corporation is a holding company whose subsidiaries engage in the leasing
and management of railroad tank cars and specialized freight cars; provide
equipment and capital asset financing and related services; own and operate tank
storage terminals, pipelines and related facilities; engage in Great Lakes
shipping; and provide distribution and logistics support services, warehousing
facilities, and related real estate services. Information concerning financial
data of business segments and the basis for grouping products or services is
contained in Exhibit 13, GATX Annual Report to Shareholders for the year ended
December 31, 1993 on page 27 and pages 32 through 35, which is incorporated
herein by reference (page references are to the Annual Report to Shareholders).
Industry Segments
Railcar Leasing and Management
The Railcar Leasing and Management segment (Transportation) is principally
engaged in leasing specialized railcars, primarily tank cars, under full service
leases. As of December 31, 1993, its fleet consisted of approximately 55,800
railcars, including 48,000 tank cars and 7,800 specialized freight cars,
primarily Airslide covered hopper cars and plastic pellet cars. Transportation
has upgraded its fleet over time by adding new larger capacity cars and retiring
older, smaller capacity cars. Transportation's railcars have a useful life of
approximately 30 to 33 years. The average age of the railcars in
Transportation's fleet is approximately 15 years.
The following table sets forth the approximate tank car fleet capacity of
Transportation as of the end of each of the years indicated and the number of
cars of all types added to Transportation's fleet during such years:
<TABLE>
<CAPTION>
Year Ended December 31,
1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Tank car fleet capacity
(in millions of gallons) 1,024 993 977 964 939
Number of cars added to fleet 3,000 1,600 1,500 1,700 2,900
</TABLE>
Transportation's customers use its railcars to ship over 700 different
commodities, primarily chemicals, petroleum, food products and minerals. For
1993, approximately 55% of railcar leasing revenue was attributable to shipments
of chemical products, 21% to petroleum products, 18% to food products and 6% to
other products. Many of these products require cars with special features;
Transportation offers a wide variety of sizes and types of cars to meet these
needs. Transportation leases railcars to over 700 customers, including major
chemical, oil, food and agricultural companies. No single customer accounts for
more than 6% of total railcar leasing revenue.
Transportation typically leases new equipment to its customers for a term of
five years or longer, whereas renewals or leases of used cars are typically for
periods ranging from less than a year to seven years with an average lease term
of about three years. The utilization rate of Transportation's railcars as of
December 31, 1993 was approximately 93%.
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<PAGE>
Under its full service leases, Transportation maintains and services its
railcars, pays ad valorem taxes, and provides many ancillary services. Through
its Car Status Service System, for example, the company provides customers with
timely information about the location and readiness of their leased cars to
enhance and maximize the utilization of this equipment. Transportation also
maintains a network of service centers consisting of four major service centers
and 23 mobile trucks in 16 locations. Transportation also utilizes independent
third-party repair shops.
Transportation purchases most of its new railcars from Trinity Industries, Inc.
(Trinity), a Dallas-based metal products manufacturer, under a contract entered
into in 1984 and extended from time to time thereafter, most recently in 1992.
Transportation anticipates that through this contract it will continue to be
able to satisfy its customers' new car lease requirements. Transportation's
engineering staff provides Trinity with design criteria and equipment
specifications, and works with Trinity's engineers to develop new technology
where needed in order to upgrade or improve car performance or in response to
regulatory requirements.
The full-service railcar leasing industry is comprised of Transportation, Union
Tank Car Company, General Electric Railcar Services Corporation, Shippers Car
Line division of ACF Industries, Incorporated, and many smaller companies. Of
the approximately 192,000 tank cars owned and leased in the United States at
December 31, 1993, Transportation had approximately 48,000. Principal
competitive factors include price, service and availability.
Financial Services
GATX Financial Services, through its principal subsidiary, GATX Capital
Corporation, provides asset-based financing of transportation and industrial
equipment through capital leases, secured equipment loans, and operating leases.
GATX Capital also provides related financial services which include the
arrangement of lease transactions for investment by other lessors and the
management of lease portfolios for third parties. In these underwriting and
management activities, GATX Capital seeks fee income and residual participation
income. In addition to its San Francisco headquarters, GATX Capital has offices
in six foreign countries.
The financial services industry is both crowded and efficient. GATX Capital is
one of the larger non-bank capital services companies. Capital competes with
captive leasing companies, leasing subsidiaries of commercial banks, independent
leasing companies, lease underwriters and brokers, investment bankers, and also
with the manufacturers of equipment. Financing companies compete on the basis
of service and effective rates.
GATX Capital participates in selected areas where it believes the application of
its strengths can result in above-market returns in exchange for assuming
appropriate levels of risk. GATX Capital has developed a portfolio of assets
diversified across industries and equipment classifications, the largest of
which include air and rail. At December 31, 1993, GATX Capital had
approximately 750 financing contracts with 500 customers, aggregating $1.3
billion of investments before reserves. Of this amount, 47% consisted of
investments associated with commercial jet aircraft, 15% railroad equipment, 8%
real estate, 8% golf courses, 7% warehouse and production equipment, 6% marine
equipment and 9% other equipment.
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<PAGE>
Terminals and Pipelines
GATX Terminals Corporation (Terminals) is engaged in the storage, handling and
intermodal transfer of petroleum and chemical commodities at key points in the
bulk liquid distribution chain. All of its terminals are located near major
distribution and transportation points and most are capable of receiving and
shipping bulk liquids by ship, rail, barge and truck. Many of the terminals are
also linked with major interstate pipelines. In addition to storing, handling
and transferring bulk liquids, Terminals provides blending and testing services
at most of its facilities. Terminals also owns or holds interests in four
refined product pipeline systems. As of December 31, 1993, Terminals owned and
operated 27 terminals in 14 states, nine of which are associated with Terminals'
pipeline interests, and eight facilities in the United Kingdom; Terminals also
had joint venture interests in 12 international facilities.
As of December 31, 1993, Terminals had a total storage capacity of 71 million
barrels. This includes 53 million barrels of bulk liquid storage capacity in
the United States, 6 million barrels in the United Kingdom, and an equity
interest in another 12 million barrels of storage capacity in Europe and the Far
East. Terminals' smallest bulk liquid facility has a storage capacity of
100,000 barrels while its largest facility, located in Pasadena, Texas, has a
capacity of over 12 million barrels. During 1993, Terminals handled
approximately 635 million barrels of product through its wholly-owned bulk
liquid storage facilities, with capacity utilization of 92% at the end of 1993.
For 1993, 77% of Terminals' revenue was derived from petroleum products and 20%
from a variety of chemical products. Demand for Terminals' facilities is
dependent in part upon demand for petroleum and chemical products and is also
affected by refinery output, foreign imports, and the expansion of its customers
into new geographical markets.
Terminals serves nearly 200 customers, including major oil and chemical
companies as well as trading firms and larger independent refiners. No single
customer accounts for more than 7% of Terminals' revenue. Customer service
contracts are both short term and long term.
Terminals along with two Dutch companies, Paktank N.V. and Van Ommeren N.V., are
the three major international public terminalling companies. The domestic
public terminalling industry consists of Terminals, Paktank Corporation,
International-Matex Tank Terminals, and many smaller independent terminalling
companies. In addition to public terminalling companies, oil and chemical
companies, which generally do not make their storage facilities available to
others, also have significant storage capacity in their own private facilities.
Terminals' pipelines compete with rail, trucks and other pipelines for movement
of liquid petroleum products. Principal competitive factors include price,
location relative to distribution facilities, and service.
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<PAGE>
Great Lakes Shipping
American Steamship Company (ASC), with the largest carrying capacity of the
domestic Great Lakes vessel fleets, provides modern and efficient waterborne
transportation of dry bulk materials to the integrated steel, electric utility
and construction industries. ASC's fleet is entirely comprised of self-
unloading vessels which do not require any shoreside assistance to discharge
cargo. ASC's eleven vessels range in size from 635 feet to 1,000 feet,
transport cargoes from 17,000 net tons up to 70,000 net tons depending on vessel
size, and can unload at speeds from 2,800 net tons per hour up to 10,000 net
tons per hour. Because the Great Lakes are fresh water, Great Lakes vessels are
not subject to the severe rusting condition typical of salt water vessels. As a
result, ASC's vessels have expected lives of 50 to 75 years.
In 1993, ASC carried 24.4 million tons of cargo. The primary materials ASC
transported were iron ore, coal and limestone aggregates. Other commodities
transported include sand, salt, potash, gypsum, marble chips and slag. ASC
competes with three other U.S. flag Great Lakes commercial fleets, which include
U.S.S. Great Lakes Fleet, Inc., Columbia Transportation, and Interlake
Steamship, and with all steel companies which operate captive fleets. Great
Lakes shipping is the only major activity of GATX which consumes substantial
quantities of petroleum products; fuel for these operations is presently in
adequate supply. Competition is based primarily on service and price. ASC is
headquartered in Buffalo, New York, with one regional office. No single
customer accounts for more than 21% of ASC's revenue.
Logistics and Warehousing
GATX Logistics, Inc. (Logistics) is the largest third-party provider in the
United States of distribution and logistics support services, warehousing
facilities, and related real estate services. Logistics operates 119 facilities
and approximately 22 million square feet of warehousing space in North America
with utilization of 94 percent at the end of 1993. Value-adding services are
strategically the most important benefit GATX Logistics provides. Examples of
these services are logistics planning, information systems, just-in-time
delivery systems, packaging, sub-assembly, and returns management.
GATX Logistics serves about 750 customers, many of which are Fortune 1000-type
companies. Most customers are manufacturers, but the customer base also
includes retailers. In the warehousing sector, GATX Logistics competes
primarily with in-house or private operations and with other national operators
as well as multi-regional and local operators. In providing transportation and
logistics services, GATX Logistics competes with the major trucking companies
and providers of specialized distribution services.
GATX Logistics' revenue source by industry served during 1993 was 30% consumer
products, 20% grocery, 11% farm and construction equipment, 10% motor vehicle
parts and components, 5% major appliances, 5% health care, 4% electronics and
15% other. No single customer accounts for more than 8% of Logistics' revenue.
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<PAGE>
Trademarks, Patents and Research Activities
Patents, trademarks, licenses, and research and development activities are
not material to these businesses taken as a whole.
Seasonal Nature of Business
Great Lakes shipping is seasonal due to the effects of winter weather
conditions. However, seasonality is not considered significant to the
operations of GATX and its subsidiaries taken as a whole.
Customer Base
GATX and its subsidiaries are not dependent upon a single customer or a few
customers. The loss of any one customer would not have a material adverse
effect on any segment or GATX as a whole.
Employees
GATX and its subsidiaries have approximately 5,500 active employees, of whom
25% are hourly employees covered by union contracts.
Environmental Matters
Certain of GATX's operations present potential environmental risks principally
through the transportation or storage of various commodities. Recognizing that
some risk to the environment is intrinsic to its operations, GATX is committed
to protecting the environment, as well as complying with applicable
environmental protection laws and regulations. GATX, as well as its
competitors, is subject to extensive regulation under federal, state and local
environmental laws which have the effect of increasing the costs and liabilities
associated with the conduct of its operations. In addition, GATX's foreign
operations are subject to environmental regulations in effect in each respective
jurisdiction.
GATX's policy is to monitor and actively address environmental concerns in a
responsible manner. GATX has received notices from the U.S. Environmental
Protection Agency (EPA) that it is a potentially responsible party (PRP) for
study and clean-up costs at 11 sites under the requirements of the Federal
Comprehensive Environmental Response, Compensation and Liability Act of 1980
(Superfund). Under Superfund and comparable state laws, GATX may be required to
share in the cost to clean-up various contaminated sites identified by the EPA
and other agencies. In all but one instance, GATX is one of several financially
responsible PRPs and has been identified as contributing only a small percentage
of the contamination at each of the sites. Due to various factors such as the
required level of remediation and participation in clean-up efforts by others,
GATX's total clean-up costs at these sites cannot be predicted with certainty;
however, GATX's best estimates for remediation and restoration of these sites
have been determined and are included in its environmental reserves.
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<PAGE>
Future costs of environmental compliance are indeterminable due to unknowns such
as the magnitude of possible contamination, the timing and extent of the
corrective actions that may be required, the determination of the company's
liability in proportion to other responsible parties, and the extent to which
such costs are recoverable from third parties including insurers. Also, GATX
may incur additional costs relating to facilities and sites where past
operations followed practices and procedures that were considered acceptable at
the time but in the future may require investigation and/or remedial work to
ensure adequate protection to the environment under current standards. If
future laws and regulations contain more stringent requirements than presently
anticipated, expenditures may be higher than the estimates, forecasts, and
assessments of potential environmental costs provided below. However, these
costs are expected to be at least equal to the current level of expenditures.
In addition, GATX has provided indemnities for environmental issues to the
buyers of two divested companies for which GATX believes it has adequate
reserves.
GATX's environmental reserve at the end of 1993 was $81 million and reflects
GATX's best estimate of the cost to remediate its environmental conditions.
Additions to the reserve were $17 million in both 1993 and 1992. Expenditures
charged to the reserve amounted to $10 million and $12 million in 1993 and 1992,
respectively.
In 1993, GATX made capital expenditures of $18 million for environmental and
regulatory compliance compared to $16 million in 1992. These projects included
marine vapor recovery, discharge prevention compliance, impervious dikes and
tank car cleaning systems. Environmental projects authorized or currently under
consideration would require capital expenditures of approximately $25 million in
1994. It is anticipated that GATX will make annual expenditures at a similar
level over the next five years for regulatory and environmental requirements.
Item 2. Properties
Information regarding the location and general character of certain properties
of GATX is included in Item 1, Business, of this document. The major portion of
Terminals' land is owned; the balance is leased. Most of the warehouses
operated by GATX Logistics are leased; the others are managed for third parties.
Item 3. Legal Proceedings
A railcar owned by Transportation was involved in a derailment near Dunsmuir,
California in July 1991 that resulted in a spill of metam sodium into the
Sacramento River. Various lawsuits seeking damages in unspecified amounts have
been filed against General American Transportation Corporation (GATC), or an
affiliated company, most of which have been consolidated in the Superior Court
of the State of California for the City and County of San Francisco (Nos. 2617
and 2620). GATC has now been dismissed by the class plaintiffs in those cases
but remains in the cases with respect to the plaintiffs who have opted out of
the class and with respect to indemnity and contribution claims. There is one
other case seeking recovery for response costs and natural resource damages:
State of California, et al, vs. Southern Pacific, et al, filed in the Eastern
District of California (CIV-S-92 1117). All other actions have been
consolidated with these two cases. GATC also has been named as a potentially
responsible party by the State of California with respect to the assessment and
remediation of possible damages to natural resources which
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<PAGE>
claim has also been consolidated in the suit in the Eastern District of
California. GATC has entered into provisional settlement agreements with the
United States of America, the state of California, Southern Pacific and certain
other defendents settling all material claims arising out of the above incident
in an amount not material to GATC. Such settlement, however, is conditional on
further court action. Further, it is the opinion of management that if damages
are assessed and taking into consideration the probable insurance recovery, this
matter will not have a material effect on GATX's consolidated financial position
or results of operations.
Various lawsuits 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. Those suits, all of which were filed
in the County of San Bernardino unless otherwise indicated, are: Aguilar, et
al, v. Calnev Pipe Line Company, et al, filed February 1990 in the County of Los
Angeles (No. 0751026); Alba, et al, v. Southern Pacific Railroad Co., et al,
filed November 1989 (No. 252842); Terry, et al, v. Southern Pacific
Transportation Corporation, et al, filed December 1989 (No. 253603) and settled
February 1994; Terry, et al, v. Southern Pacific, et al, filed December 1989
(No. 253604); Charles, et al, v. Calnev Pipe Line, Inc., et al, filed May 1990
(No. 256269); Raman, et al, v. Southern Pacific Railroad Company, et al, filed
May 1990 (No. 256181) and settled October 1993; Abrego, et al, v. Southern
Pacific Transportation Corporation, et al, filed May 1990 in the County of Los
Angeles (No. BC 000947); Glaspie, et al, v. Southern Pacific Transportation, et
al, filed May 1990 in the County of Los Angeles (No. BC002047); Jackson, et al,
v. City of San Bernardino, et al, filed May 1990 (No. 256172) and settled
February 1993; Burney, et al, v. Southern Pacific, et al, filed May 1990 in the
County of Los Angeles (BC000876); Hawkins, et al, v. Southern Pacific, et al,
filed May 1990 in the County of Los Angeles (BC000825) and since dismissed as to
all GATX subsidiaries; Ledbetter, et al, v. City of San Bernardino, et al, filed
May 1990
(No. 256173); Mary Washington v. Southern Pacific, et al, filed May 1990
(No. 256346); Stewart, et al, v. Southern Pacific Railroad Co., et al, filed May
1990 (No. 256464); Yost, et al, v. Southern Pacific Railroad, et al, filed June
1989 (No. 250308) and dismissed January 1993; Riley, et al, v. Lake Minerals
Corp., et al, filed May 1990 (No. 256163) and settled September 1993; Pearson v.
Calnev Pipe Line Company, et al, filed May 1990 in the County of San Bernardino
(No. 256206); Pollack v. Southern Pacific Transportation, et al, filed May 1992
(No. 271247); Davis v. Calnev Pipe Line Company, et al, filed May 1990 (No.
256207); J. Roberts, et al, v. Southern Pacific Transportation, et al, filed
November 1992 (No. 275936); Brooks, et al, v. Southern Pacific, et al, filed May
1990 (No. 256176) and settled February 1994; Goldie, et al, v. Southern Pacific,
et al, filed May 1990 and dismissed July 1993, appeal pending; Irby, et al, v.
Southern Pacific, et al,
(No. 255715) filed April 1990; Esparza, et al, v. Southern Pacific, et al, (No.
256433) filed May 1990 and settled February 1994; Reese, et al, v. Southern
Pacific, et al (No. 256434) filed May 1990; Nancy Washington, et al, v. Southern
Pacific, et al, (No. 256435) filed May 1990. In addition, GATX is aware of
approximately 10 other cases (the majority involving multiple plaintiffs)
seeking damages arising out of this incident which have named but not served a
subsidiary of GATX or a subsidiary officer. Based upon information known to
management, it remains management's opinion that if damages are assessed and
taking into consideration probable insurance recovery, the ultimate resolution
of the lawsuits arising out of the May 1989 explosion will not have a material
effect on GATX's consolidated financial position or results of operations.
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<PAGE>
In October 1991, GATX and five of its senior officers were named as defendants
in Searls vs. Glasser, et al, filed in the U.S. District Court for the Northern
District of Illinois, a class action filed on behalf of certain purchasers of
GATX's common stock alleging violation of the securities laws, common law fraud
and negligent misrepresentation in various public statements made by GATX during
1991 concerning 1992 forecasted earnings. Upon the completion of extensive
discovery, GATX filed a motion for summary judgment which the court has taken
under consideration. GATX believes that it has a strong defense and that the
complaint is without merit.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Executive Officers of the Registrant
Pursuant to General Instruction G(3), the following information regarding
executive officers is included in Part I in lieu of inclusion in the GATX Proxy
Statement:
Office
Held
Name Office Held Since Age
James J. Glasser Chairman of the Board, President
and Chief Executive Officer 1978 59
John F. Chlebowski, Jr.Vice President, Finance and 1985 48
Chief Financial Officer
William L. Chambers Vice President, Human Resources 1993 56
Paul A. Heinen Vice President, General
Counsel and Secretary 1981 63
Ralph L. O'Hara Controller 1986 49
E. Paul Dunn, Jr. Treasurer 1990 40
Officers are elected annually by the Board of Directors. Previously, Mr.
Chambers was the Senior Vice President of Human Resources and Corporate
Relations for Beatrice Company from 1986 to 1990. From 1991 until 1993,
Mr. Chambers was engaged in human resource consulting. Previously,
Mr. Dunn was Assistant Treasurer of The Hertz Corporation from 1985-1990.
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<PAGE>
PART II
Item 5. Market for the Registrant's Common Stock and Related Shareholder
Matters
Information required by this item is contained in Exhibit 13, GATX Annual Report
to Shareholders for the year ended December 31, 1993 on page 59, which is
incorporated herein by reference (page reference is to the Annual Report to
Shareholders).
Item 6. Selected Financial Data
Information required by this item is contained in Exhibit 13, GATX Annual Report
to Shareholders for the year ended December 31, 1993, on pages 60 and
61, which is incorporated herein by reference (page references are to the Annual
Report to Shareholders).
Item 7. Management Discussion and Analysis of Financial Condition and Results
of Operations
Information required by this item is contained in Item 1, Businss, section of
this document and in Exhibit 13, GATX Annual Report to Shareholders for the year
ended December 31, 1993, the management discussion and analysis on pages 29, 30,
31, 37, 39, 41 and 42, the financial data of business segments on pages 32
through 35, and the discussion of 1992 and 1991 operations on pages 62 and 63,
which is incorporated herein by reference (page references are to the Annual
Report to Shareholders).
Item 8. Financial Statements and Supplementary Data
The following consolidated financial statements of GATX Corporation, included in
Exhibit 13, GATX Annual Report to Shareholders for the year ended
December 31, 1993, which is incorporated herein by reference (page references
are to the Annual Report to Shareholders):
Statements of Consolidated Income and Reinvested Earnings -- Years
ended December 31, 1993, 1992 and 1991, on page 36.
Consolidated Balance Sheets -- December 31, 1993 and 1992, on
page 38.
Statements of Consolidated Cash Flows -- Years ended
December 31, 1993, 1992 and 1991, on page 40.
Notes to Consolidated Financial Statements on pages 43 through 58.
Quarterly results of operations are contained in Exhibit 13, GATX Annual Report
to Shareholders for the year ended December 31, 1993 on page 59, which is
incorporated herein by reference (page reference is to the Annual Report to
Shareholders).
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
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<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant
Information required by this item regarding directors is contained in sections
entitled "Nominees For Directors" and "Additional Information Concerning
Nominees" in the GATX Proxy Statement dated March 11, 1994, which sections are
incorporated herein by reference. Information regarding officers is included at
the end of Part I.
Item 11. Executive Compensation
Information required by this item regarding executive compensation is contained
in sections entitled "Compensation of Directors" and "Compensation of Executive
Officers" in the GATX Proxy Statement dated March 11, 1994, which sections are
incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Information required by this item regarding the Company's Common Stock is
contained in sections entitled "Nominees For Directors," "Security Ownership of
Management" and "Beneficial Ownership of Common Stock" in the GATX Proxy
Statement dated March 11, 1994, which sections are incorporated herein by
reference. The following are the only persons known to the Company who
beneficially owned as of March 4, 1994 more than 5% of the Company's $3.875
Cumulative Convertible Preferred Stock ("CCP Stock"):
<TABLE>
Name and Address of Shares Beneficially
Beneficial Owner Owned Percent of Class
<S> <C> <C>
Fiduciary Trust 331,500 9.77
Company International (1)
Two World Trade Center,
New York, NY
FMR Corp. (2) 341,700 10.06
82 Devonshire Street
Boston, MA
<FN>
(1) According to Schedule 13Gs dated January 28, 1994 furnished to the
Company, United Nations Joint Staff Pension Fund ("UN") and its appointed
Investment Advisor, Fiduciary Trust Company ("Fiduciary"), share voting
and dispositive power with respect to 330,000 shares of the CCP Stock and
Fiduciary has sole dispositive and sole voting power over 1,500 shares of
the CCP Stock. The 331,500 shares represent voting over 1.43% of the
shares of Company Stock entitled to vote at the Company's Annual Meeting.
(2) According to a Schedule 13G dated February 11, 1994 furnished to the
Company, FMR Corp. ("FMR") through certain of its wholly-owned
subsidiaries has beneficial ownership of and sole dispositive power over
341,700 shares of the CCP Stock with sole voting power over some portion
of 56,700 shares of the CCP Stock. The 341,700 shares of CCP Stock
represent voting power over 1.47% of the shares of Company Stock entitled
to vote at the Company's Annual Meeting. FMR's beneficial ownership of
Common Stock of the Company is described in the GATX Proxy Statement
dated March 11, 1994.
</FN>
</TABLE>
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Item 13. Certain Relationships and Related Transactions
None.
PART IV
Item 14. Financial Statement Schedules, Reports on Form 8-K and Exhibits.
a) 1. -Financial Statements
The following consolidated financial statements of GATX Corporation
included in the Annual Report to Shareholders for the year ended
December 31, 1993, are filed in response to Item 8:
Statements of Consolidated Income and Reinvested Earnings --
Years ended December 31, 1993, 1992 and 1991
Consolidated Balance Sheets -- December 31, 1993 and 1992
Statements of Consolidated Cash Flows -- Years ended
December 31, 1993, 1992 and 1991
Notes to Consolidated Financial Statements
2. -Financial Statement Schedules:
Page
Schedule IIICondensed Financial
Information of Registrant................ 17
Schedule V Property, Plant and Equipment.............. 21
Schedule VI Accumulated Depreciation, Depletion and
Amortization of Property, Plant and
Equipment................................ 25
Schedule VIIIValuation and Qualifying Accounts ......... 29
Schedule IX Short-Term Borrowings...................... 30
Schedule X Supplementary Income Statement Information. 31
All other schedules for which provision is made in the applicable
accounting regulation of the Securities and Exchange Commission
are not required under the related instructions or are inapplicable,
and, therefore, have been omitted.
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B) EXHIBIT INDEX
Exhibit
Number Exhibit Description Page
3A. Restated Certificate of Incorporation of GATX Corporation, as amended,
incorporated by reference to GATX's Annual Report on Form 10-K for the
fiscal year ended December 31, 1991, file number 1-2328.
3B. Bylaws of GATX Corporation, as amended, incorporated by reference to
GATX's Annual Report on Form 10-K for the fiscal year ended December
31, 1990, file number 1-2328.
4A. Rights Agreement dated as of May 15, 1986, as amended and restated as
of June 2, 1989, between GATX Corporation and Manufacturers Hanover
Trust Company, as Rights Agent, incorporated by reference to Exhibit 4
contained in GATX's Amendment on Form 8 dated July 14, 1989, to its
Registration Statement on Form 8-A, file number 1-2328.
10A. GATX Corporation 1980 Long Term Incentive Compensation Plan, as
amended, incorporated by reference to GATX's Annual Report on Form
10-K for the fiscal year ended December 31, 1991, file number 1-2328.
10B. GATX Corporation 1985 Long Term Incentive Compensation Plan, as
amended, and restated as of April 27, 1990, incorporated by reference
to GATX's Annual Report on Form 10-K for the fiscal year ended
December 31, 1990, file No. 1-2328. Amendment to said Plan effective
as of April 1, 1991, incorporated by reference to GATX's Annual Report
on Form 10-K for the fiscal year ended December 31, 1991, file number
1-2328.
10C. Management Incentive Compensation Plan dated January 1, 1993, file
number 1-2328, submitted to the SEC along with the electronic
submission of this Report on
Form 10-K.
10D. GATX Corporation Deferred Fee Plan for Directors, effective April
1982, as amended, incorporated by reference to GATX's Annual Report on
Form 10-K for the fiscal year ended December 31, 1991, file number
1-2328.
10E. 1984 Executive Deferred Income Plan Participation Agreement between
GATX Corporation and participating directors and executive officers
dated September 1, 1984, as amended, incorporated by reference to
GATX's Annual Report on Form 10-K for the fiscal year ended
December 31, 1991, file number 1-2328.
-12-
<PAGE>
EXHIBIT INDEX - CONTINUED
Exhibit
Number Exhibit Description Page
10F. 1985 Executive Deferred Income Plan Participation Agreement between
GATX Corporation and participating directors and executive officers
dated July 1, 1985, as amended, incorporated by reference to GATX's
Annual Report on Form 10-K for the fiscal year ended December 31,
1991, file number 1-2328.
10G. 1987 Executive Deferred Income Plan Participation Agreement between
GATX Corporation and participating directors and executive officers
dated December 31, 1986, as amended, incorporated by reference to
GATX's Annual Report on Form 10-K for the fiscal year ended
December 31, 1991, file number 1-2328.
10H. Amendment to Executive Deferred Income Plan Participation Agreements
between GATX and certain participating directors and participating
executive officers entered into as of January 1, 1990, incorporated by
reference to GATX's Annual Report on Form 10-K for the fiscal year
ended December 31, 1989, file number 1-2328.
10I. Retirement Supplement to Executive Deferred Income Plan Participation
Agreements entered into as of January 23, 1990, between GATX and
certain participating directors incorporated by reference to GATX's
Annual Report on Form 10-K for the fiscal year ended December 31,
1989, file number 1-2328 and between GATX and certain other
participating directors incorporated by reference to GATX's Annual
Report on Form 10-K for the fiscal year ended December 31, 1990, file
number 1-2328.
10J. Amendment to Executive Deferred Income Plan Participation Agreements
between GATX and participating executive officers entered into as of
April 23, 1993. Submitted to the SEC along with the electronic
submission of this Report on Form 10-K.
10K. Agreement for Continued Employment Following Change of Control or
Disposition of a Subsidiary between GATX Corporation and certain
executive officers dated as of January 1, 1992, incorporated by
reference to GATX's Annual Report on Form 10-K for the fiscal year
ended December 31, 1991, file number 1-2328 and between GATX and an
additional executive officer dated as of January 1, 1992, incorporated
by reference to GATX's Annual Report on Form 10-K for the fiscal year
ended December 31, 1992, file number 1-2328.
-13-
<PAGE>
EXHIBIT INDEX - CONTINUED
Exhibit
Number Exhibit Description Page
10L. Letter agreement dated March 5, 1986, between GATX
Corporation and an executive officer of GATX, incorporated by
reference to GATX's Annual Report on Form 10-K for the fiscal
year ended December 31, 1988, file number 1-2328.
10M. Letter agreement dated June 5, 1987, between GATX Corporation
and an executive officer of GATX, incorporated by reference
to GATX's Annual Report on Form 10-K for the fiscal year
ended December 31, 1988, file number 1-2328.
10N. Director Retirement Plan effective January 1, 1992,
incorporated by reference to GATX's Annual Report on Form 10-
K for the fiscal year ended December 31, 1992, file number 1-
2328.
11. Statements regarding computation of net income (loss)
per share. 32-33
12. Statement regarding computation of ratios of earnings
to combined fixed charges and preferred stock dividends.34
13. Annual Report to Shareholders for the year ended
December 31, 1993, pages 27-65, with respect to the
Annual Report on Form 10-K for the fiscal year ended
December 31, 1993, file number 1-2328. Submitted to the
SEC along with the electronic submission of this Report
on Form 10-K.
22. Subsidiaries of the Registrant. 35
24. Consent of Independent Auditors. 36
25. Powers of Attorney with respect to the Annual Report on Form
10-K for the fiscal year ended December 31, 1993, file number
1-2328. Submitted to the SEC along with the electronic
submission of this Report on Form 10-K.
28A. Undertakings to the GATX Corporation 1980 Long Term
Incentive Plan, incorporated by reference to the
Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1982, file number 1-2328.
28B. Undertakings to the GATX Corporation Salaried Employees
Retirement Savings Plan, incorporated by reference to GATX's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1982, file number 1-2328.
28C. Undertakings to the GATX Corporation 1985 Long Term Incentive
Plan, incorporated by reference to GATX's Annual Report on
Form 10-K for the fiscal year ended December 31, 1985, file
number 1-2328.
-14-
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Shareholders
and Board of Directors
GATX Corporation
We have audited the consolidated financial statements and related schedules of
GATX Corporation and subsidiaries listed in Item 14 (a)(1) and (2) of the Annual
Report on Form 10-K of GATX Corporation for the year ended December 31, 1993.
These financial statements and related schedules are the responsibility of
GATX's management. Our responsibility is to express an opinion on these
financial statements and related schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements and related schedules.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of GATX
Corporation and subsidiaries at December 31, 1993 and 1992, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1993, in conformity with generally accepted accounting
principles. Also, in our opinion, the related financial statements schedules,
when considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects, the information set forth therein.
As discussed in the notes to the consolidated financial statements, in 1992 the
Company changed its method of accounting for the postretirement benefits other
than pensions and income taxes.
ERNST & YOUNG
Chicago, Illinois
January 25, 1994
-15-
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
GATX CORPORATION
(Registrant)
/s/James J. Glasser
-------------------------------
James J. Glasser
Chairman of the Board, President
and Chief Executive Officer
March 21, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
/s/James J. Glasser
----------------------
James J. Glasser Chairman of the Board, President
March 21, 1994 and Chief Executive Officer
/s/John F. Chlebowski, Jr.
-------------------------
John F. Chlebowski, Jr. Vice President, Finance and
March 21, 1994 Chief Financial Officer
/s/Ralph L. O'Hara
----------------------
Ralph L. O'Hara Controller and
March 21, 1994 Principal Accounting Officer
Weston R. Christopherson Director
Franklin A. Cole Director
James W. Cozad Director By /s/Paul A. Heinen
Robert J. Day Director (Paul A. Heinen,
James L. Dutt Director Attorney-in-Fact)
Deborah M. Fretz Director
Richard A. Giesen Director
Charles Marshall Director
Michael E. Murphy Director
Marcia T. Thompson Director Date: March 21, 1994
-16-
<PAGE>
SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
GATX CORPORATION
(PARENT COMPANY)
<TABLE>
STATEMENTS OF INCOME
(IN MILLIONS)
<CAPTION>
Year Ended December 31
1993 1992 1991
<S> <C> <C> <C>
Gross loss $ (5.5) $ (4.5) $ (5.1)
Costs and expenses
Interest 18.4 23.3 24.6
Provision for depreciation .4 .3 .5
Selling, general and administrative 23.2 18.8 14.2
------ ------ ------
42.0 42.4 39.3
------ ------ ------
Loss before income taxes, share of net
income of subsidiaries and cumulative
effect of accounting changes (47.5) (46.9) (44.4)
Income taxes (credit) (17.5) (13.3) (16.7)
------ ------ ------
Loss before share of net income
of subsidiaries and cumulative
effect of accounting changes (30.0) (33.6) (27.7)
Share of net income of subsidiaries 102.7 59.8 110.4
------ ------ ------
Income before cumulative effect
of accounting changes 72.7 26.2 82.7
Cumulative effect of accounting changes - (42.7) -
------ ------ ------
Net income (loss) $ 72.7 $(16.5) $ 82.7
====== ====== ======
</TABLE>
-17-
<PAGE>
SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (CONT'D)
GATX CORPORATION
(PARENT COMPANY)
<TABLE>
BALANCE SHEETS
(IN MILLIONS)
<CAPTION>
ASSETS
December 31
1993 1992
<S> <C> <C>
Cash and cash equivalents $ .1 $ .2
Property, plant and equipment 7.9 3.8
Less - Allowances for depreciation (.9) (3.3)
-------- --------
7.0 .5
Investment in subsidiaries 1,101.7 1,072.4
Other assets 16.3 18.9
TOTAL ASSETS $1,125.1 $1,092.0
======== ========
</TABLE>
-18-
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES, DEFERRED ITEMS AND SHAREHOLDERS' EQUITY
December 31
1993 1992
<S> <C> <C>
Accounts payable and accrued expenses $ 21.6 $ 23.8
Due to subsidiaries 450.9 446.2
Other deferred items 62.7 64.4
-------- --------
Total liabilities and deferred items 535.2 534.4
-------- --------
Shareholders' equity:
Preferred Stock 3.4 3.4
Common Stock 14.1 13.9
Additional Capital 312.4 306.9
Reinvested earnings 305.1 273.1
Cumulative foreign currency
translation adjustment 2.0 7.4
-------- --------
637.0 604.7
Less - Cost of shares in treasury (47.1) (47.1)
-------- --------
Total shareholders' equity 589.9 557.6
-------- --------
TOTAL LIABILITIES, DEFERRED ITEMS
AND SHAREHOLDERS' EQUITY $1,125.1 $1,092.0
======== ========
</TABLE>
-19-
<PAGE>
SCHEDULE III - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (CONT'D)
GATX CORPORATION
(PARENT COMPANY)
<TABLE>
STATEMENTS OF CASH FLOWS
(IN MILLIONS)
<CAPTION>
Year Ended December 31
1993 1992 1991
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ 72.7 $ (16.5) $ 82.7
Adjustments to reconcile net
income (loss) to net cash provided by
(used in) operating activities:
Provision for depreciation .4 .3 .5
Deferred income taxes (credit) (9.1) (21.0) (9.6)
Cumulative effect of accounting changes - 42.7 -
Share of net income of subsidiaries
less dividends received (33.7) (3.5) (51.1)
Other (includes working capital) 8.0 (7.7) (10.2)
------- ------- ------
NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES 38.3 (5.7) 12.3
INVESTING ACTIVITIES
Additions to property, plant & equipment (7.1) (.1) (.1)
Investment in subsidiaries - (12.1) (32.7)
------- ------- ------
NET CASH USED IN
INVESTING ACTIVITIES (7.1) (12.2) (32.8)
FINANCING ACTIVITIES
Issuance of Common Stock under
employee benefit programs 4.7 1.2 3.3
Cash dividends to shareholders (40.7) (38.6) (36.5)
Advances from subsidiaries 4.7 54.7 53.8
------- ------- ------
NET CASH (USED IN) PROVIDED BY
FINANCING ACTIVITIES (31.3) 17.3 20.6
NET (DECREASE) INCREASE
IN CASH AND CASH EQUIVALENTS $ (.1)$ (.6) $ .1
======== ======= ======
</TABLE>
-20-
<PAGE>
<TABLE>
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
GATX CORPORATION AND SUBSIDIARIES
YEAR ENDED DECEMBER 31, 1993
(IN MILLIONS)
<CAPTION>
COL. A COL. B COL. C COL. D COL. E COL. F
Balance at Other Charges - Balance
BeginningAdditions Add (Deduct) - at End
CLASSIFICATION - NOTE A of Period at CostRetirements Describe of Period
<S> <C> <C> <C> <C> <C>
Railcars and support facilities:
Railcars $1,649.8 $171.5 $ 20.5 $(143.3)(B) $1,657.5
Buildings and railcar
maintenance facilities 28.8 18.0 .5 - 46.3
Machinery and equipment 20.6 3.9 .1 - 24.4
Other assets 7.7 1.9 2.0 - 7.6
-------- ------ ------ ------- --------
Total railcars and
support facilities 1,706.9 195.3 23.1 (143.3) 1,735.8
Tank storage terminals and pipelines:
Land 36.1 - - - 36.1
Buildings and land
improvements 56.4 4.1 .1 (.1)(C) 60.3
Storage tanks and pipelines 283.2 21.3 1.1 (1.3)(C) 302.1
Docks 36.9 2.9 - (.1)(C) 39.7
Machinery, equipment
and fixtures 463.6 37.0 8.6 - 492.0
Construction in progress 31.7 8.9 - - 40.6
Other 41.7 3.6 1.0 (.3)(C) 44.0
-------- ------ ------ ------- --------
Total tank storage
terminals and pipelines 949.6 77.8 10.8 (1.8) 1,014.8
Great Lakes vessels 203.3 .1 - - 203.4
Operating lease investments
and other:
Operating lease investments268.6 117.9 30.3 (69.1)(D) 287.1
Land 2.3 - .4 - 1.9
Buildings .6 - - - .6
Machinery and equipment 22.9 9.1 1.4 - 30.6
Other 63.5 12.6 5.3 (39.9)(C) 30.9
-------- ------ ------ ------- --------
Total operating lease
investments and other 357.9 139.6 37.4 (109.0) 351.1
-------- ------ ------ ------- --------
TOTAL $3,217.7 $412.8 $ 71.3 $(254.1) $3,305.1
======== ====== ====== ======= ========
</TABLE>
See notes to Schedule V on page 24.
-21-
<PAGE>
<TABLE>
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT (CONT'D)
GATX CORPORATION AND SUBSIDIARIES
YEAR ENDED DECEMBER 31, 1992
(IN MILLIONS)
<CAPTION>
COL. A COL. B COL. C COL. D COL. E COL. F
Balance at Other Charges - Balance
BeginningAdditions Add (Deduct) - at End
CLASSIFICATION - NOTE A of Period at CostRetirements Describe of Period
<S> <C> <C> <C> <C> <C>
Railcars and support facilities:
Railcars $1,642.6 $108.2 $ 19.6 $ (81.4)(B) $1,649.8
Buildings and railcar
maintenance facilities 21.6 7.3 .1 - 28.8
Machinery and equipment 19.9 .9 .2 - 20.6
Other assets 7.8 .2 .3 - 7.7
-------- ------ ------ ------- --------
Total railcars and
support facilities 1,691.9 116.6 20.2 (81.4) 1,706.9
Tank storage terminals and pipelines:
Land 36.4 .1 - (.4)(C) 36.1
Buildings and land
improvements 54.0 3.6 .1 (1.1)(C) 56.4
Storage tanks and pipelines252.6 32.3 1.3 (.4)(C) 283.2
Docks 35.1 2.0 - (.2)(C) 36.9
Machinery, equipment
and fixtures 429.8 46.0 2.6 (9.6)(C) 463.6
Construction in progress 43.2 (11.0) - (.5)(C) 31.7
Other 39.3 3.2 - (.8)(C) 41.7
-------- ------ ------ ------- --------
Total tank storage
terminals and pipelines 890.4 76.2 4.0 (13.0) 949.6
Great Lakes vessels 217.9 .6 7.2 (8.0)(E) 203.3
Operating lease investments
and other:
Operating lease investments257.5 13.7 5.3 2.7 (D) 268.6
Land 2.3 - - - 2.3
Buildings .6 - - - .6
Machinery and equipment 24.9 3.6 5.6 - 22.9
Other 57.5 4.9 .7 1.8 (C) 63.5
-------- ------ ------ ------- --------
Total operating lease
investments and other 342.8 22.2 11.6 4.5 357.9
-------- ------ ------ ------- --------
TOTAL $3,143.0 $215.6 $ 43.0 $ (97.9) $3,217.7
======== ====== ====== ======= ========
</TABLE>
See notes to Schedule V on page 24.
-22-
<PAGE>
<TABLE>
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT (CONT'D)
GATX CORPORATION AND SUBSIDIARIES
YEAR ENDED DECEMBER 31, 1991
(IN MILLIONS)
<CAPTION>
COL. A COL. B COL. C COL. D COL. E COL. F
Balance at Other Charges - Balance
Beginning Additions Add (Deduct) - at End
CLASSIFICATION - NOTE A of Period at Cost Retirements Describe of Period
<S> <C> <C> <C> <C> <C>
Railcars and support facilities:
Railcars $1,639.8 $101.1 $ 20.6 $ (77.7)(B) $1,642.6
Buildings and railcar
maintenance facilities 21.5 .1 - - 21.6
Machinery and equipment 19.1 .9 .1 - 19.9
Other assets 7.5 .3 - - 7.8
-------- ------ ------ ------- --------
Total railcars and
support facilities 1,687.9 102.4 20.7 (77.7) 1,691.9
Tank storage terminals and pipelines:
Land 36.5 - - (.1)(C) 36.4
Buildings and land
improvements 54.6 3.2 - (3.8)(C) 54.0
Storage tanks and pipelines203.0 23.9 .4 26.1 (C) 252.6
Docks 33.1 1.2 - .8 (C) 35.1
Machinery, equipment
and fixtures 431.9 34.7 2.6 (34.2)(C) 429.8
Construction in progress 27.9 15.5 - (.2)(C) 43.2
Other 23.2 4.4 .2 11.9 (C) 39.3
-------- ------ ------ ------- --------
Total tank storage
terminals and pipelines810.2 82.9 3.2 .5 890.4
Great Lakes vessels 215.4 2.5 - - 217.9
Operating lease investments
and other:
Operating lease investments101.9 41.6 15.9 129.9 (D) 257.5
Land 1.5 .5 .1 .4 (C) 2.3
Buildings 1.7 - 1.1 - .6
Machinery and equipment 15.2 5.3 1.0 5.4 (F) 24.9
Other 52.4 5.6 2.1 1.6 (F) 57.5
-------- ------ ------ ------- --------
Total operating lease
investments and other 172.7 53.0 20.2 137.3 342.8
-------- ------ ------ ------- --------
TOTAL $2,886.2 $240.8 $ 44.1 $ 60.1 $3,143.0
======== ====== ====== ======= ========
</TABLE>
See notes to Schedule V on page 24.
-23-
<PAGE>
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT (CONT'D)
GATX CORPORATION AND SUBSIDIARIES
Note A - The estimated useful lives of depreciable assets are as follows:
Railcars 20 - 33 years
Great Lakes vessels 30 - 40 years
Buildings, leasehold improvements,
storage tanks and pipelines 5 - 45 years
Machinery and related equipment 3 - 20 years
Operating lease investments 3 - 40 years
Note B - Represents primarily the sale leaseback of certain railcar additions.
Note C - Represents adjustments associated with transfers and reclassifications
of certain facilities and other assets, and foreign currency
translation adjustments.
Note D - Represents adjustments associated with transfers and reclassifications
of operating lease assets and in 1993 represents primarily the sale
leaseback of a rail equipment portfolio.
Note E - Primarily represents expiration of capital lease related to one of
the vessels.
Note F - Represents primarily asset values assigned to GATX Logistics'
acquisitions.
-24-
<PAGE>
<TABLE>
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT
GATX CORPORATION AND SUBSIDIARIES
YEAR ENDED DECEMBER 31, 1993
(IN MILLIONS)
<CAPTION>
COL. A COL. B COL. C COL. D COL. E COL. F
Additions
Balance atCharged to Other Charges - Balance
Beginning Costs and Add (Deduct) - at End
DESCRIPTION of Period Expenses Retirements Describe of Period
<S> <C> <C> <C> <C> <C>
Railcars and support facilities:
Railcars $ 768.7 $ 62.0 $ 15.5 $ (5.4)(A) $ 809.8
Buildings and railcar
maintenance facilities 14.7 .3 .4 - 14.6
Machinery and equipment 16.0 1.0 .2 - 16.8
Other assets 5.3 .5 2.0 - 3.8
-------- ------ ------ ------- --------
Total railcars and
support facilities 804.7 63.8 18.1 (5.4) 845.0
Tank storage terminals and pipelines:
Buildings and land
improvements 24.7 2.6 - (.1)(B) 27.2
Storage tanks and pipelines 91.0 10.8 .4 (.3)(B) 101.1
Docks 17.7 1.6 - - 19.3
Machinery, equipment
and fixtures 162.3 22.0 3.7 (.6)(B) 180.0
Other 18.1 3.5 .8 (.1)(B) 20.7
-------- ------ ------ ------- --------
Total tank storage
terminals and pipelines 313.8 40.5 4.9 (1.1) 348.3
Great Lakes vessels 85.9 5.6 - - 91.5
Operating lease investments
and other:
Operating lease investments 23.0 26.1 21.3 4.5 (C) 32.3
Buildings .2 - - - .2
Machinery and equipment 10.9 5.2 1.1 - 15.0
Other 14.9 5.5 4.1 (5.8)(B) 10.5
-------- ------ ------ ------- --------
Total operating lease
investments and other 49.0 36.8 26.5 (1.3) 58.0
-------- ------ ------ ------- --------
TOTAL $1,253.4 $146.7 $ 49.5 $ (7.8) $1,342.8
======== ====== ====== ======= ========
</TABLE>
See notes to Schedule VI on page 28.
-25-
<PAGE>
<TABLE>
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT (CONT'D)
GATX CORPORATION AND SUBSIDIARIES
YEAR ENDED DECEMBER 31, 1992
(IN MILLIONS)
<CAPTION>
COL. A COL. B COL. C COL. D COL. E COL. F
Additions
Balance atCharged to Other Charges - Balance
Beginning Costs and Add (Deduct) - at End
DESCRIPTION of Period Expenses Retirements Describe of Period
<S> <C> <C> <C> <C> <C>
Railcars and support facilities:
Railcars $ 724.8 $ 60.4 $ 14.8 $ (1.7)(A) $ 768.7
Buildings and railcar
maintenance facilities 14.4 .4 .1 - 14.7
Machinery and equipment 15.4 .8 .2 - 16.0
Other assets 4.6 1.0 .3 - 5.3
-------- ------ ------ ------- --------
Total railcars and
support facilities 759.2 62.6 15.4 (1.7) 804.7
Tank storage terminals and pipelines:
Buildings and land
improvements 22.4 2.4 .1 - 24.7
Storage tanks and pipelines 81.6 10.3 .7 (.2)(B) 91.0
Docks 16.1 1.6 - - 17.7
Machinery, equipment
and fixtures 144.4 20.6 2.3 (.4)(B) 162.3
Other 14.9 3.2 - - 18.1
-------- ------ ------ ------- --------
Total tank storage
terminals and pipelines 279.4 38.1 3.1 (.6) 313.8
Great Lakes vessels 94.7 5.6 6.5 (7.9) 85.9
Operating lease investments
and other:
Operating lease investments 16.6 14.6 2.2 (6.0)(C) 23.0
Buildings .2 - - - .2
Machinery and equipment 10.5 4.9 4.4 (.1)(B) 10.9
Other 10.4 8.0 .4 (3.1)(B) 14.9
-------- ------ ------ ------- --------
Total operating lease
investments and other 37.7 27.5 7.0 (9.2) 49.0
-------- ------ ------ ------- --------
TOTAL $1,171.0 $133.8 $ 32.0 $(19.4) $1,253.4
======== ====== ====== ======= ========
</TABLE>
See notes to Schedule VI on page 28.
-26-
<PAGE>
<TABLE>
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT (CONT'D)
GATX CORPORATION AND SUBSIDIARIES
YEAR ENDED DECEMBER 31, 1991
(IN MILLIONS)
<CAPTION>
COL. A COL. B COL. C COL. D COL. E COL. F
Additions
Balance atCharged to Other Charges - Balance
Beginning Costs and Add (Deduct) - at End
DESCRIPTION of Period Expenses Retirements Describe of Period
<S> <C> <C> <C> <C> <C>
Railcars and support facilities:
Railcars $ 682.9 $ 60.4 $ 14.6 $ (3.9)(A) $ 724.8
Buildings and railcar
maintenance facilities 14.0 .4 - - 14.4
Machinery and equipment 14.7 .7 - - 15.4
Other assets 3.9 .7 - - 4.6
-------- ------ ------ ------- --------
Total railcars and
support facilities 715.5 62.2 14.6 (3.9) 759.2
Tank storage terminals and pipelines:
Buildings and land
improvements 20.6 2.3 - (.5)(B) 22.4
Storage tanks & pipelines 85.1 9.7 .1 (13.1)(B) 81.6
Docks 14.6 1.5 - - 16.1
Machinery,
equipment & fixtures 119.6 19.0 1.2 7.0 (B) 144.4
Other 6.0 3.0 .2 6.1 (B) 14.9
-------- ------ ------ ------- --------
Total tank storage
terminals and pipelines 245.9 35.5 1.5 (.5) 279.4
Great Lakes vessels 89.1 5.6 - - 94.7
Operating lease investments
and other:
Operating lease investments 15.7 11.5 .1 (10.5)(C) 16.6
Buildings .5 .4 .2 (.5)(B) .2
Machinery and equipment 7.0 4.2 .7 - 10.5
Other 6.6 4.8 .5 (.5)(B) 10.4
-------- ------ ------ ------- --------
Total operating lease
investments and other 29.8 20.9 1.5 (11.5) 37.7
-------- ------ ------ ------- --------
TOTAL $1,080.3 $124.2 $ 17.6 $(15.9) $1,171.0
======== ====== ====== ======= ========
</TABLE>
See notes to Schedule VI on page 28.
-27-
<PAGE>
SCHEDULE VI - ACCUMULATED DEPRECIATION, DEPLETION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT (CONT'D)
GATX CORPORATION AND SUBSIDIARIES
Note A -
In 1993, represents $2.8 million of accumulated depreciation related to
the sale leaseback of railcars and $3.5 million related to the early
disposal of railcars, offset by $.9 million of reserves for the cost of
scrapped railcars. In 1992, represents $6.0 million of accumulated
depreciation related to the sale leaseback of railcars and $1.2 million
for an early disposal, offset by $5.5 million of reserves for the cost
of scrapped railcars. In 1991, represents $3.0 million of accumulated
depreciation related to the sale leaseback of railcars increased by a
$.9 million loss on the cost of scrapped railcars.
Note B -
Represents adjustments associated with transfers and reclassifications
of certain facilities and other assets, and foreign currency translation
adjustments.
Note C -
Represents adjustments associated with transfers and reclassifications
of operating lease assets.
-28-
<PAGE>
<TABLE>
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
GATX CORPORATION AND SUBSIDIARIES
(IN MILLIONS)
<CAPTION>
COL. A COL. B COL. C COL. D COL. E COL. F
ADDITIONS
(1) (2)
Balance atCharged to Charged to Balance
Beginning Costs andOther Accounts-Deductions-at End
DESCRIPTION of Period Expenses Describe Describe of Period
<S> <C> <C> <C> <C> <C>
Year ended December 31, 1993:
Allowance for possible
losses - Note A $110.9 $ 29.6 $ 2.1(C) $ 46.6(D) $ 96.0
Year ended December 31, 1992:
Allowance for possible
losses - Note A $ 81.0 $ 82.5 $ .7(C) $ 53.3(D) $110.9
Reserve for costs of
closing or disposing of
certain manufacturing
facilities - Note B 2.7 - - 2.7(E) -
Year ended December 31, 1991:
Allowance for possible
losses - Note A $ 66.3 $ 40.6 $ 1.7(C) $ 27.6(D) $ 81.0
Reserve for costs of
closing or disposing of
certain manufacturing
facilities - Note B 2.4 - .3(C) - 2.7
<FN>
Note A - Deducted from asset accounts.
Note B - Included in other deferred items in the consolidated balance sheets.
Note C - Represents recovery of amounts previously written off.
Note D - Represents principally reductions in asset values charged off or transferred to claims and
uncollectible amounts.
Note E - Represents transfer to non-asset related reserves.
</FN>
</TABLE>
-29-
<PAGE>
<TABLE>
SCHEDULE IX - SHORT-TERM BORROWINGS
GATX CORPORATION AND SUBSIDIARIES
(IN MILLIONS)
<CAPTION>
COL. A COL. B COL. C COL. D COL. E COL. F
Maximum Average Weighted
Weighted Amount Amount Average
Balance Average OutstandingOutstanding Interest Rate
CATEGORY OF AGGREGATEat End ofInterest During the During the During the
SHORT-TERM BORROWINGS Period Rate Period Period (C) Period (D)
<S> <C> <C> <C> <C> <C>
At December 31, 1993:
Commercial paper (A) $129.7 3.60% $265.8 $178.8 3.65%
Other short-term
borrowings (B) 96.4 4.23 174.3 103.1 4.29(E)
------
TOTAL $226.1
======
At December 31, 1992:
Commercial paper (A) $189.8 4.07% $242.5 $190.1 4.36%
Other short-term
borrowings (B) 141.6 4.82 141.6 89.2 5.49(E)
------
TOTAL $331.4
======
At December 31, 1991:
Commercial paper (A) $228.9 6.50% $228.9 $176.4 6.84%
Other short-term
borrowings (B) 92.8 7.95 126.8 83.9 7.98(E)
------
TOTAL $321.7
======
<FN>
Note A -Commercial paper generally matures within three months from date of issuance with no provision for the extension of its
maturity.
Note B -Other short-term borrowings represents primarily borrowings under lines of credit.
Note C -The average amount outstanding during the period was calculated by adding the average monthly balances and dividing by
12.
Note D -The weighted average interest rate during the period was computed by dividing the actual interest expense by the
average short-term financing outstanding.
Note E -Weighted average interest rate during the period includes interest charges on overdrafts.
</FN>
</TABLE>
-30-
<PAGE>
<TABLE>
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
GATX CORPORATION AND SUBSIDIARIES
(IN MILLIONS)
<CAPTION>
COL. A COL. B
ITEM Charged to Costs and Expenses
Year Ended December 31,
1993 1992 1991
<S> <C> <C> <C>
Maintenance and repairs $103.5 $ 97.3 $ 88.9
======= ======= =======
Taxes (other than payroll and income taxes):
Railcars $ 3.9 $ 3.8 $ 3.3
Franchise and miscellaneous 2.7 2.5 .2
Real estate and personal property 17.7 15.7 14.5
------ ------ ------
$ 24.3 $ 22.0 $ 18.0
======= ======= =======
Amounts for royalties, advertising costs, and amortization of intangibles are
not presented as such amounts are less than 1% of gross income.
</TABLE>
-31-
<PAGE>
EXHIBIT 10C
January 1, 1993
GATX CORPORATION
MANAGEMENT INCENTIVE COMPENSATION PLAN
1. OBJECTIVE.
This Management Incentive Compensation Plan (the "Plan"), which is
administered by the Compensation Committee of the Board of Directors (the
"Committee"), is established for the period January 1 through December 31,
1993 (the "Plan Year"), to motivate and reward those employees in key
management positions whose job performance can directly impact the
profitability of GATX Corporation and its Subsidiaries (collectively, the
"Company").
2. ELIGIBILITY.
Recommendation for participation in the Plan is initiated by the Subsidiary
Presidents or the Vice President of Human Resources, and approved by the
Chief Executive Officer.
3. PARTICIPATION.
Participants under this Plan will be exempt salaried employees with the
Company who are individually authorized to participate (the "Participants").
Each Participant will be notified by the Subsidiary President or Corporate
Department Head of his or her participation in the Plan, and of the
percentage of the base salary at which the Participant will be eligible to
participate in the Plan ("Target Bonus").
4. DEFINITIONS.
For purposes of this Plan, the following terms will have the following
meanings:
A. "Base Salary" will mean (1) the total salary (excluding any incentive
compensation or lump sum payments) paid to a Participant by the Company
before reduction for any contribution authorized under the GATX
Corporation Salaried Employees Retirement Savings Plan, plus (2) any
compensation which the Participant elects to defer under any deferred
compensation plan of the Company.
B. "Income Goals" will mean the net income goals established annually by
the committee for GATX and each Subsidiary. See Exhibit II.
C. "Bonus" will mean the amount payable to a Participant under this Plan
for the current Plan Year, calculated in accordance with the provisions
of this Plan, and approved by the Committee.
1
<PAGE>
D. "Profit Attainment Percentage" will mean the quotient of net income
divided by net income goal expressed as a percentage.
E. "Payout Percentage" will mean the percentage of the Bonus paid for the
Company or Subsidiary performance as determined by the Profit Attainment
Percentage. The relationship between the Profit Attainment Percentage
and the Payout Percentage is approved by the Committee and presented in
Exhibit III.
F. "Personal Evaluation Percentage" will mean the percentage of the Bonus
paid for the Participant's individual performance during the Plan Year
as determined from the performance or MBO rating. See Exhibit IV.
G. "Threshold" will mean the minimum level of net income required for
payout under the Earnings Portion of this Plan. See Exhibit II.
5. COMPONENTS OF THE BONUS.
The Bonus is composed of a GATX Earnings Portion, a Subsidiary Earnings
Portion and a Personal Portion. As soon as practical following the start of
each Plan Year, the Committee will establish Income Goals for GATX and each
participating subsidiary.
A. GATX Earnings Portion - The extent to which GATX meets its Income Goal -
determined by reference to the Profit Attainment Percentages (Exhibit
III) - will be the basis for the GATX Earnings Portion of the Bonus for
both corporate and subsidiary participants.
B. Subsidiary Earnings Portion - for subsidiary Participants, the extent to
which each subsidiary meets its Income Goals - determined by reference
to the Profit Attainment Percentages (Exhibit III) - will be the basis
for that subsidiary's Earnings Portion of the Bonus.
For corporate Participants, the Subsidiary Earnings Portion will
recognize the relative proportion of the Income Goals established for
each participating subsidiary. At the start of the Plan Year, each
participating subsidiary will be assigned a weight by the Committee
calculated on the basis of its Income Goals as a percent of the total of
the Income Goals of all participating subsidiaries, with a minimum
weight of 5.0% (Exhibit II). The extent to which each subsidiary meets
its Income Goal - determined by reference to the Profit Attainment
Percentages (Exhibit III) - will be the basis for the Subsidiary
Earnings Portion of the Bonus.
C. Personal Portion - The Personal Portion recognizes the level of the
Participant's individual performance (Exhibit IV). The percentage of
the Bonus represented by the Personal Portion may vary depending upon
whether or not the Threshold levels established annually for GATX (for
corporate Participants) and the subsidiaries (for subsidiary
Participants) are met.
2
<PAGE>
6. WEIGHTING OF THE COMPONENTS OF THE BONUS.
As soon as practical following the start of each Plan Year, the Committee
will determine the weight to be allocated to each of the component parts of
the Bonus identified in paragraph 5 hereof. For the current Plan Year, the
component parts of the Bonus for each category of participant are attached
as Exhibit I.
7. CALCULATION OF THE BONUS.
A. The weighting of the Income Goals is multiplied by a Participant's
Target Bonus to determine the Target Value for the Income Goals.
(Exhibit V, Section A.)
B. Payout Percentages are determined from the Profit Attainment Percentages
as described in paragraph 5 (Exhibit V, Section B).
C. Payout Percentages are multiplied by the Target Values of the Income
Goals to determine the Earnings Portion of the Bonus. (Exhibit V,
Section C.) The Personal Portion is determined by multiplying the
Target Value of the Personal Portion by the Personal Evaluation
Percentage as determined from the table attached as Exhibit IV.
D. The Bonus will be the sum of the Earnings Portions and the Personal
Portion of the Bonus, provided that no Bonus payment will be made with
respect to the Earnings Portions unless the Company and participating
subsidiaries reach Threshold levels as established by the Committee.
8. ADMINISTRATION OF THE PLAN
A. Administration.
Administration of the Plan will be the responsibility of the Committee
which may delegate responsibility thereunder to the Corporate Director
of Compensation, Corporate Human Resources Department.
B. New Participants.
Subject to the provisions of the following sentence, new employees who
joint the Company during the Plan Year may be authorized to participate
in the Plan on a pro-rate basis with the approval of the Chief Executive
Officer. Participation under this Plan will not be available to any new
participant after October 1st of any Plan Year.
C. Transfers and Promotions.
If a Participant is transferred or promoted during the Plan Year causing
an adjustment in his Target Bonus, such Participant's Bonus will be
calculated on a pro-rata basis to reflect this change, but in no event
will a participation addition be made after October 1st.
3
<PAGE>
D. Retirement, Death or Disability.
A Participant who retires, dies, or becomes totally and permanently
disabled, as that term is defined in the GATX Pension Plan for Salaried
Employees, during the Plan Year will be entitled to a pro-rated bonus in
accordance with Paragraph E.
E. Payment of Bonus.
Bonuses will be paid as soon as possible after the completion of the
Company's year-end audit, normally no later than March 1. The
Participant does not have a contractual right to receive the Bonus.
Participants become entitled to receive Bonus payments only after the
payments have been approved and authorized by the Committee.
F. Employment as a Condition Precedent.
No bonus will be paid, except pursuant to the provisions of Paragraph D
above, unless the Participant is an employee of the Company at the end
of the Plan Year.
G. No Employment Contract.
Neither the establishment of the Plan nor the authorization to be a
Participant in the Plan will be construed as giving the Participant the
right to be retained in the service of the Company.
H. Modification of Goals.
The Committee may, from time to time during the Plan Year, modify the
Plan as appropriate including (i) Income Goals, (ii) Thresholds, (iii)
Payout Percentages, (iv) assigned weights established for one or more
subsidiaries and (v) weighting of the Components of the Bonus if, in the
sole discretion of the Committee, any part of the Plan, including the
Income Goals, Thresholds, Payout Percentages, and weighting of the
Components of the Bonus previously established cease to be reasonable
measures of desired performance. Notwithstanding anything to the
contrary contained herein, the Committee shall have the authority and
exclusive discretion to determine whether income or expenses of an
unusual or nonreoccurring nature are to be included with other income of
the Company for purposes of determining whether the established Income
Goals have been achieved.
4
<PAGE>
<TABLE>
EXHIBIT I
WEIGHTING OF THE COMPONENTS OF THE BONUS
1993 MANAGEMENT INCENTIVE COMPENSATION PLAN
<CAPTION>
<S> <C>
CEO 100% GATX
OTHER SENIOR CORPORATE OFFICERS 30% GATX
and SUBSIDIARY PRESIDENTS 70% subsidiary or combined subsidiaries
----
100%
====
OTHER PARTICIPANTS 10% GATX
40% subsidiary or combined subsidiaries
50% Personal*
----
100%
====
* 30% if Threshold not met
</TABLE>
<PAGE>
<TABLE>
EXHIBIT II
INCOME GOALS, WEIGHTING OF THE INCOME GOALS, THRESHOLDS
1993 MANAGEMENT INCENTIVE COMPENSATION PLAN
1993 INCOME GOALS ($ in 000'S)
<CAPTION>
NET
INCOME CORP STAFF
GOAL WEIGHTING
------ ----------
<S> <C> <C>
GATC 57,171 49.46%
CAPITAL 20,249 17.52%
TERMINALS 26,122 22.60%
ASC 6,260 5.42%
LOGISTICS 3,150 5.00%
GATX CORP 78,990 0.00%
-------
100.00%
=======
THRESHOLDS
The Threshold will be 80% of the Income Goal for GATX and each participating
subsidiary with the exception of GATC, for which the Threshold will be 85% of
the Income Goal.
</TABLE>
<PAGE>
<TABLE>
EXHIBIT III
PROFIT ATTAINMENT AND PAYOUT PERCENTAGES
1993 MANAGEMENT INCENTIVE COMPENSATION PLAN
<CAPTION>
PAYOUT PERCENTAGE
PROFIT ATTAINMENT ---------------------------------------
PERCENTAGE GATX & ALL SUBS EXCEPT GATC GATC
- ----------------- --------------------------- ----
<S> <C> <C> <C>
Threshold 80 30
81 35
82 40
83 45
84 50
GATC 85 55 55
86 60 60
87 65 65
88 70 70
89 75 75
90 80 80
91 83 83
92 86 86
93 89 89
94 92 92
95 95 95
96 96 96
97 97 97
98 98 98
99 99 99
100 100 100
101 101 101.3
102 102 102.7
103 103 104
104 104 106
105 105 110
106 108 114
107 111 118
108 114 122
109 117 126
110 120 130
111 123 134
112 126 138
113 129 142
114 132 146
115 135 150
116 138
117 141
118 144
119 147
120 150
Actual Payout Percentage will be interpolated, if necessary.
</TABLE>
<PAGE>
<TABLE>
EXHIBIT IV
PERFORMANCE EVALUATION PERCENTAGE DETERMINATION
1993 MANAGEMENT INCENTIVE COMPENSATION PLAN
<CAPTION>
Performance
Evaluation
Rating Evaluation Criteria Percentage
- ------ -------------------------------------------------- -----------
<S> <C> <C>
4 Performance was outstanding; consistently exceeded 150%
job requirements during the performance period.
3 Performance was fully satisfactory; met or at times 100%
exceeded job requirements during the performance
period.
2 Performance was less than satisfactory; some but 50%
not all job requirements were met during the
performance period.
1 Performance was very unsatisfactory; few job -0-
requirements were met during the performance period.
* * *
MANAGEMENT BY OBJECTIVES (MBO) RATINGS
-----------------------------------------------------
4 Substantially Exceeding Target 150%
3 On Target or Exceeding Target 100%
2 Progressing 50%
1 Not on Target -0-
Actual ratings may include a decimal place, i.e. a rating of 3.5 would result in
125% of the Personal Portion.
</TABLE>
<PAGE>
<TABLE>
EXHIBIT V
1993 MANAGEMENT INCENTIVE COMPENSATION PLAN
BONUS CALCULATION EXAMPLE
<CAPTION>
Employee: (Corporate Participant) Base Salary $75,000
Target Percentage 20.0%
Target Bonus $15,000
A. TARGETS - EARNINGS AND PERSONAL PORTIONS
Factor Weighting Target Bonus Target Value
- --------------- ----------------------- ------------ ------------
<S> <C> <C> <C>
1. CORP INCOME 10% = 10.000% $15,000.00 $1,500.00
2. GATC 49.46% x 40% = 19.784% $15,000.00 $2,967.60
Capital 17.52% x 40% = 7.008% $15,000.00 $1,051.20
Terminals 22.60% x 40% = 9.040% $15,000.00 $1,356.00
ASC 5.42% x 40% = 2.168% $15,000.00 $325.20
Logistics 5.00% x 40% = 2.000% $15,000.00 $300.00
3. PERSONAL 50% = 50.000% $15,000.00 $7,500.00
-------- ----------
TARGET AMOUNT 100.000% $15,000.00
======== ==========
B. GATX AND SUBSIDIARY PERFORMANCE
Factor Threshold Income Goal Actual Profit % Payout %
- --------------- ---------- ----------- ---------- -------- --------
<S> <C> <C> <C> <C> <C>
1. CORP INCOME 63,192,000 78,990,000 77,000,000 97.5% 97.5%
2. GATC 48,595,350 57,171,000 54,038,000 94.5% 93.5%
Capital 16,199,200 20,249,000 19,500,000 96.3% 96.3%
Terminals 20,897,600 26,122,000 23,755,000 90.9% 82.7%
ASC 5,008,000 6,260,000 6,213,000 99.2% 99.2%
Logistics 2,520,000 3,150,000 2,650,000 84.1% 50.5%
C. INDIVIDUAL BONUS CALCULATION
Factor Payout % Target Value Award
- --------------- -------- ------------ ---------
<S> <C> <C> <C> <C>
1. CORP INCOME 97.5% x $1,500.00 = $1,462.50 $1,462.50
-------------------------
2. GATC 93.5% x $2,967.60 = $2,774.71
Capital 96.3% x $1,051.20 = $1,012.31
Terminals 82.7% x $1,356.00 = $1,121.41
ASC 99.2% x $325.20 = $322.60
Logistics 50.5% x $300.00 = $151.50 $5,382.53
-------------------------
3. PERSONAL 125.0% x $7,500.00 = $9,375.00 $9,375.00
-------------------------
TOTAL BONUS $16,220.03
</TABLE>
<PAGE>
EXHIBIT 10J
AGREEMENT OF AMENDMENT
This Agreement of Amendment is made and entered into as of
April 23, 1993, by and between _______________________, a wholly
owned subsidiary of GATX Corporation, (the "Employer") and
______________ (the "Employee").
WHEREAS, the Employer and the Employee have entered into one
or more Participation Agreements setting forth the terms and
conditions under which the Employee participates in the
Employer's Executive Deferred Compensation Plan, each effective
as of the dates set forth in Exhibit A attached hereto; and
WHEREAS, certain of the Participation Agreements have
heretofore been amended each effective as of January 1, 1990,
(hereinafter the "1990 Amendment") to specify the circumstances
and conditions under which such agreements shall be deemed
"Continuing Agreements" following a change of control (as defined
in paragraph 14 of the Participation Agreements); and
WHEREAS, the parties desire to further amend such Participa-
tion Agreements and the January 1990 Amendment to provide for the
vesting of certain benefits thereunder prior to the date on which
the Employee attains age sixty-five.
NOW THEREFORE, the parties hereto agree as follows:
1. That the Participation Agreements be and hereby are
amended by deleting the phrase "65th birthday" where
such phrase appears in (i) the second sentence of
paragraph 2, (ii) the first sentence of paragraph 3,
and (iii) twice in the first sentence of paragraph 7
thereof, and substituting therefore the phrase
"Earliest Retirement Date".
2. That paragraph 13 of the Participation Agreements be
and hereby is amended by inserting immediately after
the word "if" where such word first appears therein,
the following: "prior to the Employee's Earliest
Retirement Date,".
3. That paragraph 14 of the Participation Agreements be
and hereby is amended by deleting the phrase "age 65"
where it appears therein, and substituting therefore
the phrase "the Employee's Earliest Retirement Date".
4. That the Participation Agreements be, and hereby are
amended by adding the following thereto as a new para-
graph 20:
<PAGE>
"20. Employee's Earliest Retire-
ment Date. As used herein, the
term "Employee's Earliest Retire-<PAGE>
ment Date" shall mean the earliest of the fol-
lowing:
(a) The date on which the Employee at-
tains age 65,
(b) The date on which the Employee at-
tains age 62 and has fifteen or
more years of Service Credit (as
that term is defined in the GATX
Non-Contributory Pension Plan For
Salaried Employees, but including
for purposes of the definition any
additional years of Service Credit
attributable to the Employee pur-
suant to the terms of a written
agreement between the Employee and
the Employer providing for supple-
mental retirement benefits),
(c) The date on which the Employee's
age and total years of Service
Credit (which must be not less
than 30) total 90, or
(d) The date on which the Employee's
employment with the Employer is
terminated due to permanent shut-
down of a plant, department or
subdivision thereof or due to
layoff, provided on such date: (i)
the Employee has fifteen years or
more of Service Credit and (ii)
either (A) the Employee has at-
tained age 55 and his age and
years of Service Credit total at
least 75 or (B) the Employee's age
and years of Service Credit total
at least 80."
5. That the 1990 Amendment be, and hereby is, amended by
deleting the phrase "age 65" where that phrase first
appears in the paragraph entitled "14. Changes in
Control of GATX Corporation," of the 1990 Amendment and
substituting therefore the phrase "the Employee's
Earliest Retirement Date".
6. That subparagraph (b) of the 1990 Amendment be, and
hereby is, deleted in its entirety, and the following
substituted therefore:
<PAGE>
"(b) if the Employee is 55 years
or older on the day of such termi-
nation of employment, this Parti-
cipation Agreement shall remain in
effect and, unless the Employee
dies prior to reaching age 65 (in
which case the Employee shall be
deemed to have died while employed
by GATX), the Employee (and his
beneficiaries) shall be entitled
to the benefits hereunder in the
same manner as if the Employee had
remained in the continuous employ
of the Employer until the Employee
retired on the Employee's Earliest
Retirement Date."
7. In all other respects, the Participation Agreements and
the 1990 Amendment are hereby ratified and affirmed.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement of Amendment as of the day, month and year first above
written.
- ------------------------- GATX CORPORATION
----------------------
(Name) Employer
Employee
By:_____________________
CHAIRMAN OF THE BOARD
<TABLE>
EXHIBIT 11.A
GATX CORPORATION AND SUBSIDIARIES
COMPUTATION OF NET INCOME (LOSS) PER SHARE OF
COMMON STOCK AND COMMON STOCK EQUIVALENTS
<CAPTION>
Year Ended December 31
1993 1992 1991 1990 1989
(In millions, except per share amounts)
<S> <C> <C> <C> <C> <C>
Average number of shares
of Common Stock outstanding 19.6 19.4 19.3 19.1 18.2
Shares issuable upon
assumed conversion of 5 3/4%
Convertible Subordinated Debentures - - - - .8
Shares issuable upon assumed exercise
of stock options, reduced by the
number of shares which could have
been purchased with the proceeds
from exercise of such options .3 * .2 .2 .2
------ ------ ------ ------ ------
Total 19.9 19.4 19.5 19.3 19.2
====== ====== ====== ====== ======
Net income (loss) $ 72.7 $(16.5)$ 82.7 $ 82.9 $ 65.7
Deduct - Dividends paid and
accrued on Preferred Stock 13.3 13.3 13.3 13.4 5.4
------ ------ ------ ------ ------
Income (loss) applicable to Common Stock 59.4 (29.8) 69.4 69.5 60.3
Add - Interest on 5 3/4% Convertible
Subordinated Debentures, less
applicable income taxes - - - - .8
------ ------ ------ ------ ------
Net income (loss), as adjusted $ 59.4 $(29.8)$ 69.4 $ 69.5 $ 61.1
====== ====== ====== ====== ======
Net income (loss) per share $ 2.99 $(1.53)$ 3.56 $ 3.61 $ 3.18
====== ====== ====== ====== ======
* Common share equivalents are not considered in the computation of loss per
share.
</TABLE>
-32-
</TEXT/
<PAGE>
<TABLE>
EXHIBIT 11.B
GATX CORPORATION AND SUBSIDIARIES
COMPUTATION OF NET INCOME (LOSS) PER SHARE OF COMMON STOCK AND
COMMON STOCK EQUIVALENTS ASSUMING FULL DILUTION
(PRINCIPALLY CONVERSION OF ALL OUTSTANDING PREFERRED STOCK)
<CAPTION>
Year Ended December 31
1993 1992 1991 1990 1989
(In millions, except per share amounts)
<S> <C> <C> <C> <C> <C>
Average number of shares used to
compute primary earnings per share 19.9 19.4 19.5 19.3 19.2
Common Stock issuable upon assumed
conversion of Preferred Stock * * 4.1 4.1 1.8
------ ------ ------ ------ ------
Total 19.9 19.4 23.6 23.4 21.0
====== ====== ====== ====== ======
Net income (loss) as adjusted
per primary computation $ 59.4 $(29.8)$ 69.4 $ 69.5 $ 61.1
Add - Dividends paid and
accrued on Preferred Stock * * 13.3 13.4 5.4
------ ------ ------ ------ ------
Net income (loss), as adjusted $ 59.4 $(29.8)$ 82.7 $ 82.9 $ 66.5
====== ====== ====== ====== ======
Net income (loss) per share,
assuming full dilution $ 2.99 $(1.53)$ 3.51 $ 3.54 $ 3.16
====== ====== ====== ====== ======
* Conversion of Preferred Stock is excluded from computation of fully diluted
earnings because of antidilutive effects.
Additional fully diluted computation (1)
Average number of shares used to
compute primary earnings per share.. 19.6 19.4
Common stock issuable upon assumed
conversion of Preferred Stock, and
stock option exercises............... 4.4 4.3
----------------
24.0 23.7
================
Net income (loss) as adjusted
per primary computation............. $ 59.4 $(29.8)
Add - Dividends paid and accrued
on Preferred Stock.................. 13.3 13.3
---------------
$ 72.7 $(16.5)
================
Net income (loss) per share,
assuming full dilution.............. $ 3.03 $( .70)
================
(1) This calculation is submitted in accordance with Regulation S-K item
601(b)(11) although it is contrary to paragraph 40 of APB Opinion No. 15
because it produces an antidilutive result.
</TABLE>
-33-
<TABLE>
EXHIBIT 12
GATX CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIOS OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
(IN MILLIONS EXCEPT FOR RATIOS)
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Earnings available for fixed charges:
Net income (loss) $ 72.7 $(16.5) $ 82.7
Add (deduct):
Income taxes 51.4 9.6 33.6
Cumulative effect of accounting changes - 45.8 -
Equity in net earnings of affiliated companies,
net of distributions received 8.0 31.7 1.5
Interest on indebtedness and amortization
of debt discount and expense 151.8 176.1 181.9
Amortization of capitalized interest 1.1 1.1 .8
Portion of rents representative of
interest factor (deemed to be one-third) 31.4 25.5 20.2
------ ------ ------
Total earnings available for fixed charges $316.4 $273.3 $320.7
====== ====== ======
Preferred dividend requirements $ 13.3 $ 13.3 $ 13.3
Ratio to convert preferred
dividends to pretax basis (A) 197% 281% 157%
------ ------ ------
Preferred dividend factor on pretax basis 26.2 37.4 20.9
Fixed charges:
Interest on indebtedness and amortization
of debt discount and expense 151.8 176.1 181.9
Capitalized interest 2.7 4.2 5.4
Portion of rents representative of interest
factor (deemed to be one-third) 31.4 25.5 20.2
------ ------ ------
Combined fixed charges and
preferred stock dividends $212.1 $243.2 $228.4
====== ====== ======
Ratio of earnings to combined fixed charges
and preferred stock dividends (B) 1.49x 1.12x 1.40x
<FN>
(A) To adjust preferred dividends to a pretax basis, income before income taxes and equity in net earnings of affiliated
companies and, in 1992, the cumulative effect of accounting changes, is divided by income before equity in net earnings of
affiliated companies and, in 1992, the cumulative effect of accounting changes.
(B) The ratios of earnings to combined fixed charges and preferred stock dividends represent the number of times "fixed
charges and preferred stock dividends" were covered by "earnings." "Fixed charges and preferred stock dividends" consist
of interest on outstanding debt and capitalized interest, one-third (the proportion deemed representative of the interest
factor) of rentals, amortization of debt discount and expense, and dividends on preferred stock adjusted to a pretax
basis. "Earnings" consist of consolidated net income before income taxes, fixed charges, and, in 1992, the cumulative
effect of accounting changes, less equity in net earnings of affiliated companies, net of distributions received.
</FN>
</TABLE>
EXHIBIT 13
GATX REVIEW OF FINANCIAL OPERATIONS
GATX Corporation and Subsidiaries
28
Reports of GATX Management and of Ernst & Young, Independent Auditors
29
Management Discussion and Analysis (Continued on pages 37, 39 and 41)
32
Financial Data of Business Segments
36
Statements of Consolidated Income and Reinvested Earnings
38
Consolidated Balance Sheets
40
Statements of Consolidated Cash Flows
43
Notes to Consolidated Financial Statements
59
Quarterly Results of Operations (Unaudited) and Common and Preferred Stock
Information
60
Selected Financial Data
62
Prior Year's Management Discussion of Operations: 1992-91
BUSINESS SEGMENTS
The following summary describes GATX's current business segments:
RAILCAR LEASING AND MANAGEMENT
represents General American Transportation Corporation and its foreign
affiliate (Transportation), which lease and manage tank cars and other
specialized railcars.
FINANCIAL SERVICES
represents GATX Financial Services, which through its principal subsidiary
GATX Capital Corporation as well as its subsidiaries and joint ventures,
arranges and services the financing of equipment and other capital assets on a
world-wide basis.
TERMINALS AND PIPELINES
represents GATX Terminals Corporation and its domestic and foreign
subsidiaries and affiliates, which own and operate tank storage terminals,
pipelines and related facilities.
GREAT LAKES SHIPPING
represents American Steamship Company (ASC), which operates self-unloading
vessels on the Great Lakes.
LOGISTICS AND WAREHOUSING
represents GATX Logistics, Inc. (Logistics), which provides distribution and
logistics support services, warehousing facilities, and related real estate
services throughout North America.
27
<PAGE>
REPORT OF GATX MANAGEMENT
GATX Corporation and Subsidiaries
To Our Shareholders:
The management of GATX Corporation has prepared the accompanying consolidated
financial statements and related information included in this 1993 Annual Report
to Shareholders, and management has the primary responsibility for the integrity
of this information.
The financial statements have been audited by the company's independent
auditors, whose report thereon appears on this page. Their role is to form an
independent opinion as to the fairness with which such statements present the
financial position of the company and the results of its operations.
GATX maintains a system of internal accounting controls which is designed to
provide reasonable assurance as to the reliability of its financial records and
the protection of its shareholders' assets. The concept of reasonable assurance
is based on the recognition that the cost of a system of internal control should
not exceed the related benefits. Management believes the company's system
provides this appropriate balance in all material respects.
GATX's system of internal controls is further augmented by an audit committee
composed of directors who are not officers or employees of GATX, which meets
regularly throughout the year with management, the independent auditors and the
internal auditors; an internal audit program that includes prompt, responsive
action by management; and the annual audit of the company's financial statements
by independent auditors.
/S/James J. Glasser
- -----------------------------------
James J. Glasser
Chairman of the Board, President
and Chief Executive Officer
/S/John F. Chlebowski, Jr.
- -----------------------------------
John F. Chlebowski, Jr.
Vice President, Finance and
Chief Financial Officer
/S/Ralph L. O'Hara
- -----------------------------------
Ralph L. O'Hara
Controller and
Chief Accounting Officer
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
To the Shareholders and
Board of Directors of
GATX Corporation:
We have audited the accompanying consolidated balance sheets of GATX Corporation
and subsidiaries as of December 31, 1993 and 1992, and the related statements of
consolidated income and reinvested earnings and consolidated cash flows for each
of the three years in the period ended December 31, 1993. These financial
statements are the responsibility of the company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of GATX Corporation
and subsidiaries as of December 31, 1993 and 1992, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1993, in conformity with generally accepted accounting principles.
As discussed in the notes to the consolidated financial statements, in 1992 the
Company changed its method of accounting for postretirement benefits other than
pensions and income taxes.
ERNST & YOUNG
Chicago, Illinois
January 25, 1994
28
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS
GATX Corporation and Subsidiaries
GATX reported net income of $73 million or $2.99 per common share for the year
ended December 31, 1993 compared to a net loss of $17 million or $1.53 per
common share for 1992. Overall, operating income improved in 1993 compared to
1992 due to better results at Transportation and Terminals, and higher
dispositions gains and a lower loss provision at Financial Services. The
comparison between years is impacted by the Federal tax rate increase in 1993
and the adoption of two accounting pronouncements in 1992. The 1992 loss was
due to the adoption of two accounting pronouncements which resulted in a one-
time non-cash net accounting charge of $46 million and the recording of a $37
million aftertax special provision to the loss reserve reflecting the continued
deterioration in the freighter aircraft and real estate portfolios. Before the
cumulative effect of the accounting changes, 1992 earnings were $29 million or
$.82 per common share. Despite the continuing strength in its operations, GATX
has not seen any substantial improvements in the overall economic environment
for its businesses.
GATX's return on common equity for 1993 was 14.6%. The improvement from 1992's
return of 3.6% before the cumulative effect of the accounting changes was due to
the combined effects of higher earnings and lower average equity.
As a result of new tax legislation which increased the federal income tax rate
from 34% to 35% retroactively to January 1, 1993, net income for 1993 included
an increase to income taxes of $7 million for the cumulative increase in
deferred income taxes and a $1 million increase for the current year. The
impact of the tax rate change by segment is shown in a table on page 33.
In 1992, GATX adopted Statement of Financial Accounting Standards (SFAS) No. 106
and SFAS No. 109. SFAS No. 106 changed the method of accounting for
postretirement benefits from the pay-as-you-go method to the accrual basis.
SFAS No. 109 revised the method of accounting for deferred income taxes to the
liability method. The adjustments for the adoption of these statements are
shown by segment in a table on page 33. The following discussion addresses 1992
income before the impact of these accounting changes. In addition, 1993 income
from operations is discussed before the impact of the tax rate change.
The comparative performance for 1992 versus 1991 is discussed in the prior
year's management discussion on pages 62 and 63 of this report.
RAILCAR LEASING AND MANAGEMENT
Transportation's gross income of $302 million increased $13 million from 1992.
Rental revenues increased 4% attributable to an average of 940 additional cars
on lease and higher average rental rates. The increased level of additions to
the fleet was in anticipation of increased demand for new tank cars.
Transportation had approximately 51,900 railcars on lease at December 31, 1993
compared to 50,100 a year earlier, and fleet utilization improved to 93% from
92% at the end of 1992.
Income from operations of $53 million increased 7% over 1992 as higher revenues
and lower ownership costs were somewhat offset by increased fleet repair
expenses. Ownership costs, consisting of rental expense, depreciation and
interest, decreased slightly despite an increased fleet size due to lower
interest rates, debt refinancings and interest rate swaps which were executed to
more closely match Transportation's debt with the railcar lease terms. Earnings
for 1992 reflect a $1 million pretax charge related to refinancing equipment
trust certificates at favorable rates.
Fleet repair costs increased 9% from last year reflecting higher volumes as a
result of regulatory and customer requirements. Operating margins decreased
slightly as the increase in fleet repair costs exceeded the growth in revenues.
The pressure on operating margins is expected to continue as Transportation's
own commitment to provide its customers with well maintained railcars coupled
with stricter maintenance standards in the industry and increased work required
as a result of mandated inspection programs continue to increase repair costs.
The project to upgrade the company's repair facilities is intended to control
costs by improving the efficiency and productivity of the repair process for the
company's railcars.
29
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
GATX Corporation and Subsidiaries
FINANCIAL SERVICES
Financial Services' gross income of $204 million exceeded the prior year by $26
million primarily due to higher disposition gains. Pretax disposition gains,
which do not fall evenly period to period, were $44 million for 1993 compared to
$22 million in 1992. Disposition gains for 1993 included a $17 million gain
from an insurance settlement related to marine equipment. The balance of the
disposition gains was generated primarily from the sale of rail equipment and
aircraft. Lease income increased $10 million to an all-time high of $125
million principally due to new lease volume in 1993 of approximately $200
million. These increases were partially offset by lower fee and interest
income. Fee income decreased $5 million due to changes in the international
markets. The decrease in interest income of $2 million corresponds to the
decrease in the secured loan portfolio.
Income from operations was $24 million compared to a loss of $17 million in
1992. The substantial earnings improvement was principally attributable to the
special loss provision recorded in 1992 and the higher level of disposition
gains recorded in 1993. The loss provision for 1993 was $29 million compared to
$81 million in 1992, which included a $60 million special provision to the loss
reserve reflecting the continued deterioration in the freighter aircraft and
real estate portfolios. The current year provision reflects continuing concern
relating to the values of certain aircraft types. The loss reserve at year end
was $88 million or 6.9% of portfolio investments. Interest expense decreased $7
million from last year due to lower interest rates and lower average debt
outstanding. Operating lease expense increased $13 million due to the increased
level of operating lease investment and accelerated aircraft depreciation.
Equity in net earnings of affiliated companies of $5 million in 1993 decreased
$3 million from 1992 primarily due to less income from technology joint ventures
and a gain on the sale of a real estate joint venture included in 1992.
Although overcapacity in nearly all types of aircraft is being slowly absorbed,
near-term aircraft demand should remain weak. New aircraft production rates are
being lowered and older aircraft are forecasted to be retired at higher than
historical rates. This bodes well for aircraft leasing in the long term. In
addition, real estate continues to be depressed, although some liquidity has
returned to the market.
TERMINALS AND PIPELINES
Terminals' gross income of $281 million increased $15 million from 1992
reflecting continuing strong demand for tanks and blending services at domestic
petroleum terminals. Capacity utilization at Terminals' wholly-owned facilities
was 92% at year end, up from 91% a year ago. Throughput from these facilities
of 635 million barrels was down 4 million barrels from 1992 reflecting changes
in the operating pattern of certain customers.
Terminals' income from operations of $29 million increased 24% from the prior
year. Higher revenues, reduced interest expense reflecting lower interest rates
and debt refinancings, and improved margins were partially offset by higher SG&A
expense and decreased earnings at foreign affiliates. Even though revenues
increased, operating costs were flat with 1992 due to cost controls resulting in
improved operating margins. However, ongoing maintenance spending is expected
to continue to grow in keeping with GATX's commitment to operate environmentally
responsible facilities. SG&A costs increased 18% due to higher relocation,
consulting, and information systems costs. Equity in net earnings of Terminals'
foreign affiliates of $10 million decreased $2 million from 1992 reflecting the
weak economies in Europe and Japan. Terminals' consolidated earnings in 1992
were negatively affected by $2 million of pretax charges relating to the
recognition of debt issuance costs and call premiums associated with debt
refinancings at favorable terms and interest rates.
30
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS (Continued)
GATX Corporation and Subsidiaries
GREAT LAKES SHIPPING
American Steamship Company's gross income of $81 million increased $2 million
over 1992 as the result of the sale of a bankruptcy claim. Tonnage carried in
1993 of 24.4 million tons increased slightly from the prior year's 23.9 million
tons in response to high steel production and late season operations to meet
customers' winter inventory requirements. However, the Great Lakes shipping
industry continued to be faced with excess capacity, which resulted in
aggressive rate competition. As a result, freight revenue per ton decreased
slightly from 1992 reflecting the competitive rate pressure on new contracts,
particularly from steel industry customers. ASC has responded to downward rate
pressure by securing extensions to freight agreements and increasing tonnage
commitments. This downward pressure on rates is expected to continue in the
near term.
Income from operations of $7 million increased $1 million over the prior year
primarily reflecting the sale of the bankruptcy claim and the refinancing of
debt. Operating margins decreased slightly from 1992 as the reduction in rates
was largely offset by a reduction in operating costs due to lower costs for fuel
and maintenance and repairs.
The economic climate of the Great Lakes region showed moderate signs of
improvement. ASC's stone deliveries showed a significant volume increase during
the year and should remain firm in 1994. The Eastern coal market should
stabilize in 1994 following the late settlement of the seven month United Mine
Workers strike. The outlook on finished steel prices remains promising, which
should keep shipments of iron ore at a steady pace.
LOGISTICS AND WAREHOUSING
GATX Logistics' gross income of $224 million increased $12 million over 1992 due
to increased volumes and new customers. Total square footage of warehousing
space increased over a year ago to 22 million square feet reflecting greater
demand by customers for space. Space utilization was 94% at the end of 1993
compared to 90% a year ago. However, empty space continues to be a problem in
certain regions of the country.
Logistics' net income was $.1 million in 1993 compared to $.9 million in 1992.
The decrease from 1992 reflects increased systems costs, decreased labor
efficiencies, and lower contribution margins as continuing margin pressure and
the competitive environment are limiting operating profits. Certain
transportation operations continue to perform at unacceptable levels; actions
being taken include rate increases and fleet downsizing.
Logistics is currently in the process of identifying and establishing priorities
for service offerings that will better position the company for contract
business in the future to improve profitability.
CORPORATE AND OTHER
Corporate and Other net expense was $31 million compared to $34 million in 1992.
The primary reason for the improvement in 1993 was the result of an additional
tax provision of $4 million recorded in 1992 associated with the liquidation of
a foreign finance subsidiary, the gain in 1993 on the sale of an insurance
investment, and reduced interest expense due to lower interest rates and debt
refinanings. These were partially offset by legal expenses regarding a
shareholder suit which GATX believes is without merit and is defending
vigorously.
The management discussion and analysis of the financial statements is continued
on pages 37, 39 and 41.
31
<PAGE>
FINANCIAL DATA OF BUSINESS SEGMENTS
GATX Corporation and Subsidiaires
GATX provides services to a variety of capital goods markets through five
principal business segments. The financial data which are presented on this and
the following three pages depict the profitability, financial position, and cash
flow of each of GATX's business segments.
The presentation of segment profitability includes the direct costs incurred at
the segment's operating level plus expenses allocated by the parent company.
Allocated expenses represent costs which these operations would have incurred
otherwise, but do not include general corporate expense or interest on debt of
the parent company. Interest costs associated with segment indebtedness are
included in the determination of profitability of each segment since interest
expense directly influences any investment decision and the evaluation of
subsequent operational performance. Interest expense by segment has been shown
separately on page 35 to enable the reader to ascertain segment profitability
before deducting interest expense.
SEGMENT PROFITABILITY (In Millions):
<TABLE>
<CAPTION>
GROSS INCOME 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Railcar Leasing and Management$ 302.2 $ 289.3 $ 285.3 $ 279.4 $ 261.2
Financial Services 204.0 177.7 205.6 184.5 165.8
Terminals and Pipelines 281.1 266.5 249.7 229.7 181.1
Great Lakes Shipping 80.6 78.7 76.0 79.3 73.7
Logistics and Warehousing 224.4 212.2 174.0 98.1 23.5
------ ------ ------ ----- -----
Subtotal 1,092.3 1,024.4 990.6 871.0 705.3
Corporate and Other (5.4) (5.3) (1.5) (.6) (3.6)
------ ------ ------ ----- -----
Total Consolidated Amounts $1,086.9 $1,019.1 $ 989.1 $ 870.4 $ 701.7
</TABLE>
<TABLE>
<CAPTION>
INCOME BEFORE INCOME TAXES, EQUITY
IN NET EARNINGS OF AFFILIATED
COMPANIES AND CUMULATIVE
EFFECT OF ACCOUNTING CHANGES 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Railcar Leasing and Management$ 74.4 $ 68.4 $ 73.6 $ 75.3 $ 73.1
Financial Services 34.5 (38.9) 35.6 50.3 48.2
Terminals and Pipelines 30.2 19.8 14.9 19.4 30.4
Great Lakes Shipping 10.2 9.3 8.6 6.7 4.0
Logistics and Warehousing 2.5 3.8 .5 .5 1.0
------ ------ ------ ----- -----
Subtotal 151.8 62.4 133.2 152.2 156.7
Corporate and Other:
Selling, general and
administrative expense (22.9) (18.9) (14.4) (16.2) (17.8)
Interest expense (18.4) (23.4) (24.8) (32.5) (45.0)
Other, net (6.1) (5.2) (1.9) .3 (1.9)
------ ------ ------ ----- -----
Subtotal (47.4) (47.5) (41.1) (48.4) (64.7)
------ ------ ------ ----- -----
Total Consolidated Amounts $ 104.4 $ 14.9 $ 92.1 $ 103.8 $ 92.0
</TABLE>
<TABLE>
<CAPTION>
EQUITY IN NET EARNINGS
OF AFFILIATED COMPANIES 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Railcar Leasing and Management$ 4.5 $ 4.5 $ 4.5 $ 4.2 $ 3.7
Financial Services 5.1 7.7 9.5 2.6 1.2
Terminals and Pipelines 10.1 11.8 10.2 7.6 4.3
------ ------ ------ ----- -----
Total Consolidated Amounts $ 19.7 $ 24.0 $ 24.2 $ 14.4 $ 9.2
</TABLE>
<TABLE>
<CAPTION>
INCOME BEFORE CUMULATIVE
EFFECT OF ACCOUNTING CHANGES 1993(A) 1992(B) 1991 1990 1989
------ ------ ------ ----- -----
<S> <C> <C> <C> <C> <C>
Railcar Leasing and Management$ 47.6 $ 49.4 $ 55.2 $ 57.2 $ 53.0
Financial Services 21.5 (16.7) 28.5 31.6 27.5
Terminals and Pipelines 26.5 23.4 19.0 19.4 23.8
Great Lakes Shipping 6.8 6.2 6.3 4.0 2.6
Logistics and Warehousing .1 .9 (.7) (.4) .4
------ ------ ------ ----- -----
Subtotal 102.5 63.2 108.3 111.8 107.3
Corporate and Other (29.8) (33.9) (25.6) (28.9) (41.6)
------ ------ ------ ----- -----
Total Consolidated Amounts $ 72.7 $ 29.3 $ 82.7 $ 82.9 $ 65.7
<FN>
(A) Income has been reduced by $8.5 million as a result of a change in the
federal tax rate (see following table for breakdown by segment).
(B) Income was further reduced by $45.8 million for the cumulative effect of
accounting changes resulting in a net loss of $16.5 million (see following
table for breakdown by segment).
</FN>
</TABLE>
32
<PAGE>
FINANCIAL DATA OF BUSINESS SEGMENTS (Continued)
GATX Corporation and Subsidiaries
FEDERAL TAX RATE CHANGE IN 1993
The following table shows the effect of the federal tax legislation enacted in
1993 which increased the federal income tax rate from 34% to 35% retroactively
to January 1, 1993. The income (loss) amounts for 1992 are shown before the
cumulative effect of accounting changes (SFAS No. 106 and No. 109) for
comparative purposes to 1993 income (loss) before tax rate change.
<TABLE>
<CAPTION>
Income (Loss)
Before
Cumulative
Income (Loss) Tax Net Effect of Net
Before Tax Rate Income Accounting Income
Rate Change Change (Loss) Changes (Loss)
In Millions, Except Per Share Data-------------1993--------------------1992-------
<S> <C> <C> <C> <C> <C>
Railcar Leasing and Management$ 52.7 $(5.1) $ 47.6 $ 49.4 $ 55.6
Financial Services 23.6 (2.1) 21.5 (16.7) (7.2)
Terminals and Pipelines 29.1 (2.6) 26.5 23.4 18.7
Great Lakes Shipping 6.8 - 6.8 6.2 2.0
Logistics and Warehousing .1 - .1 .9 .9
------ ------ ------ ----- -----
Subtotal 112.3 (9.8) 102.5 63.2 70.0
Corporate and Other (31.1) 1.3 (29.8) (33.9) (86.5)
---- --- ---- ---- ----
Total Consolidated Amounts $ 81.2 $(8.5) $ 72.7 $ 29.3 $(16.5)
Income (Loss)
Per Common Share $ 3.42 $(.43) $ 2.99 $ .82 $(1.53)
</TABLE>
ACCOUNTING CHANGES IN 1992
<TABLE>
The effect in 1992 of adopting SFAS No. 106 and No. 109 on net income for each
of GATX's segments is displayed below:
<CAPTION>
Income (Loss) Cumulative Effect of
Before Accounting Changes
Cumulative SFAS 106
Effect of Post- SFAS 109 Net
Accounting Retirement Income Income
Changes Benefits Taxes (Loss)
In Millions,
Except Per Share Data ----------------------1992----------------------
<S> <C> <C> <C> <C>
Railcar Leasing and Management$ 49.4 $(32.5) $ 38.7 $ 55.6
Financial Services (16.7) (.6) 10.1 (7.2)
Terminals and Pipelines 23.4 (7.7) 3.0 18.7
Great Lakes Shipping 6.2 (1.0) (3.2) 2.0
Logistics and Warehousing .9 - - .9
---- ---- ---- ----
Subtotal 63.2 (41.8) 48.6 70.0
Corporate and Other (33.9) (13.7) (38.9) (86.5)
---- ---- ---- ----
Total Consolidated Amounts $ 29.3 $(55.5) $ 9.7 $(16.5)
Income (Loss)
Per Common Share $ .82 $(2.85) $ .50 $(1.53)
</TABLE>
33
<PAGE>
FINANCIAL DATA OF BUSINESS SEGMENTS (Continued)
GATX Corporation and Subsidiaries
The financial position data below present the identifiable asset base of each of
GATX's business segments and the degree to which such assets have been financed
with external sources of capital. GATX utilizes additional assets which are
obtained through off-balance-sheet operating leases and therefore are not
included in identifiable assets.
FINANCIAL POSITION (In Millions):
<TABLE>
<CAPTION>
Identifiable
Assets 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Railcar Leasing and Management$1,701.0 $1,694.7 $1,678.3 $1,695.1 $1,577.4
Financial Services 1,240.1 1,320.0 1,366.0 1,158.5 1,026.1
Terminals and Pipelines 872.5 816.2 781.7 727.7 521.7
Great Lakes Shipping 194.5 204.8 199.8 205.5 207.6
Logistics and Warehousing 172.8 165.2 189.0 140.7 103.6
------ ----- ----- ------ ------
Subtotal 4,180.9 4,200.9 4,214.8 3,927.5 3,436.4
Corporate and Other 25.0 27.3 32.7 29.4 118.8
Intersegment Amounts (813.8) (801.9) (733.3) (647.2) (495.1)
------ ----- ----- ------ ------
Total Consolidated Amounts $3,392.1 $3,426.3 $3,514.2 $3,309.7 $3,060.1
</TABLE>
<TABLE>
<CAPTION>
Long-Term Debt
and Capital Lease Obligations 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Railcar Leasing and Management$ 744.8 $ 744.1 $ 829.3 $ 895.0 $ 780.2
Financial Services 715.3 728.4 689.2 542.5 406.3
Terminals and Pipelines 422.8 389.0 392.3 400.4 236.7
Great Lakes Shipping 122.6 127.1 131.6 136.4 140.5
Logistics and Warehousing 17.1 10.3 29.9 20.1 5.2
------ ----- ----- ------ ------
Subtotal 2,022.6 1,998.9 2,072.3 1,994.4 1,568.9
Intersegment Amounts (308.8) (274.3) (273.8) (279.3) (112.7)
------ ----- ----- ------ ------
Total Consolidated Amounts $1,713.8 $1,724.6 $1,798.5 $1,715.1 $1,456.2
</TABLE>
<TABLE>
<CAPTION>
Deferred Income
Taxes (Benefit) 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Railcar Leasing and Management$ 181.0 $ 175.1 $ 235.6 $ 236.1 $ 238.8
Financial Services (7.1) (7.8) 10.1 7.5 11.8
Terminals and Pipelines 87.0 76.8 70.5 57.4 69.1
Great Lakes Shipping 6.8 4.5 (2.6) (4.5) (4.8)
Logistics and Warehousing .8 (.1) - 1.2 1.3
------ ----- ----- ------ ------
Subtotal 268.5 248.5 313.6 297.7 316.2
Corporate and Other (20.3) (14.4) (10.0) 31.8 44.0
------ ----- ----- ------ ------
Total Consolidated Amounts $ 248.2 $ 234.1 $ 303.6 $ 329.5 $ 360.2
</TABLE>
Major components of GATX's cash flow are shown in the following tabular data.
GATX's cash flow from operations and portfolio proceeds has been strong over the
five-year period as a result of the long-lived asset base on which GATX has
built its service-oriented businesses. Portfolio proceeds represent the
proceeds from dispositions and the return of principal on Financial Services'
investments. Net cash provided by operating activities includes net income as
adjusted for non-cash items which principally consists of the provisions for
depreciation and amortization, deferred income taxes and provision for possible
losses.
ITEMS AFFECTING CASH FLOW (In Millions):
<TABLE>
<CAPTION>
Cash From Operations
and Portfolio Proceeds 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Net cash provided by
operating activities $ 229.6 $ 211.3 $ 202.4 $ 164.1 $ 174.9
Portfolio proceeds 243.4 155.0 207.0 240.3 183.0
------ ----- ----- ------ ------
Total Consolidated Amounts $ 473.0 $ 366.3 $ 409.4 $ 404.4 $ 357.9
</TABLE>
<TABLE>
<CAPTION>
Net Cash Provided
By Operating Activities 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Railcar Leasing and Management$ 136.5 $ 108.7 $ 114.1 $ 129.0 $ 123.7
Financial Services 33.0 45.8 52.3 1.6 34.5
Terminals and Pipelines 71.2 82.4 64.2 54.7 48.3
Great Lakes Shipping 11.4 17.6 11.7 10.4 12.3
Logistics and Warehousing 4.9 14.5 6.7 (10.7) .7
------ ----- ----- ------ ------
Subtotal 257.0 269.0 249.0 185.0 219.5
Corporate and Other (27.4) (57.7) (46.6) (20.9) (44.6)
------ ----- ----- ------ ------
Total Consolidated Amounts $ 229.6 $ 211.3 $ 202.4 $ 164.1 $ 174.9
</TABLE>
34
<PAGE>
FINANCIAL DATA OF BUSINESS SEGMENTS (Continued)
GATX Corporation and Subsidiaries
<TABLE>
<CAPTION>
Provision For
Depreciation and Amortization 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Railcar Leasing and Management$ 63.9 $ 62.6 $ 62.2 $ 62.5 $ 58.4
Financial Services 29.5 21.1 15.5 8.8 8.0
Terminals and Pipelines 41.0 38.6 35.8 32.7 23.6
Great Lakes Shipping 5.6 5.6 5.6 6.2 6.4
Logistics and Warehousing 10.2 10.1 8.2 4.8 1.0
------ ----- ----- ------ ------
Subtotal 150.2 138.0 127.3 115.0 97.4
Corporate and Other .5 .3 .4 .4 .4
------ ----- ----- ------ ------
Total Consolidated Amounts $ 150.7 $ 138.3 $ 127.7 $ 115.4 $ 97.8
</TABLE>
<TABLE>
<CAPTION>
Capital Additions 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Railcar Leasing and Management$ 195.3 $ 116.6 $ 102.4 $ 96.5 $ 153.5
Financial Services 302.1 178.0 367.9 462.2 331.1
Terminals and Pipelines 77.8 76.2 85.1 204.8 80.1
Great Lakes Shipping .1 .6 2.5 - .3
Logistics and Warehousing 14.1 16.0 53.0 27.5 1.4
------ ----- ----- ------ ------
Subtotal 589.4 387.4 610.9 791.0 566.4
Corporate and Other 7.0 .1 .1 .2 .6
------ ----- ----- ------ ------
Total Consolidated Amounts $ 596.4 $ 387.5 $ 611.0 $ 791.2 $ 567.0
</TABLE>
<TABLE>
<CAPTION>
Interest Expense 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Railcar Leasing and Management$ 69.6 $ 87.3 $ 92.3 $ 96.0 $ 82.9
Financial Services 65.4 71.9 71.4 56.3 53.5
Terminals and Pipelines 39.0 40.3 38.9 34.5 19.5
Great Lakes Shipping 9.2 9.5 9.9 10.2 10.5
Logistics and Warehousing .7 1.7 2.1 1.1 .1
------ ------ ------ ------ ------
Subtotal 183.9 210.7 214.6 198.1 166.5
Corporate and Other 18.4 23.4 24.8 32.6 45.0
Intersegment Amounts (50.5) (58.0) (57.5) (60.5) (52.3)
------ ------ ------ ------ ------
Total Consolidated Amounts $ 151.8 $ 176.1 $ 181.9 $ 170.2 $ 159.2
</TABLE>
<TABLE>
<CAPTION>
Long-Term Debt and Capital
Lease Obligation Maturities 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C>
Railcar Leasing and Management$ 44.6 $ 95.7 $ 55.4 $ 60.6 $ 70.2
Financial Services 76.8 114.3 113.5 91.1 81.7
Terminals and Pipelines 6.9 2.8 2.8 2.6 2.6
Great Lakes Shipping 4.8 5.0 5.6 6.7 5.5
Logistics and Warehousing .5 .4 .4 .4 .2
Total Consolidated Amounts $ 133.6 $ 218.2 $ 177.7 $ 161.4 $ 160.2
</TABLE>
35
<PAGE>
<TABLE>
STATEMENTS OF CONSOLIDATED INCOME AND REINVESTED EARNINGS
GATX Corporation and Subsidiaires
<CAPTION>
GATX Corporation and Subsidiaries
In Millions Except Per Share Data/Year Ended December 31 1993 1992 1991
<S> <C> <C> <C>
GROSS INCOME $1,086.9 $1,019.1 $989.1
COSTS AND EXPENSES
Operating expenses 527.6 493.0 433.3
Interest 151.8 176.1 181.9
Provision for depreciation
and amortization 150.7 138.3 127.7
Provision for possible losses 29.6 82.5 40.6
Selling, general and administrative 122.8 114.3 113.5
------ ------ ------
982.5 1,004.2 897.0
------ ------ ------
INCOME BEFORE INCOME TAXES, EQUITY
IN NET EARNINGS OF AFFILIATED COMPANIES,
AND CUMULATIVE EFFECT OF ACCOUNTING CHANGES 104.4 14.9 92.1
INCOME TAXES - NOTE J 51.4 9.6 33.6
------ ------ ------
INCOME BEFORE EQUITY IN NET
EARNINGS OF AFFILIATED COMPANIES AND
CUMULATIVE EFFECT OF ACCOUNTING CHANGES 53.0 5.3 58.5
EQUITY IN NET EARNINGS
OF AFFILIATED COMPANIES - NOTES D AND E 19.7 24.0 24.2
------ ------ ------
INCOME BEFORE CUMULATIVE
EFFECT OF ACCOUNTING CHANGES 72.7 29.3 82.7
CUMULATIVE EFFECT OF
ACCOUNTING CHANGES - NOTES I AND J - (45.8) -
NET INCOME (LOSS) 72.7 (16.5) 82.7
Reinvested earnings at beginning of year 273.1 328.2 282.0
Dividends declared on
Common and Preferred Stock (40.7) (38.6) (36.5)
------ ------ ------
REINVESTED EARNINGS AT END OF YEAR $ 305.1 $ 273.1 $ 328.2
====== ====== ======
PER SHARE DATA - NOTE A
Income before cumulative
effect of accounting changes $ 2.99 $ .82 $ 3.56
Cumulative effect of accounting changes - (2.35) -
------ ------ ------
Net Income (Loss) $ 2.99 $ (1.53) $ 3.56
Net income (loss), assuming full dilution $ 2.99 $ (1.53) $ 3.51
Dividends declared per common share 1.40 1.30 1.20
Dividends declared per $2.50 Cumulative
Preferred share 2.50 2.50 2.50
Dividends declared per $3.875
Cumulative Preferred share 3.875 3.875 3.875
Average number of common shares and,
in 1991, common share equivalents 19,894,000 19,441,000 19,506,000
</TABLE>
See Notes to Consolidated Financial Statements.
36
<PAGE>
MANAGEMENT DISCUSSION & ANALYSIS OF INCOME
GATX Corporation and Subsidiaries
GROSS INCOME of $1.1 billion exceeded the prior year by $68 million, or 7%. The
increase was generated by increased railcar and terminal rental income and
logistics revenue. Further, portfolio disposition gains increased $22 million
and included a $17 million gain from an insurance settlement.
OPERATING EXPENSES of $528 million increased $35 million due to higher railcar
repair costs, and information systems expenses and the costs of servicing new
customers at Logistics. In addition, operating lease expenses increased due to
the increased level of operating lease assets. Transportation continues to
utilize sale leasebacks to finance its railcar additions. The leaseback is
recorded as an operating lease which removes the asset and related liability
from the balance sheet; the payments under the operating leases are recorded as
operating lease expense.
INTEREST EXPENSE decreased $24 million due to lower interest rates, the full-
year effect of the 1992 refinancings at lower rates, and the effect of interest
rate swaps. A portion of the decrease in interest expense is offset by the
increase in the operating lease rent component of operating expenses as a result
of the sale leasebacks.
During 1993, GATX implemented the findings of an asset liability management
study at Transportation which affirmed the correlation between certain railcar
lease rates and interest rates. As a result, interest rate swaps were entered
into to better match the maturity of the debt portfolio to the terms of the
railcar leases. This program will be managed on an ongoing basis.
DEPRECIATION AND AMORTIZATION EXPENSE increased $12 million from last year due
to capital additions and increased aircraft depreciation.
THE PROVISION FOR POSSIBLE LOSSES of $30 million, which is almost entirely
attributable to Financial Services, is $53 million less than the prior year's
provision. In 1992, a $60 million special provision to the loss reserve was
recorded, reflecting the continued deterioration in the freighter aircraft and
real estate portfolios. The current year provision reflects continuing concern
relating to values of certain aircraft types.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES increased $9 million primarily due
to increased compensation costs, increased employee relocations and consulting
expenses at Terminals, and legal costs at Corporate.
INCOME TAX EXPENSE of $51 million was $42 million higher than 1992 expense
principally due to the increased level of income. The 1993 federal tax rate
increase from 34% to 35% added a $7 million charge for the cumulative increase
in deferred income taxes and a $1 million charge for the current year's taxes.
The 1993 effective tax rate of 49% exceeded the statutory rate primarily as the
result of the increase in deferred taxes due to the increased tax rate. State
taxes, foreign income and nondeductible items also increased the effective tax
rate. The 1992 effective tax rate of 65% was distorted due to the effect of a
$4 million additional tax provision associated with the liquidation of a foreign
finance subsidiary.
EQUITY IN NET EARNINGS OF AFFILIATED COMPANIES was $4 million lower than in
1992. Terminals' equity earnings decreased reflecting the weak economies in
Europe and Japan, partially offset by favorable results at the Singapore
affiliates due to expansion and demand for services. Financial Services' equity
earnings decreased primarily due to reduced residual values at a technology
joint venture and the inclusion in 1992 earnings of a gain from the sale of a
real estate joint venture.
THE CUMULATIVE EFFECT OF ACCOUNTING CHANGES caused a $46 million reduction in
1992 net income. This adjustment resulted from the recording of a one-time non-
cash net accounting charge for postretirement benefits and deferred taxes. SFAS
No. 106, Employers' Accounting for Postretirement Benefits Other Than Pensions,
requires that certain postretirement benefits, principally health care and life
insurance, be recognized in the financial statements on an accrual basis rather
than on a pay-as-you-go basis. GATX recorded a one-time charge of $56 million
for the transition obligation related to the implementation of this Standard.
The principal change resulting from SFAS No. 109, Accounting for Income Taxes,
is the recording of deferred taxes at amounts ultimately considered payable
which resulted in a $10 million favorable reduction of the deferred tax
liability.
CONSOLIDATED NET INCOME of $73 million in 1993 compared to a net loss of $17
million in 1992 is in part due to improved operating performance in 1993. The
1992 loss was principally the result of the $46 million net charge for the
cumulative effect of accounting changes and the $37 million aftertax special
provision to the loss reserve.
37
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
GATX Corporation and Subsidiaries
<CAPTION>
GATX Corporation and Subsidiaries
In Millions/December 31 1993 1992
ASSETS
<S> <C> <C>
CASH AND CASH EQUIVALENTS $ 26.2 $ 22.9
RECEIVABLES
Trade accounts 88.0 76.4
Finance leases - Note B 537.0 537.7
Secured loans - Note C 226.1 246.0
Less - Allowance for possible losses (96.0) (110.9)
------ ------
755.1 749.2
PROPERTY, PLANT AND EQUIPMENT - NOTES B AND G
Railcars and support facilities 1,735.8 1,706.9
Tank storage terminals and pipelines 1,014.8 949.6
Great Lakes vessels 203.4 203.3
Operating lease investments and other 351.1 357.9
------ ------
3,305.1 3,217.7
Less - Allowances for depreciation (1,342.8) (1,253.4)
------ ------
1,962.3 1,964.3
INVESTMENTS IN AFFILIATED COMPANIES - NOTE D 329.1 306.0
OTHER ASSETS 319.4 383.9
------ ------
$3,392.1 $3,426.3
====== ======
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES, DEFERRED ITEMS AND SHAREHOLDERS' EQUITY
<S> <C> <C>
ACCOUNTS PAYABLE $ 190.6 $ 150.5
ACCRUED EXPENSES 53.0 60.3
DEBT - NOTES B, F AND G
Short-term debt 226.1 331.4
Long-term debt 1,446.5 1,436.6
Capital lease obligations 267.3 288.0
------ ------
1,939.9 2,056.0
DEFERRED INCOME TAXES - NOTE J 248.2 234.1
OTHER DEFERRED ITEMS 370.5 367.8
------ ------
TOTAL LIABILITIES AND DEFERRED ITEMS 2,802.2 2,868.7
SHAREHOLDERS' EQUITY - NOTES F, G, K AND L
Preferred Stock 3.4 3.4
Common Stock 14.1 13.9
Additional capital 312.4 306.9
Reinvested earnings 305.1 273.1
Cumulative foreign currency
translation adjustment 2.0 7.4
------ ------
637.0 604.7
Less - Cost of common shares in treasury (47.1) (47.1)
------ ------
TOTAL SHAREHOLDERS' EQUITY 589.9 557.6
------ ------
$3,392.1 $3,426.3
====== ======
</TABLE>
See Notes to Consolidated Financial Statements.
38
<PAGE>
MANAGEMENT DISCUSSION & ANALYSIS OF BALANCE SHEETS
GATX Corporation and Subsidiaries
TOTAL ASSETS of $3.4 billion decreased slightly from 1992 as the increased level
of capital additions was more than offset by the runoff of the portfolio,
including the high level of asset dispositions during the year, and the sale
leaseback of railcars.
TOTAL RECEIVABLES increased $6 million from the prior year end. Trade
receivables increased due to the higher level of revenues. Finance leases
decreased slightly as the normal runoff of the portfolio offset the current year
lease additions. The secured loan balance decreased $20 million as the proceeds
received on the loan portfolio exceeded new volume. The allowance for possible
losses decreased $15 million from the prior year end. Financial Services
provided a $29 million addition to the loss reserve in 1993, which was offset by
$42 million of writedowns, net of recoveries, primarily on aircraft and real
estate. The allowance for losses remained largely unchanged at the other
subsidiaries.
PROPERTY, PLANT AND EQUIPMENT increased $87 million. Transportation invested
$171 million in new and used railcars and $24 million to upgrade its repair
shops, which was partially offset by the sale and leaseback of $138 million of
railcar additions. Additionally, a $91 million railcar operating lease
portfolio acquisition at Financial Services was financed by a sale leaseback.
As these leasebacks qualified as operating leases, the assets were removed from
the balance sheet. Terminals invested $78 million for tank construction and
other modifications and improvements.
INVESTMENTS IN AFFILIATED COMPANIES increased $23 million. New investments of
$43 million, primarily in aircraft and technology joint ventures at Financial
Services, plus equity income totaling $20 million were partially offset by $28
million of cash distributions received and $12 million of unrealized translation
losses and write-downs.
OTHER ASSETS decreased $64 million to $319 million. Assets held for sale or
lease at Financial Services decreased $62 million to a balance of $57 million
primarily due to the sale of certain real estate properties and the write-down
of other real estate and aircraft assets.
ACCOUNTS PAYABLE increased $40 million due to the accruals related to delayed
payment terms on a railcar purchase plus an increase in trade payables at year
end.
TOTAL DEBT decreased $116 million primarily due to the sale leasebacks at
Transportation and Financial Services and the high level of cash generated from
operations and portfolio proceeds during the year. Proceeds from the sale
leasebacks were used to repay short-term debt and fund investment activities.
DEFERRED INCOME TAXES increased $14 million primarily due to the increase in the
federal tax rate from 34% to 35%.
CONSOLIDATED EQUITY increased $32 million, reflecting net income of $73 million
and payment of $41 million of common and preferred dividends. The balance of
the change is attributable to foreign currency translation adjustments and
proceeds from stock option exercises.
39
<PAGE>
<TABLE>
STATEMENTS OF CONSOLIDATED CASH FLOWS
GATX Corporation and Subsidiaries
<CAPTION>
GATX CORPORATION AND SUBSIDIARIES
In Millions/Year Ended December 31 1993 1992 1991
OPERATING ACTIVITIES
<S> <C> <C> <C>
Net income (loss) $ 72.7 $ (16.5) $ 82.7
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Realized gain on disposition of leased equipment (45.7) (21.8) (52.7)
Provision for depreciation and amortization 150.7 138.3 127.7
Provision for possible losses 29.6 82.5 40.6
Deferred income taxes (credit) 11.7 (24.4) (15.8)
Cumulative effect of accounting changes - 45.8 -
Net change in trade receivables, inventories,
accounts payable and accrued expenses 15.9 .6 17.8
Other (5.3) 6.8 2.1
Net cash provided by operating activities 229.6 211.3 202.4
INVESTING ACTIVITIES
Additions to property, plant and equipment (292.9) (210.7) (244.5)
Additions to equipment on lease, net of
non-recourse financing (216.0) (80.1) (215.6)
Secured loans extended (39.4) (40.2) (79.5)
Investments in affiliated companies (43.3) (54.6) (71.4)
Progress payments (4.8) (1.9) -
Capital additions (596.4) (387.5) (611.0)
Portfolio proceeds:
From disposition of leased equipment 102.2 52.5 89.1
From return of investment 141.2 102.5 117.9
Total portfolio proceeds 243.4 155.0 207.0
Proceeds from other asset dispositions 243.4 112.0 91.3
Net cash used in investing activities (109.6) (120.5) (312.7)
FINANCING ACTIVITIES
Proceeds from issuance of long-term debt 199.3 225.2 188.7
Repayment of long-term debt (160.1) (279.7) (98.0)
Net (decrease) increase in short-term debt (105.3) 9.7 12.4
Repayment of capital lease obligations (14.6) (10.8) (10.5)
Issuance of Common Stock under employee benefit programs4.7 1.2 3.3
Cash dividends (40.7) (38.6) (36.5)
Net cash (used in) provided by financing activities(116.7) (93.0) 59.4
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS $ 3.3 $ (2.2) $ (50.9)
</TABLE>
See Notes to Consolidated Financial Statements.
40
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS OF CASH FLOW
GATX Corporation and Subsidiaries
GATX generates significant cash from its operations and proceeds from its
investment portfolio. Most of its capital requirements represent additions to
its railcar fleet, its capital equipment investment portfolio, and its joint
ventures and are considered discretionary capital expenditures. As a result,
the level of capital spending can be rapidly adjusted as conditions in the
economy or GATX's businesses warrant.
CASH PROVIDED BY OPERATING ACTIVITIES generated $230 million of cash flow in
1993, an $18 million increase from 1992. Net income adjusted for non-cash items
provided $219 million of cash in 1993, up $15 million from last year. The $24
million increase in realized gains on disposition of leased equipment
effectively decreased cash from operating activities as the full amount of the
proceeds was included under investing activities as portfolio proceeds. Working
capital and other generated $3 million more cash than last year.
CASH USED IN INVESTING ACTIVITIES decreased $11 million from the prior year.
Capital additions totaled $596 million, an increase of $209 million from 1992.
Transportation invested $171 million in the railcar fleet versus $108 million
last year, and expended $24 million on its multi-year program to significantly
upgrade its repair facilities. Additions at Financial Services of $302 million,
a $124 million increase from last year, included an acquired portfolio of rail
assets. Terminals expended $78 million in 1993, similar to the prior year, for
tank construction and other modifications and improvements. Logistics' spending
of $14 million for additions was down $2 million from last year. Capital
additions of $7 million at Corporate related to the relocation of the Chicago
operations to a new office building in downtown Chicago.
Proceeds of $243 million were generated from the portfolio compared to $155
million in 1992. Proceeds from asset dispositions of $102 million increased $50
million primarily due to the sale of rail equipment and the proceeds received
from an insurance settlement for a marine equipment casualty. Proceeds from
return of portfolio investment increased primarily due to the sale of real
estate assets and the recovery of lease and loan principal, partially offset by
a decrease in cash generated from joint ventures; the prior year included a $17
million distribution from the sale of a real estate investment and higher
distributions from technology joint ventures.
Proceeds from other asset dispositions of $243 million increased $131 million
from 1992. In 1993, net proceeds of $229 million were received from the sale
leaseback of railcars at Transportation and the sale leaseback of a rail
equipment portfolio acquired by Financial Services. Net proceeds of $112
million in 1992 included the proceeds received from the sale leaseback of
railcars at Transportation and the proceeds received from the sale of four
warehouses at Logistics. GATX has used sale leasebacks as a cost effective
method of financing assets given GATX's alternative minimum tax position.
CASH USED IN FINANCING ACTIVITIES was $117 million compared to $93 million in
1992. GATX finances its capital additions through cash generated from
operations and portfolio proceeds supplemented by debt financings and sale
leasebacks. During the year, $199 million of long-term debt was issued and $175
million of long-term obligations were repaid. Short-term debt decreased by $105
million to a balance of $226 million.
Cash dividends increased $2 million in 1993 due to a common stock dividend
increase from $1.30 per share in 1992 to $1.40 in 1993. This was the eighth
consecutive year GATX increased its dividend.
LIQUIDITY AND CAPITAL RESOURCES. GATC, GATX Capital, GATX Terminals and GATX
Logistics have revolving credit facilities. GATC and GATX Capital also have
commercial paper programs and uncommitted money market lines which are used to
fund operating needs. In late 1992, both GATC and GATX Capital signed new
credit facilities. GATC's facility is a four-year agreement while GATX
Capital's facility is a three-year revolver. Under the covenants of the
commercial paper programs and rating agency guidelines, GATC and GATX Capital
individually must keep unused revolver capacity at least equal to the amount of
commercial paper and money market lines outstanding. At December 31, 1993, GATX
and its subsidiaries had available unused committed lines of credit amounting to
$381 million.
41
<PAGE>
MANAGEMENT DISCUSSION AND ANALYSIS OF CASH FLOW
GATX Corporation and Subsidiaries
In February 1994, GATC filed a $650 million shelf registration for pass through
trust certificates and debt securities, none of which has been issued. GATX
Capital has a $300 million shelf registration for medium-term notes, none of
which has been issued. At year end, GATX has $339 million of commitments to
provide financing to customers or to acquire assets, $265 million of which is
scheduled to fund in 1994.
At December 31, 1993, approximately $567 million of net assets of subsidiaries
have certain restrictions which limit the ability to transfer assets to GATX
parent in the form of loans, advances or dividends. The majority of the
restricted net assets relate to the revolving credit agreement of GATC and the
various loan agreements of GATX Capital and GATX Logistics. Such restrictions
are not expected to have an adverse impact on the ability of GATX to meet its
cash obligations.
Environmental Matters
Certain of GATX's operations present potential environmental risks principally
through the transportation or storage of various commodities. Recognizing that
some risk to the environment is intrinsic to its operations, GATX is committed
to protecting the environment, as well as complying with applicable
environmental protection laws and regulations. GATX, as well as its
competitors, is subject to extensive regulation under federal, state and local
environmental laws which have the effect of increasing the costs and liabilities
associated with the conduct of its operations. In addition, GATX's foreign
operations are subject to environmental regulations in effect in each respective
jurisdiction.
GATX's policy is to monitor and actively address environmental concerns in a
responsible manner. GATX has received notices from the U.S. Environmental
Protection Agency (EPA) that it is a potentially responsible party (PRP) for
study and clean-up costs at 11 sites under the requirements of the Federal
Comprehensive Environmental Response, Compensation and Liability Act of 1980
(Superfund). Under Superfund and comparable state laws, GATX may be required to
share in the cost to clean-up various contaminated sites identified by the EPA
and other agencies. In all but one instance, GATX is one of several financially
responsible PRPs and has been identified as contributing only a small percentage
of the contamination at each of the sites. Due to various factors such as the
required level of remediation and participation in clean-up efforts by others,
GATX's total clean-up costs at these sites cannot be predicted with certainty;
however, GATX's best estimates for remediation and restoration of these sites
have been determined and are included in its environmental reserves.
Future costs of environmental compliance are indeterminable due to unknowns such
as the magnitude of possible contamination, the timing and extent of the
corrective actions that may be required, the determination of the company's
liability in proportion to other responsible parties, and the extent to which
such costs are recoverable from third parties including insurers. Also, GATX
may incur additional costs relating to facilities and sites where past
operations followed practices and procedures that were considered acceptable at
the time but in the future may require investigation and/or remedial work to
ensure adequate protection to the environment under current standards. If
future laws and regulations contain more stringent requirements than presently
anticipated, expenditures may be higher than the estimates, forecasts, and
assessments of potential environmental costs provided below. However, these
costs are expected to be at least equal to the current level of expenditures.
In addition, GATX has provided indemnities for environmental issues to the
buyers of two divested companies for which GATX believes it has adequate
reserves.
GATX's environmental reserve at the end of 1993 was $81 million and reflects
GATX's best estimate of the cost to remediate its environmental conditions.
Additions to the reserve were $17 million in both 1993 and 1992. Expenditures
charged to the reserve amounted to $10 million and $12 million in 1993 and 1992,
respectively.
In 1993, GATX made capital expenditures of $18 million for environmental and
regulatory compliance compared to $16 million in 1992. These projects included
marine vapor recovery, discharge prevention compliance, impervious dikes and
tank car cleaning systems. Environmental projects authorized or currently under
consideration would require capital expenditures of approximately $25 million in
1994. It is anticipated that GATX will make annual expenditures at a similar
level over the next five years for regulatory and environmental requirements.
42
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
GATX Corporation and Subsidiaries
Financial data of business segments for 1993, 1992, and 1991 on pages 34 through
37 are an integral part of the consolidated financial statements of GATX
Corporation and subsidiaries.
Note A - Significant Accounting Policies
Significant accounting policies of GATX and its consolidated subsidiaries are
discussed below.
Consolidation
The consolidated financial statements include the accounts of GATX and its
majority-owned subsidiaries. Investments in 20 to 50 percent-owned companies
and joint ventures are accounted for under the equity method and are shown as
investments in affiliated companies. Less than 20 percent-owned affiliated
companies are recorded using the cost method.
Cash Equivalents
GATX considers all highly liquid investments with a maturity of three months or
less when purchased to be cash equivalents. The carrying amounts reported in
the balance sheet for cash and cash equivalents approximate the fair value of
those assets.
Property, Plant and Equipment
Property, plant and equipment are stated principally at cost. Assets acquired
under capital leases are included in property, plant and equipment and the
related obligations are recorded as liabilities. Provisions for depreciation
include the amortization of the cost of capital leases and are computed by the
straight-line method which results in equal annual depreciation charges over the
estimated useful lives of the assets.
Goodwill
GATX has classified as goodwill the cost in excess of the fair value of net
assets acquired. Goodwill, which is included in other assets, is being
amortized on a straight-line basis over 40 years. Goodwill, net of accumulated
amortization of $18.2 million and $14.1 million, was $136.6 million and $139.7
million as of December 31, 1993 and 1992, respectively. Amortization expense
was $4.1 million, $4.1 million, and $3.7 million for 1993, 1992 and 1991,
respectively.
Income Taxes
In February 1992, Statement of Financial Accounting Standards No. 109,
Accounting for Income Taxes, was issued by the Financial Accounting Standards
Board (FASB) which, among other things, requires that recognition of deferred
income taxes be measured by the provisions of enacted tax laws in effect at the
date of the financial statements. This Statement was adopted by GATX in the
first quarter of 1992. The cumulative effect of the adoption of this Statement
was to reduce the deferred tax liability by $9.7 million. This amount was added
to net income and thereby to shareholders' equity.
United States income taxes have not been provided on the undistributed earnings
of foreign subsidiaries and affiliates which GATX intends to permanently
reinvest in these foreign operations. The cumulative amount of such earnings
was $102.9 million at December 31, 1993.
GATX participates in a Capital Construction Fund agreement with the United
States Maritime Administration. Contributions to the Fund reduce taxable income
and the tax basis of the related vessels. Deferred taxes are not required to be
provided for such contributions and, consequently, income taxes in future years
will increase if not offset by additional deposits. Based on current statutory
rates, such income tax liability would be $4.9 million.
Other Deferred Items
Other deferred items include the accrual for postretirement benefits other than
pensions in addition to environmental, general liability and workers'
compensation reserves, and other deferred credits.
Environmental Liabilities
Expenditures that relate to current or future operations are expensed or
capitalized as appropriate. Expenditures that relate to an existing condition
caused by past operations and do not contribute to current or future revenue
generation are charged to environmental reserves. Reserves are recorded in
accordance with accounting guidelines to cover work at identified sites when
GATX's liability for environmental clean-up is both probable and a minimum
estimate of associated costs can be made; adjustments to initial estimates are
recorded as necessary.
43
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
GATX Corporation and Subsidiaries
Off-Balance-Sheet Financial Instruments
Fair values of GATX's off-balance-sheet financial instruments (futures, swaps,
forwards, options, guarantees, and lending and purchase commitments) are based
on current market prices, settlement values or fees currently charged to enter
into similar agreements.
Revenue Recognition
The majority of GATX's gross income is derived from the rentals of railcars,
terminals, Great Lakes vessels, and warehousing and logistics services. In
addition, income is derived from finance leases, asset dispositions, secured
loans and other services.
Foreign Currency Translation
The assets and liabilities of GATX operations located outside the United States
are translated at exchange rates in effect at year end, and income statements
are translated at the average exchange rates for the year. Gains or losses
resulting from the translation of foreign currency financial statements are
deferred and recorded as a separate component of consolidated shareholders'
equity. Incremental unrealized translation gains (losses) recorded in the
cumulative foreign currency adjustment account were $(5.4) million, $(3.4)
million, and $4.5 million, during 1993, 1992 and 1991, respectively.
Earnings Per Share
Earnings per share are based on the weighted average number of common shares
and, in 1991, common share equivalents outstanding. Net income is adjusted for
the preferred stock dividends. The common share equivalents represent the
dilutive shares issuable upon exercise of employee stock options.
Reclassifications
Certain amounts in the 1992 and 1991 financial statements have been reclassified
to conform to the 1993 presentation.
Note B - Accounting for Leases
The following information pertains to GATX as a lessor:
<TABLE>
Finance Leases - The components of the investment in finance leases are (in
millions):
<CAPTION>
December 31
1993 1992
<S> <C> <C>
Minimum future lease receivables $ 601.1 $ 621.5
Estimated residual values 260.0 276.7
------ ------
861.1 898.2
Less - Unearned income (324.1) (360.5)
------ ------
Investment in finance leases $ 537.0 $ 537.7
</TABLE>
Operating Leases - The majority of railcar and tankage assets and certain other
equipment leases included in property, plant and equipment are accounted for as
operating leases.
<TABLE>
Minimum Future Receipts - Minimum future lease receipts from finance leases and
minimum future rental receipts from noncancellable operating leases by year at
December 31, 1993 are (in millions):
<CAPTION>
Finance Leases Operating Leases Total
<S> <C> <C> <C>
1994 $ 85.6 $ 432.7 $ 518.3
1995 89.1 282.3 371.4
1996 79.2 207.2 286.4
1997 54.6 152.9 207.5
1998 45.1 104.1 149.2
Years thereafter 247.5 341.5 589.0
Total $601.1 $1,520.7 $2,121.8
</TABLE>
44
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
GATX Corporation and Subsidiaries
The following information pertains to GATX as a lessee:
<TABLE>
Capital Leases - Assets classified as property, plant and equipment and finance
leases which have been financed under capital leases are (in millions):
<CAPTION>
December 31
1993 1992
<S> <C> <C>
Railcars $ 153.2 $ 159.9
Great Lakes vessels 159.5 159.5
------ ------
312.7 319.4
Less - Allowances for depreciation (130.1) (122.5)
------ ------
182.6 196.9
Finance leases 23.6 32.1
------ ------
$ 206.2 $ 229.0
</TABLE>
Operating Leases - GATX has financed railcars and warehouses through sale
leasebacks which are accounted for as operating leases. In addition, GATX
leases certain other assets and office facilities. Total rental expense for the
years ended December 31, 1993, 1992 and 1991 was $94.1 million, $76.5 million,
and $60.7 million, respectively.
<TABLE>
Minimum Future Rental Payments - Future minimum rental payments due under
noncancellable leases at December 31, 1993 are (in millions):
<CAPTION>
Capital Leases Operating Leases
<S> <C> <C>
1994 $ 34.0 $ 87.7
1995 35.4 87.5
1996 34.9 80.2
1997 33.9 76.9
1998 32.9 74.2
Years thereafter 313.9 765.7
----- ------
485.0 $1,172.2
Less - Amounts representing interest (217.7)
-----
Present value of future
minimum capital lease payments $267.3
</TABLE>
The above capital lease amounts and certain operating leases do not include the
costs of licenses, taxes, insurance, and maintenance which GATX is required to
pay. Interest expense on the above capital leases was $23.6 million in 1993,
$24.8 million in 1992, and $25.8 million in 1991.
Note C - Secured Loans
Investments in secured loans are stated at the principal amount outstanding plus
accrued interest. The loans are collateralized by equipment, golf courses or
real estate. At December 31, 1993, $15.5 million of GATX's $226.1 million loan
portfolio were on nonaccrual status. GATX does not believe an estimate of the
fair value of these loans on nonaccrual can be made at this time without
incurring excessive cost inasmuch as active markets for these loans do not
currently exist. GATX's estimate of potential impairment due to collectibility
concerns related to these loans is included in the allowance for possible
losses.
The fair value estimate of the $210.6 million remaining loan portfolio is
estimated to be $212.8 million. For variable rate loans totaling $108.1
million, fair value is based on carrying amounts. The fair value of the $102.5
million of fixed rate loans is estimated using discounted cash flow analyses,
using interest rates currently offered for loans with similar terms to borrowers
of similar credit quality.
45
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
GATX Corporation and Subsidiaries
Note D - Investments in Affiliated Companies
GATX has investments in 20 to 50 percent-owned companies and joint ventures
which are accounted for using the equity method. These investments include a
Canadian railcar company, foreign tank storage terminals, and aircraft, high
technology and real estate joint ventures. Distributions received from such
affiliates were $27.7 million, $55.7 million, and $25.7 million, in 1993, 1992
and 1991, respectively.
<TABLE>
Summarized operating results for all affiliated companies in their entirety are
(in millions):
<CAPTION>
For the year 1993 1992 1991
<S> <C> <C> <C>
Revenues $ 400.9 $ 453.4 $ 412.6
Net income 42.9 53.7 46.6
</TABLE>
<TABLE>
Summarized balance sheet data for all affiliated companies in their entirety are
(in millions):
<CAPTION>
December 31 1993 1992
<S> <C> <C>
Total assets $1,784.6 $1,621.1
Long-term liabilities 664.9 578.1
Other liabilities 228.9 235.1
------ ------
Shareholders' equity $ 890.8 $ 807.9
====== ======
</TABLE>
Note E - Foreign Operations
Foreign operations were not material to the consolidated gross income or pretax
income of GATX Corporation for any of the years presented. However, GATX does
have a number of investments in affiliated companies which are located in, or
derived income from, foreign countries which contribute significantly to equity
in net earnings of affiliated companies. The foreign identifiable assets are
primarily investments in affiliated companies and a United Kingdom terminalling
operation which is fully consolidated.
<TABLE>
<CAPTION>
Equity in Net Earnings of
Affiliated Companies (in Millions) 1993 1992 1991
<S> <C> <C> <C>
Foreign $ 18.1 $ 18.8 $ 17.9
United States 1.6 5.2 6.3
$ 19.7 $ 24.0 $ 24.2
</TABLE>
<TABLE>
<CAPTION>
Identifiable Assets (in Millions) 1993 1992 1991
<S> <C> <C> <C>
Foreign $ 419.4 $ 382.7 $ 380.1
United States 2,972.7 3,043.6 3,134.1
$3,392.1 $3,426.3 $3,514.2
</TABLE>
46
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
GATX Corporation and Subsidiaries
Note F - Short-Term Debt and Lines of Credit
<TABLE>
Short-term debt consisted of (in millions):
<CAPTION>
December 31
1993 1992
<S> <C> <C>
Commercial paper $129.7 $189.8
Other short-term borrowings 96.4 141.6
------ ------
$226.1 $331.4
</TABLE>
Under a revolving credit agreement with a group of banks, General American
Transportation Corporation (GATC) may borrow up to $200.0 million. The
revolving credit agreement contains various restrictive covenants which include,
among other things, minimum net worth, restrictions on additional indebtedness,
and requirements to maintain certain financial ratios for GATC. Under the
agreement GATC was required to maintain a minimum net worth of $528.2 million at
December 31, 1993. While at year end no borrowings were outstanding under the
agreement, the available line of credit was reduced by $25.5 million of
commercial paper outstanding. GATC had borrowings of $55.0 million under
unsecured money market lines. Also, GATX Terminals has a revolving credit
agreement of pound sterling 25.0 million of which pounds9.0 million was
available at year end.
GATX Capital has commitments under its credit agreements with a group of banks
for revolving credit loans totaling $290.0 million of which $185.3 million was
available at December 31, 1993. The amount available was reduced by outstanding
commercial paper and bankers' acceptances. The credit agreement contains
various covenants which include, among other things, minimum net worth,
restrictions on dividends, and requirements to maintain certain financial ratios
for GATX Capital. At December 31, 1993, such covenants limited GATX Capital's
ability to transfer net assets to GATX to no more than $82.9 million.
The carrying amounts reported in the balance sheet for short-term debt at
December 31, 1993 approximate fair value.
Interest expense on short-term debt was $10.9 million in 1993, $13.2 million in
1992, and $18.5 million in 1991.
47
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
GATX Corporation and Subsidiaries
Note G - Long-Term Debt
<TABLE>
Long-term debt consisted of (in millions):
<CAPTION>
Final December 31
Interest Rates Maturity 1993 1992
<S> <C> <C> <C> <C>
Variable rate:
Term notes 3.775% - 7.00% 1994-1995 $ 54.0 $ 88.8
Non-recourse obligations 4.625 - 7.50 2000-2002 60.5 55.1
114.5 143.9
Fixed rate:
Term notes 5.16% - 13.48 % 1994-2012 1,230.9 1,152.0
Non-recourse obligations 9.00 - 9.25 1994-1996 7.6 45.7
Industrial revenue bonds 6.65 - 10.875 1994-2023 88.9 89.4
Title XI Bonds 7.1 1998 4.6 5.6
1,332.0 1,292.7
$1,446.5 $1,436.6
</TABLE>
The carrying amount of the variable rate debt at December 31, 1993 approximates
its fair value. The fair value of the fixed rate debt was $1,481.6 million and
$1,393.9 million at December 31, 1993 and 1992, respectively. Fair value was
estimated by aggregating the notes and performing a discounted cash flow
calculation using a weighted average note term and market rate based on GATX's
current incremental borrowing rates for similar types of borrowing arrangements.
Maturities of GATX's long-term debt as of December 31, 1993 for each of the
years 1994 through 1998 (assuming that GATX Capital's commercial paper, notes
payable and bankers' acceptances are retired by the unused revolving commitments
and notice of termination of all of GATX Capital's revolving credit loans had
been received by December 31, 1993) are (in millions):
<TABLE>
<CAPTION>
Converted Revolving
Credit Loans Long-Term Debt Total
<S> <C> <C> <C>
1994 - $121.9 $121.9
1995 - 204.0 204.0
1996 121.9 162.9 284.8
1997 - 146.2 146.2
1998 - 144.8 144.8
</TABLE>
At December 31, 1993, certain vessels and warehouse equipment with a net
carrying value of $17.8 million were pledged as collateral for $21.7 million of
notes and bonds.
Interest cost incurred on long-term debt, net of capitalized interest, was
$117.3 million in 1993, $138.1 million in 1992, and $137.6 million in 1991.
Interest cost capitalized as part of the cost of construction of major assets
was $2.7 million in 1993, $4.2 million in 1992, and $5.4 million in 1991. A
loss of $.5 million and $3.3 million was recorded on the early retirement of
debt in 1993 and 1992, respectively.
In 1990, GATX entered into a currency swap agreement to finance the purchase of
a United Kingdom terminalling operation. GATX swapped a U.S. dollar borrowing
of $59.7 million with interest stated at 10.125% for a liability of pound
sterling 37.0 million with associated interest at 12.87%. The exchange of
interest and principal payments over the 12 year term of the notes was fixed
accordingly. The swap was terminated in 1993, resulting in a net cash payment
to GATX of $2.3 million; at the same time, an offsetting translation loss was
recognized for the unrealized loss on the translation of pounds into dollars.
48
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
GATX Corporation and Subsidiaries
GATX uses interest rate swaps, caps, forwards and other similar contracts to set
interest rates on existing or anticipated transactions. At December 31, 1993,
GATC has used $900 million of interest rate swaps to better match the duration
of the debt portfolio to the lease terms of the railcar assets. GATX Capital
uses interest rate swaps in addition to commercial paper and floating rate
medium term notes to match fund its floating rate lease and loan investments.
At December 31, 1993, GATX Capital had entered into $180 million of interest
rate swaps to convert fixed rate debt to floating rate debt. Net amounts paid
or received on these contracts that qualify as hedges are recognized over the
term of the contract as an adjustment to interest expense of the hedged
financial instrument. The total of these instruments in place at year end was
$1,080 million; the fair values of the swap components at year end would result
in a net payment to GATX of $10.9 million if the swaps were terminated. These
financial instruments terminate in 1994-2006. GATX manages the credit risk of
counterparties by only dealing with institutions that the company considers
financially sound and by avoiding concentrations of risk with a single
counterparty.
At December 31, 1993, certain debt agreements of subsidiaries restrict the
ability of the subsidiaries to transfer net assets to the parent company in the
form of loans, advances or dividends. Such restrictions affect $567.4 million
of the $1,102.7 million of total subsidiary net assets. The majority of these
restrictions relate to the revolving credit agreement of GATC and certain loan
agreements of GATX Capital and GATX Logistics.
Note H - Pension Benefits
GATX and its subsidiaries, exclusive of GATX Logistics, maintain several
noncontributory defined benefit pension plans covering substantially all
employees. Logistics' employees participate in a 401(k) retirement plan.
Benefits payable under the pension plans are based on years of service and/or
final average salary. The funding policy for all plans is based on an
actuarially determined cost method allowable under Internal Revenue Service
regulations.
The net periodic pension cost for the GATX defined benefit plans was determined
based on the funds' status at the beginning of the year. Significant
assumptions used in determining pension cost for 1991 through 1993 were:
<TABLE>
<CAPTION>
1993 1992-1991
<S> <C> <C>
Discount rate 8.5% 9.0%
Expected long-term rate of return on assets 9.0% 9.0%
Rate of increase in compensation levels 6.0% 6.0%
</TABLE>
<TABLE>
The components of net periodic pension cost were (in millions):
<CAPTION>
For the year 1993 1992 1991
<S> <C> <C> <C>
Service cost of benefits earned during the period $ 5.0 $ 4.3 $ 4.1
Interest cost on projected benefit obligation 19.2 18.8 18.8
Actual return on plan assets (26.4) (12.4) (44.4)
Net amortization and deferral 7.2 (6.0) 25.6
---- ---- ----
Net periodic pension cost $ 5.0 $ 4.7 $ 4.1
====== ====== ======
</TABLE>
49
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
GATX Corporation and Subsidiaries
The projected benefit obligation was determined based on the funded status at
year end. Significant assumptions used in determining the projected benefit
obligations were:
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
Discount rate 7.75% 8.5% 9.0%
Rate of increase in compensation levels 5.5% 6.0% 6.0%
</TABLE>
The effect of the change in assumptions on the unrecognized net gain was a
decrease of $12.4 million for 1993 and $9.2 million for 1992 resulting in an
unrecognized net loss position at the end of 1993. The funded status of the
defined benefit plans and the amounts recognized in GATX's consolidated balance
sheet were (in millions):
<TABLE>
<CAPTION>
December 31, 1993 1992
<S> <C> <C>
Actuarial present value of benefit obligation:
Accumulated benefit obligation
- vested $223.6 $211.0
- nonvested 5.0 4.1
------ ------
228.6 215.1
Effects of projected future compensation levels 34.4 30.5
------ ------
Projected benefit obligation 263.0 245.6
Plan assets at fair market value,
primarily listed stocks and bonds 254.4 239.1
------ ------
Projected benefit obligation in excess of plan assets $ 8.6 $ 6.5
====== ======
Reconciliation of funded status to recorded amounts:
Net pension liability included in balance sheet $ .6 $ 4.9
Unrecognized net asset from transition
to new pension accounting standard (.5) (.6)
Unrecognized net loss (gain) 3.5 (3.2)
Unrecognized prior service cost 5.0 5.4
------ ------
Projected benefit obligation in excess of plan assets $ 8.6 $ 6.5
====== ======
</TABLE>
GATX makes contributions to its defined benefit pension plans in addition to the
multiemployer pension plans of various unions. The contributions to all plans
were (in millions):
<TABLE>
<CAPTION>
For the year 1993 1992 1991
<S> <C> <C> <C>
Contributions to GATX's pension plans $ 7.4 $ 6.0 $ 7.0
Contributions to multiemployer pension plans 1.8 2.0 1.6
</TABLE>
Note I - Postretirement Benefits Other Than Pensions
GATX provides health care, life insurance and other benefits for certain retired
employees who meet established criteria. Most domestic employees are eligible
for health care and life insurance benefits if they retire from GATX with
immediate pension benefits under the GATX pension plan. The plans are either
contributory or non-contributory, depending on various factors.
In 1992, GATX implemented Statement of Financial Accounting Standards (SFAS)
No. 106 - "Employers' Accounting for Postretirement Benefits Other Than
Pensions" using the immediate recognition transition method, effective as of
January 1, 1992. SFAS No. 106 requires recognition of the cost of
postretirement benefits during an employee's active service life. GATX's
previous practice was to expense these costs as they were paid. GATX recorded a
charge of $55.5 million ($85.4 million pretax) in the first quarter of 1992 to
reflect the cumulative effect of the change in accounting principle for periods
prior to 1992. Aside from the one-time impact of the transition obligation,
adoption of SFAS No. 106 was not material to 1992 financial results.
50
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
GATX Corporation and Subsidiaries
<TABLE>
Net periodic postretirement cost includes the following components (in
millions):
<CAPTION>
For the Year 1993 1992
<S> <C> <C>
Current service cost $ .5 $ .3
Interest cost on accumulated
postretirement benefit obligation 7.3 7.8
---- ----
Net periodic postretirement benefit cost $7.8 $8.1
====== =====
Discount rate 8.5% 9.0%
====== =====
</TABLE>
Prior to 1992, the cost of providing these benefits to retired employees was
recognized primarily as payments were made and totaled $7.9 million in 1991.
<TABLE>
The following table sets forth the amounts recognized in GATX's consolidated
balance sheet (in millions):
<CAPTION>
December 31, 1993 1992
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees $ 84.3 $80.1
Fully eligible active plan participants 4.1 3.4
Other active plan participants 6.1 4.2
------ -----
Total accumulated
postretirement benefit obligation 94.5 87.7
Unrecognized loss (10.5) (2.9)
------ -----
Accrued postretirement benefit liability $ 84.0 $84.8
====== ======
</TABLE>
The accrued postretirement benefit liability was determined using an assumed
discount rate of 7.75% for 1993, 8.5% for 1992, and 9.0% at January 1, 1992 when
the transition obligation was calculated. The effect of these changes in the
discount rate assumption was a deferred loss of $5.2 million in 1993 and $2.9
million in 1992.
For measurement purposes, blended rates ranging from 13% decreasing to 5% over
the next four years and remaining at that level thereafter were used for the
increase in the per capita cost of covered health care benefits. The health
care cost trend rate assumption has a significant effect on the amount of the
obligation and periodic cost reported. An increase in the assumed health care
cost trend rates by 1% would increase the accumulated postretirement benefit
obligation by $5.3 million and would increase aggregate service and interest
cost components of net periodic postretirement benefit cost by $.5 million per
year.
Note J - Income Taxes
Effective January 1, 1992, GATX changed its method of accounting for income
taxes from the deferred method to the liability method as required by Statement
of Financial Accounting Standards No. 109, "Accounting for Income Taxes". As
permitted under the new rules, prior years' financial statements have not been
restated. The cumulative effect of adopting Statement 109 as of January 1, 1992
was to increase net income by $9.7 million. Aside from the one-time impact due
to the reassessment of deferred taxes, adoption of SFAS No. 109 was not material
to 1992 financial results.
51
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
GATX Corporation and Subsidiaries
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.
<TABLE>
Significant components of GATX's deferred tax liabilities and assets were (in
millions):
<CAPTION>
December 31, 1993 1992
<S> <C> <C>
Deferred tax liabilities:
Book/tax basis differences due to depreciation $298.5 $255.4
Leveraged leases 83.0 90.1
Lease accounting (other than leveraged) 33.4 64.0
Other 20.0 23.6
------ ------
Total deferred tax liabilities 434.9 433.1
Deferred tax assets:
Alternative minimum tax credit 56.1 45.3
Accruals not currently deductible for tax purposes 53.4 56.0
Allowance for possible losses 34.6 38.8
Postretirement benefits other than pensions 29.2 28.7
Other 13.4 30.2
------ ------
Total deferred tax assets 186.7 199.0
------ ------
Net deferred tax liabilities $248.2 $234.1
====== ======
</TABLE>
At December 31, 1993, GATX had an alternative minimum tax credit of $56.1
million that can be carried forward indefinitely to reduce future regular tax
liabilities.
GATX and its United States subsidiaries file a consolidated federal income tax
return. Amounts shown as Current - Federal represent taxes payable as
determined by the Alternative Minimum Tax. Income taxes (credit) consisted of
(in millions):
<TABLE>
<CAPTION>
Deferred
Liability Method Method
For the year 1993 1992 1991
<S> <C> <C> <C>
Current-
Domestic:
Federal $ 35.9 $ 28.5 $ 43.5
State and local 1.6 2.2 5.4
------- ------- -------
37.5 30.7 48.9
Foreign 2.2 3.3 .5
------- ------- -------
39.7 34.0 49.4
------- ------- -------
Deferred-
Domestic:
Federal 6.9 (24.4) (18.2)
State and local 4.7 (1.1) 1.5
------- ------- -------
11.6 (25.5) (16.7)
Foreign .1 1.1 .9
------- ------- -------
11.7 (24.4) (15.8)
------- ------- -------
Income tax expense $ 51.4 $ 9.6 $ 33.6
======= ====== =======
Income taxes paid $ 40.9 $ 31.2 $ 54.2
======= ====== =======
</TABLE>
52
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
GATX Corporation and Subsidiaries
<TABLE>
The sources of income before income taxes and equity in net earnings of
affiliated companies were (in millions):
<CAPTION>
For the year 1993 1992 1991
<S> <C> <C> <C>
Domestic $ 98.2 $ 13.9 $ 92.9
Foreign 6.2 1.0 (.8)
------- ------- -------
$ 104.4 $ 14.9 $ 92.1
======= ======= =======
</TABLE>
The reasons for the differences between reported income tax expense (credit) and
the amount computed by applying the statutory federal income tax rate of 35% in
1993 and 34% in 1992 and 1991 to income before income taxes were (in millions):
<TABLE>
<CAPTION>
Deferred
Liability Method Method
For the year 1993 1992 1991
<S> <C> <C> <C>
Federal income taxes at statutory rate $ 36.5 $ 5.0 $ 31.3
Add (deduct) effect of:
Tax rate increase on deferred taxes 7.3 - -
State income taxes 4.1 .5 4.7
Corporate owned life insurance (3.8) (4.2) (4.5)
Purchase accounting adjustments 2.2 .4 1.7
Foreign income 1.5 1.7 1.8
Goodwill amortization 1.2 1.4 1.2
Liquidation of foreign subsidiary - 4.0 -
Deferred tax turnaround - - (4.5)
Other 2.4 .8 1.9
------- ------- -------
$ 51.4 $ 9.6 $ 33.6
======= ======= =======
</TABLE>
<TABLE>
The components of deferred income tax credit for the year ended December 31,
1991 were (in millions):
<CAPTION>
For the year 1991
<S> <C>
Charge (credit):
Difference between book and tax
accounting for lease transactions $ (16.2)
Accelerated depreciation
for income tax purposes 12.8
Provision for losses (12.0)
Investment tax credit utilized 10.0
Alternative minimum tax (6.6)
Deferred tax turnaround (4.5)
Prior accrued taxes (3.4)
Leveraged lease accounting 1.5
Deferred state income taxes 1.4
Other 1.2
-------
$ (15.8)
=======
</TABLE>
53
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
GATX Corporation and Subsidiaries
Note K - Shareholders' Equity
GATX's Certification of Incorporation has authorized 60,000,000 shares of Common
Stock at a par value of $.625 per share and 5,000,000 shares of Preferred Stock
at $1.00 per share. Shares of Preferred Stock issued and outstanding consist of
Series A and B $2.50 Cumulative Convertible Preferred Stock and $3.875
Cumulative Convertible Preferred Stock.
Holders of both series of $2.50 Cumulative Convertible Preferred Stock are
entitled to receive a cumulative annual cash dividend of $2.50 per share. Each
share of such Preferred Stock may be called for redemption by GATX at $63 per
share, has a liquidating value of $60 per share, and may be converted into 2.5
shares of Common Stock.
Holders of $3.875 Cumulative Convertible Preferred Stock are entitled to receive
a cumulative annual cash dividend of $3.875 per share. Each share of such
Preferred Stock may be converted at the option of the holder at any time, unless
previously redeemed, into 1.1494 shares of Common Stock. The shares became
redeemable at GATX's option on and after August 1, 1992, initially at a
redemption price of $52.7125 per share and thereafter at prices declining to
$50.00 per share on and after August 1, 1999, plus dividends accrued and unpaid
at the redemption date. The liquidating value is $50 per share plus accrued and
unpaid dividends.
<TABLE>
At December 31, 1993, 5,712,693 shares of Common Stock were reserved for:
<CAPTION>
Shares
<S> <C>
Conversion of outstanding Preferred Stock 4,016,176
Incentive compensation programs 1,677,117
Employee service awards 19,400
---------
5,712,693
=========
</TABLE>
Holders of $2.50 and $3.875 Cumulative Convertible Preferred Stock and Common
Stock are entitled to one vote for each share held. Except in certain
instances, all such classes vote together as a single class.
Outstanding shares of Common Stock contain Preferred Stock Purchase Rights
("Rights"). One-half of one Right is associated with each outstanding share of
Common Stock. The Rights shall be redeemed effective May 15, 1994 and will only
become exercisable ten days after a person or group either becomes the
beneficial owner of 20% or more of the Common Stock or commences a tender or
exchange offer that would result in such person or group beneficially owning 30%
or more of the outstanding Common Stock. Each Right entitles the holder to
purchase one newly-issued unit of one one-hundredth of a share of Series 1
Junior Preferred Stock at an exercise price of $100.
54
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
GATX Corporation and Subsidiaries
If any person or group becomes the beneficial owner of 30% or more of GATX
Common Stock, GATX is the surviving corporation in a merger with a 20% or more
shareholder and its Common Stock is not changed or converted, or a 20% or more
shareholder engages in certain self-dealing transactions with GATX, then each
Right not owned by such person will entitle the holder to purchase, at the
Right's then current exercise price, shares of GATX Common Stock having a value
of twice the Right's then current exercise price. In addition, if, after any
person or group has become a 20% or more shareholder, GATX is involved in a
merger in which its Common Stock is converted or if GATX sells 50% or more of
its assets, each Right will entitle its holder to purchase for the exercise
price shares of common stock of the acquiring or successor company having a
value of twice the Right's then current exercise price.
GATX generally will be entitled to redeem the Rights in whole, but not in part,
at $.05 per Right at any time prior to the expiration of a ten-day period
(subject to extension) following public announcement of the existence of a 20%
holder or of a 30% or more tender offer. Until such time as the Rights become
exercisable, the Rights have no voting privileges and are attached to, and do
not trade separately from, the Common Stock.
<TABLE>
Transactions in Preferred Stock, Common Stock, treasury shares, and additional
capital are shown in the following table:
<CAPTION>
Capital Transactions Preferred Cost of Common Shares Additional
(In Thousands, Except Number of Shares) Stock Issued Common Stock Issued in Treasury (Deduction) Capital
Shares Amount Shares Amount Shares Amount Amount
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1991 3,466,433 $3,466 21,959,141 $13,724 (2,790,954) $(47,082) $299,992
Add (deduct):
Conversion of Preferred Stock
into Common Stock (21,974) (22) 54,932 34 (12)
Common Stock issued under option,
incentive and service award plans 175,486 110 4,789
Balance at December 31, 1991 3,444,459 3,444 22,189,559 13,868 (2,790,954) (47,082) 304,769
Add (deduct):
Conversion of Preferred Stock
into Common Stock (2,696) (2) 6,740 4 (2)
Common Stock issued under option,
incentive and service award plans 92,598 58 2,099
Balance at December 31, 1992 3,441,763 3,442 22,288,897 13,930 (2,790,954) (47,082) 306,866
Add (deduct):
Conversion of Preferred Stock
into Common Stock (1,212) (1) 3,029 2 (1)
Common Stock issued under option,
incentive and service award plans 199,425 125 5,564
Balance at December 31, 1993 3,440,551 $3,441 22,491,351 $14,057 (2,790,954) $(47,082) $312,429
</TABLE>
55
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
GATX Corporation and Subsidiaries
Note L - Incentive Compensation Plans
The 1985 Plan
The GATX Corporation 1985 Long Term Incentive Compensation Plan (the 1985 Plan),
as amended, contains provisions for the granting of non-qualified stock options,
incentive stock options, stock appreciation rights (SARs), cash and Common Stock
individual performance units (IPUs), restricted stock rights, restricted Common
Stock and performance awards. An aggregate of 2,700,000 shares of Common Stock
may be issued under the 1985 amended Plan. As of December 31, 1993, 451,542
shares are available for issuance under the Plan.
Non-qualified stock options and incentive stock options may be granted for the
purchase of Common Stock for periods not longer than ten years from the date of
grant. The exercise price will be not less than the higher of market value at
date of grant or par value of the Common Stock. All options become exercisable
one year from the date of grant.
SARs can be issued in conjunction with non-qualified or incentive stock options
and entitle the holder to receive the value of the SARs (the difference between
option price and fair market value of the Common Stock at time of exercise of
the SARs) in shares of Common Stock, cash, or a combination of the two at GATX's
discretion. Exercise of SARs results in cancellation of the underlying options.
During 1993, no SARs were issued and none were outstanding.
Cash and Common Stock IPUs may be granted to key employees and, if granted, will
be redeemed in cash and Common Stock, as applicable, with the redemption value
determined in part by the fair market value of the Common Stock as of the date
of redemption and in part by the extent to which preestablished performance
goals have been achieved. A total of 11,300 cash and stock IPUs were granted
during 1993 and 34,400 IPUs in total were outstanding at the end of the year.
In 1993, no shares of Common Stock or cash was paid to the participants in
redemption of previously issued IPUs.
Restricted stock rights may be granted to key employees entitling them to
receive a specified number of shares of restricted Common Stock. The recipients
of restricted Common Stock are entitled to all dividends and voting rights, but
the shares are not transferable prior to the expiration of a "restriction
period" as determined at the discretion of the Compensation Committee of the
Board of Directors. Performance Awards are granted to employees who have been
granted restricted stock rights or restricted Common Stock, but these Awards may
not exceed the market value of the restricted Common Stock when restrictions
lapse. The Performance Awards provide cash payments if certain criteria and
earnings goals are met over a predetermined period. During 1993, no grants or
payments were made.
56
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
GATX Corporation and Subsidiaries
The 1980 Plan
Stock options are outstanding under the GATX Corporation 1980 Long Term
Incentive Compensation Plan (the 1980 Plan), but no additional options, stock or
awards may be issued thereunder. At December 31, 1993, 1,000 shares of Common
Stock were reserved for grants previously made under the 1980 Plan.
<TABLE>
Data with respect to both plans are set forth below:
<CAPTION>
Number of
Shares Under
Stock Option Plans Price per Share
<S> <C> <C>
Outstanding at
January 1, 1993 1,143,800 $14.53 - $32.03
Granted 286,650 32.50 - 37.6875
Exercised or issued 199,125 14.53 - 32.03
Canceled 5,750 25.50 - 29.9375
Outstanding at
December 31, 1993 1,225,575 $14.53 - $37.6875
Outstanding at
December 31, 1993
by year granted:
1984-1987 99,000 $14.53 - $19.47
1988 115,000 25.655
1989 130,750 29.9375
1990 119,325 19.94
1991 227,850 26.13 - 28.1875
1992 247,000 25.50 - 30.75
1993 286,650 32.50 - 37.6875
1,225,575 $14.53 - $37.6875
Options exercisable at
December 31, 1993 938,925
Options available for future
grant at December 31, 1993 451,542
</TABLE>
57
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
GATX Corporation and Subsidiaries
Note M - Commitments, Contingencies and Concentrations of Credit Risk
GATX's revenues are derived from a wide range of industries and companies.
However, approximately 50% of total consolidated revenues are generated from the
transportation or storage of products for the chemical and petroleum industries.
In addition, approximately 20% of GATX's assets consist of commercial aircraft
operated by various domestic and international airlines.
Under its lease agreements, GATX retains legal ownership of the asset. With
loan financings, the loan is collateralized by the equipment. GATX performs
credit evaluations prior to approval of a lease or loan contract. Subsequently,
the creditworthiness of the customer and the value of the collateral are
monitored on an ongoing basis. GATX maintains an allowance for possible losses
and other reserves to provide for potential losses which could arise should
customers become unable to discharge their obligations to GATX and to provide
for permanent declines in investment value.
At December 31, 1993, GATX had commitments of $224.2 million to acquire
additional portfolio equipment, to lend funds, or to purchase residuals from
lessors. The lease commitments include an order by an aircraft joint venture
for four new aircraft which will be purchased in 1998-99. GATX also has firm
commitments to acquire railcars and to upgrade facilities totaling $115.0
million. Loan commitments comprise $16.5 million of the total funding
obligation; the fair values of these obligations total $.3 million as calculated
by estimating the current fees which would be charged for similar commitments.
In addition, GATX has issued $63.8 million of residual and rental guarantees.
GATX and its subsidiaries are engaged in various matters of litigation and have
a number of unresolved claims pending, including proceedings under governmental
laws and regulations related to environmental matters. While the amounts
claimed are substantial and the ultimate liability with respect to such
litigation and claims cannot be determined at this time, it is the opinion of
management that such liability, to the extent not recoverable from third parties
including insurers, is not likely to be material to GATX's consolidated
financial position or results of operations.
58
<PAGE>
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
GATX Corporation and Subsidiaries
<TABLE>
<CAPTION>
Quarter Ended: March 31 June 30 September 30 December 31
In Millions, Except Per Share Data 1993 1992 1993 1992 1993 1992 1993 1992
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Gross income $237.1 $231.9 $289.4 $259.3 $279.9 $272.8 $280.5 $255.1
Operating expenses and
provision for depreciation 144.4 140.9 169.0 158.6 177.6 164.3 183.2 163.5
Income before cumulative effect
of accounting changes 18.6 15.8 26.2 16.5 11.7 (15.4) 16.2 12.4
Net income (loss) 18.6 (30.0)(C) 26.2 16.5 11.7(B)(15.4)(D) 16.2 12.4(E)
Net income per share
before cumulative effect
of accounting changes(A) .77 .64 1.15 .68 .42 (.96) .64 .46
Net income (loss) per share(A) .77 (1.72)(C) 1.15 .68 .42 (.96) .64 .46
<FN>
(A) Quarterly results are not additive, as per share amounts are computed
independently for each quarter and the full year based on the respective
weighted average common shares and common share equivalents outstanding.
(B) Net income includes a $7.3 million charge for the cumulative increase in
deferred income taxes and a $1.2 million charge for the current year income
taxes as a result of the 1993 tax legislation which increased the federal
income tax rate from 34% to 35% retroactively to January 1, 1993.
(C) A one-time non-cash net accounting charge of $45.8 million or $2.35 per
share was recorded for postretirement benefits and deferred taxes.
(D) A $37.0 million aftertax special provision to the loss reserve was
recorded, reflecting the continued deterioration in the freighter aircraft
and real estate portfolios.
(E) Earnings were reduced by a tax provision of $4.0 million associated with
the liquidation of a foreign finance subsidiary.
</FN>
</TABLE>
Common and Preferred Stock Information
GATX common shares are listed on the New York, Chicago and London Stock
Exchanges under ticker symbol GMT. Shares of $2.50 Cumulative Convertible
Preferred Stock and $3.875 Cumulative Convertible Preferred Stock are listed on
the New York and Chicago Stock Exchanges.
The approximate number of holders of record of Common Stock, $2.50 Cumulative
Convertible Preferred Stock and $3.875 Cumulative Convertible Preferred Stock as
of February 28, 1994 was 3,634; 157 and 335, respectively. The following table
shows the reported high and low sales price of GATX common and preferred shares
on the New York Stock Exchange, the principal market for GATX shares, and the
dividends declared per share:
<TABLE>
<CAPTION>
Common Stock High Low Dividends
1993
<S> <C> <C> <C>
First Quarter $ 37.375 $31.375 $ .35
Second Quarter 38.375 34.50 .35
Third Quarter 41.50 37.25 .35
Fourth Quarter 42.25 33.00 .35
1992
<S> <C> <C> <C>
First Quarter $ 30.125 $25.75 $ .325
Second Quarter 27.875 24.25 .325
Third Quarter 29.50 25.25 .325
Fourth Quarter 33.75 25.00 .325
$2.50 Cumulative Convertible Preferred Stock High Low Dividends
1993
<S> <C> <C> <C>
First Quarter $ 90.00 $70.00 $ .625
Second Quarter 92.50 90.00 .625
Third Quarter 101.00 92.50 .625
Fourth Quarter 101.00 93.75 .625
1992
<S> <C> <C> <C>
First Quarter $ 72.00 $71.00 $ .625
Second Quarter 71.00 66.50 .625
Third Quarter 70.75 67.00 .625
Fourth Quarter 70.00 70.00 .625
$3.875 Cumulative
Convertible Preferred Stock High Low Dividends
1993
<S> <C> <C> <C>
First Quarter $ 54.00 $48.25 $ .96875
Second Quarter 54.50 51.75 .96875
Third Quarter 55.50 52.625 .96875
Fourth Quarter 56.00 51.50 .96875
1992
<S> <C> <C> <C>
First Quarter $48.00 $44.00 $ .96875
Second Quarter 48.50 45.00 .96875
Third Quarter 49.50 45.50 .96875
Fourth Quarter 49.375 45.50 .96875
</TABLE>
59
<PAGE>
<TABLE>
SELECTED FINANCIAL DATA
GATX Corporation and Subsidiaries
<CAPTION>
In Millions, except per share data
RESULTS OF OPERATIONS 1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C>
Gross income $1,086.9 $1,019.1 $ 989.1 $ 870.4 $ 701.7 $ 579.7
Costs and expenses 982.5 1,004.2 897.0 766.6 609.7 513.4
-------- -------- -------- -------- -------- --------
Income before income taxes, equity
in net earnings of affiliated companies
and cumulative effect of accounting changes 104.4 14.9 92.1 103.8 92.0 66.3
Income taxes 51.4 9.6 33.6 35.3 35.5 26.8
-------- -------- -------- -------- -------- --------
Income before equity in net
earnings of affiliated companies and
cumulative effect of accounting changes 53.0 5.3 58.5 68.5 56.5 39.5
Equity in net earnings of affiliated companies 19.7 24.0 24.2 14.4 9.2 7.5
-------- -------- -------- -------- -------- --------
Income before cumulative
effect of accounting changes 72.7 29.3 82.7 82.9 65.7 47.0
Cumulative effect of accounting changes - (45.8) - - - -
-------- -------- -------- -------- -------- --------
Net income (loss) $ 72.7 $ (16.5) $ 82.7 $ 82.9 $ 65.7 $ 47.0
======== ======== ======== ======== ======== ========
PER SHARE DATA
Net income (loss) applicable to
Common Stock, as adjusted $ 59.4 $ (29.8) $ 69.4 $ 69.5 $ 61.1 $ 48.0
Per share of Common Stock
and common stock equivalents:
Income before cumulative
effect of accounting changes $ 2.99 $ .82 $ 3.56 $ 3.61 $ 3.18 $ 2.52
Cumulative effect of accounting changes - (2.35) - - - -
-------- -------- -------- -------- -------- --------
Net income (loss) $ 2.99 $ (1.53) $ 3.56 $ 3.61 $ 3.18 $ 2.52
Shares used in computation (in thousands) 19,894 19,441 19,506 19,279 19,212 19,054
Per share assuming conversion, except in 1993
and 1992, of all outstanding Preferred Stock:
Net income (loss) $ 2.99 $ (1.53) $ 3.51 $ 3.54 $ 3.16 $ 2.49
Shares used in computation (in thousands) 19,894 19,441 23,561 23,399 21,024 19,432
Dividends declared per share of Common Stock $ 1.40 $ 1.30 $ 1.20 $ 1.10 $ 1.00 $ .90
FINANCIAL CONDITION
Total assets $3,392.1 $3,426.3 $3,514.2 $3,309.7 $3,060.1 $2,605.5
Total long-term debt and
capital lease obligations 1,713.8 1,724.6 1,798.5 1,715.1 1,456.2 1,305.5
Shareholders' equity 589.9 557.6 614.0 558.4 504.0 263.5
Common shareholders' equity 423.6 391.2 447.6 391.4 336.1 260.2
Common shareholders' equity per share 20.78 19.27 22.27 19.56 16.73 14.41
</TABLE>
60
<PAGE>
61
<PAGE>
PRIOR YEAR'S MANAGEMENT DISCUSSION:
COMPARISON OF 1992 AND 1991 OPERATIONS
GATX Corporation and Subsidiaries
The following discussion analyzes GATX's comparative performance for the years
ended December 31, 1992 and 1991. This information should be read in
conjunction with the consolidated financial statements on pages 36, 38 and 40.
The discussion of the comparative results of GATX's operations for the years
ended December 31, 1993 and 1992 are presented in the management's discussion
and analysis on pages 29, 30, 31, 37, 41, and 42, and the financial data of
business segments on pages 32 through 35.
GATX Corporation's net loss for 1992 was $17 million or $1.53 per common share
compared to net income of $83 million or $3.56 per common share for 1991. The
1992 loss was due to the adoption of two accounting statements which resulted in
a one-time non-cash net accounting charge of $46 million and the recording of a
$37 million aftertax special provision to the loss reserve. This special
provision enabled GATX to reflect the value of certain real estate and freighter
aircraft in these depressed markets. Before the cumulative effect of the
accounting changes, 1992 income was $29 million or $.82 per common share.
GATX's return on common equity for 1992 was 3.6% before the cumulative effect of
the accounting changes compared to 16.5% in 1991. The decrease was due to lower
earnings, partially offset by the reduction of equity reflecting the impact of
the net loss.
The discussion below addresses income before the impact of the 1992 accounting
changes which are shown by segment in a table on page 33.
RAILCAR LEASING AND MANAGEMENT - Transportation's gross income of $289 million
in 1992 increased $4 million from 1991. Higher average rental rates were offset
by a slightly lower average number of railcars on lease during the year.
Average cars on lease of 49,800 were down 200 cars from 1991. Fleet utilization
at December 31, 1992 was 92% on a fleet size of 54,400 railcars compared to 93%
on a fleet size of 53,600 in 1991.
Transportation's 1992 earnings were unfavorably affected by a weak economy and
regulatory pressure on the industry which increased repair costs. Income from
operations of $49 million decreased $6 million from 1991 as operating margins
continued to decline. The gain in 1991 from the sale of its Mexican affiliates
further adversely affected the comparison of 1992 results. Also, earnings for
1992 reflected a $1 million pretax charge related to refinancing equipment trust
certificates at favorable rates.
Transportation invested $108 million in the railcar fleet, up modestly from the
$101 million invested in 1991. In addition, in 1992 Transportation invested $8
million as it began a multi-year program to significantly upgrade its repair
facilities.
FINANCIAL SERVICES - Gross income of $178 million decreased $28 million from
1991. Disposition gains of $22 million decreased $28 million as fewer assets
were scheduled to come off lease. Interest income of $21 million was $7 million
less than 1991 due to the early repayment of an aircraft loan in late 1991 and
an increase in real estate loans on which income was not being recognized.
These decreases were partially offset by strong fee income which increased $6
million from the prior year to $14 million due to the development of new equity
sources in the international marketplace. In addition, lease income increased
$5 million to an all-time high of $116 million as a result of the expansion of
the operating lease portfolio.
Financial Services' 1992 loss from operations of $17 million compared to income
from operations of $28 million in 1991 was primarily the result of the $37
million aftertax special loss provision and the lower level of disposition
gains. Interest expense was virtually unchanged between the years as higher
average outstanding debt balances were offset by lower interest rates. Selling,
general and administrative expenses decreased $3 million from 1991 due to a
reduction in the average number of employees and lower outside service expenses.
Also, equity in net earnings of affiliated companies of $8 million decreased $2
million primarily reflecting lower income from aircraft joint ventures,
partially offset by a gain on the sale of a real estate joint venture.
Financial Services' portfolio additions of $178 million declined $190 million
from 1991 due to fewer portfolio investment opportunities.
62
<PAGE>
PRIOR YEAR'S MANAGEMENT DISCUSSION:
COMPARISON OF 1992 AND 1991 OPERATIONS
GATX Corporation and Subsidiaries
TERMINALS AND PIPELINES - Terminals' gross income of $266 million increased $17
million from 1991. This increase was the result of the completion of a number
of capital projects and strong results at many domestic operations. Capacity
utilization at Terminals' wholly-owned facilities increased 3% over 1991 year
end to 91% at the end of 1992. Throughput of 639 million barrels was down
slightly from 650 million barrels in 1991.
Terminals' income from operations of $23 million increased $4 million from 1991.
Late in 1991, Terminals established a business unit structure and eliminated its
regional offices to better control margins. The improved results represented
increased margins due to domestic facility improvements and cost controls,
combined with increased earnings from foreign affiliates. Operating costs were
$12 million higher than in 1991 largely due to higher maintenance, remediation
and claims expenses. Earnings in 1992 were negatively affected by $2 million of
pretax charges relating to the recognition of debt issuance costs and call
premiums associated with debt refinancings at favorable terms and interest
rates. Equity in net earnings of affiliated companies of $12 million improved
$2 million from 1991 primarily due to expansion of the Singapore operations.
Earnings in 1991 included a $.7 million aftertax gain on the sale of certain
small non-strategic pipelines.
Terminals invested $76 million in tank construction and other modifications and
improvements in 1992 compared to $85 million in 1991.
GREAT LAKES SHIPPING - American Steamship's gross income of $79 million
increased $3 million from 1991 due to slightly higher rates and a small increase
in tonnage. Tonnage carried in 1992 was 23.9 million tons compared to 23.5
million tons in 1991. The mix of commodities carried remained essentially the
same as in 1991. Freight revenue per ton increased slightly reflecting the
higher rates.
ASC's income from operations of $6 million in 1992 decreased slightly as 1991
income included the impact of a favorable settlement of a tax issue. The
contribution margin per ton increased slightly from 1991, primarily the result
of cost controls and improved vessel efficiency.
LOGISTICS AND WAREHOUSING - GATX Logistics' gross income of $212 million
increased $38 million over 1991 primarily due to incremental revenues of $25
million from the acquisition of certain operations of Itel Distribution Systems
(IDS) in June 1991 plus other new business.
Logistics recorded net income of $.9 million in 1992 compared to a loss of $.7
million in 1991. New business combined with an increase in margins due to cost
controls and the integration of the operations acquired from IDS contributed to
Logistics' profitability.
Logistics invested $16 million for equipment additions and warehouse
construction in both 1992 and 1991. Additions in 1991 also included $37 million
to acquire certain operations of IDS.
CORPORATE AND OTHER - GATX reported Corporate and Other net expenses of $34
million in 1992 compared to $26 million in 1991. An additional tax provision of
$4 million associated with the liquidation of a foreign finance subsidiary was a
large contributor to the increase over 1991. Also, Corporate recorded certain
costs in anticipation of the planned 1993 move to another downtown Chicago
location. Further contributing to the unfavorable prior year comparison was the
recognition in 1991 of $2.6 million of deferred gains from miscellaneous asset
sales.
63
<PAGE>
EXHIBIT 22
SUBSIDIARIES OF THE REGISTRANT
The following is a list of subsidiaries included in GATX's consolidated
financial statements (excluding a number of subsidiaries which, considered in
the aggregate, would not constitute a significant subsidiary), and the state of
incorporation of each:
General American Transportation Corporation (New York)--includes an
interest in one foreign subsidiary, Business Segment--Railcar Leasing
and Management
GATX Terminals Corporation (Delaware)--9 domestic subsidiaries and
interests in 14 foreign subsidiaries, Business Segment--Terminals
and Pipelines
GATX Financial Services, Inc. (Delaware)--74 domestic (which includes
GATX Capital Corporation) and 9 foreign subsidiaries, Business
Segment--Financial Services
GATX Logistics, Inc. (formerly The Unit Companies) (Florida)--33 domestic
subsidiaries, and 2 foreign subsidiaries, Business Segment--Logistics and
Warehousing
American Steamship Company (New York)--12 domestic subsidiaries,
Business Segment--Great Lakes Shipping
35
EXHIBIT 24
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the following: (i) Post
Effective Amendment No. 1 to Registration Statement No. 2-69135 on Form S-8,
filed February 17, 1982; (ii) Registration Statement No. 2-92404 on Form S-8,
filed July 26, 1984; (iii) Registration Statement No. 2-96593 on Form S-8, filed
March 22, 1985; (iv) Registration Statement No. 33-38790 on Form S-8 filed
February 1, 1991; and (v) Registration Statement No. 33-41007 on Form S-8 filed
June 7, 1991 of GATX Corporation, of our report dated January 25, 1994 with
respect to the consolidated financial statements and schedules of GATX
Corporation included and/or incorporated by reference in the Annual Report on
Form 10-K for the year ended December 31, 1993.
ERNST & YOUNG
Chicago, Illinois
March 18, 1994
-36-
<PAGE>
EXHIBIT 25
POWER OF ATTORNEY
The undersigned director of GATX Corporation, a New York corporation,
does hereby constitute and appoint James J. Glasser, Paul A. Heinen and
John F. Chlebowski, Jr., or any of them, attorneys and agents of the
undersigned, with full power and authority to sign in such director's
name, and on behalf of GATX Corporation, the 1993 Annual Report on Form 10-K
under the Securities Exchange Act of 1934, together with any amendments
thereto, hereby ratifying and confirming all that said attorneys and agents
and each of them may do by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal.
/s/ Weston R. Christopherson
______________________________
Weston R. Christopherson Director
Date: March 21, 1994
<PAGE>
POWER OF ATTORNEY
The undersigned director of GATX Corporation, a New York corporation, does
hereby constitute and appoint James J. Glasser, Paul A. Heinen and John F.
Chlebowski, Jr., or any of them, attorneys and agents of the undersigned, with
full power and authority to sign in such director's name, and on behalf of GATX
Corporation, the 1993 Annual Report on Form 10-K under the Securities Exchange
Act of 1934, together with any amendments thereto, hereby ratifying and
confirming all that said attorneys and agents and each of them may do by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal.
/s/ Franklin A. Cole
______________________________
Franklin A. Cole Director
Date: March 21, 1994
<PAGE>
POWER OF ATTORNEY
The undersigned director of GATX Corporation, a New York corporation, does
hereby constitute and appoint James J. Glasser, Paul A. Heinen and John F.
Chlebowski, Jr., or any of them, attorneys and agents of the undersigned, with
full power and authority to sign in such director's name, and on behalf of GATX
Corporation, the 1993 Annual Report on Form 10-K under the Securities Exchange
Act of 1934, together with any amendments thereto, hereby ratifying and
confirming all that said attorneys and agents and each of them may do by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal.
/s/ James W. Cozad
______________________________
Director
James W. Cozad
Date: March 21, 1994
<PAGE>
POWER OF ATTORNEY
The undersigned director of GATX Corporation, a New York corporation, does
hereby constitute and appoint James J. Glasser, Paul A. Heinen and John F.
Chlebowski, Jr., or any of them, attorneys and agents of the undersigned, with
full power and authority to sign in such director's name, and on behalf of GATX
Corporation, the 1993 Annual Report on Form 10-K under the Securities Exchange
Act of 1934, together with any amendments thereto, hereby ratifying and
confirming all that said attorneys and agents and each of them may do by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal.
/s/ Robert J. Day
______________________________
Director
Robert J. Day
Date: March 21, 1994
<PAGE>
POWER OF ATTORNEY
The undersigned director of GATX Corporation, a New York corporation, does
hereby constitute and appoint James J. Glasser, Paul A. Heinen and John F.
Chlebowski, Jr., or any of them, attorneys and agents of the undersigned, with
full power and authority to sign in such director's name, and on behalf of GATX
Corporation, the 1993 Annual Report on Form 10-K under the Securities Exchange
Act of 1934, together with any amendments thereto, hereby ratifying and
confirming all that said attorneys and agents and each of them may do by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal.
/s/ James L. Dutt
______________________________
Director
James L. Dutt
Date: March 21, 1994
<PAGE>
POWER OF ATTORNEY
The undersigned director of GATX Corporation, a New York corporation, does
hereby constitute and appoint James J. Glasser, Paul A. Heinen and John F.
Chlebowski, Jr., or any of them, attorneys and agents of the undersigned, with
full power and authority to sign in such director's name, and on behalf of GATX
Corporation, the 1993 Annual Report on Form 10-K under the Securities Exchange
Act of 1934, together with any amendments thereto, hereby ratifying and
confirming all that said attorneys and agents and each of them may do by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal.
/s/ Deborah M. Fretz
______________________________
Director
Deborah M. Fretz
Date: March 21, 1994
<PAGE>
POWER OF ATTORNEY
The undersigned director of GATX Corporation, a New York corporation, does
hereby constitute and appoint James J. Glasser, Paul A. Heinen and John F.
Chlebowski, Jr., or any of them, attorneys and agents of the undersigned, with
full power and authority to sign in such director's name, and on behalf of GATX
Corporation, the 1993 Annual Report on Form 10-K under the Securities Exchange
Act of 1934, together with any amendments thereto, hereby ratifying and
confirming all that said attorneys and agents and each of them may do by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal.
/s/ Richard A. Glesen
______________________________
Director
Richard A. Glesen
Date: March 21, 1994
<PAGE>
POWER OF ATTORNEY
The undersigned director of GATX Corporation, a New York corporation, does
hereby constitute and appoint James J. Glasser, Paul A. Heinen and John F.
Chlebowski, Jr., or any of them, attorneys and agents of the undersigned, with
full power and authority to sign in such director's name, and on behalf of GATX
Corporation, the 1993 Annual Report on Form 10-K under the Securities Exchange
Act of 1934, together with any amendments thereto, hereby ratifying and
confirming all that said attorneys and agents and each of them may do by
virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal.
/s/ Charles Marshall
______________________________
Director
Charles Marshall
Date: March 21, 1994
<PAGE>
POWER OF ATTORNEY
The undersigned director of GATX Corporation, a New York corporation, does
hereby constitute and appoint James J. Glasser, Paul A. Heinen and John F.
Chlebowski, Jr., or any of them, attorneys and agents of the undersigned, with
full power and authority to sign in such director's name, and on behalf of GATX
Corporation, the 1993 Annual Report on Form 10-K under the Securities Exchange
Act of 1934, together with any amendments thereto, hereby ratifying and
confirming all that said attorneys and agents and each of them may do by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal.
/s/ Michael E. Murphy
______________________________
Director
Michael E. Murphy
Date: March 21, 1994
<PAGE>
POWER OF ATTORNEY
The undersigned director of GATX Corporation, a New York corporation, does
hereby constitute and appoint James J. Glasser, Paul A. Heinen and John F.
Chlebowski, Jr., or any of them, attorneys and agents of the undersigned, with
full power and authority to sign in such director's name, and on behalf of GATX
Corporation, the 1993 Annuat Report on Form 10-K under the Securities Exchange
Act of 1934, together with any amendments thereto, hereby ratifying and
confirming all that said attorneys and agents and each of them may do by virtue
hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal.
/s/ Marcia T. Thompson
______________________________
Director
Marcia T. Thompson
Date: March 21, 1994
<PAGE>
