<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
---------------------------------------------------------------
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
OR
TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
---------------------------------------------------------------
Full title of the Plan:
GATX HOURLY EMPLOYEES RETIREMENT SAVINGS PLAN
Name of the issuer of the securities held pursuant to the Plan and the address
of its principal executive office:
GATX Corporation
500 West Monroe Street, Chicago, Illinois 60661-3676
(312) 621-6200
<PAGE> 2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees have duly caused this annual report to be signed by the undersigned
thereunto duly authorized.
GATX CORPORATION SALARIED
EMPLOYEES RETIREMENT SAVINGS PLAN
(Name of Plan)
By: /s/ James Conniff
----------------------------
James Conniff
Plan Administrator
Dated: June 29, 1999
<PAGE> 3
GATX Corporation Hourly Employees Retirement Savings Plan
Index to Financial Statements and Supplemental Schedules
For Annual Report on form 11-K
Years ended December 31, 1998 and 1997
CONTENTS
<TABLE>
<S> <C>
Report of Independent Auditors.....................................................4
Consent of Independent Auditors....................................................5
Financial Statements
Statements of Assets Available for Benefits, With Fund Information.................6
Statement of Changes in Assets Available for Benefits, With Fund Information.......7
Notes to Financial Statements......................................................9
Supplemental Schedules
Line 27a - Schedule of Assets Held for Investment Purposes........................17
Line 27d - Schedule of Reportable Transactions....................................18
</TABLE>
<PAGE> 4
Report of Independent Auditors
Employee Benefits Committee
GATX Corporation
We have audited the accompanying statements of assets available for benefits of
the GATX Corporation Hourly Employees Retirement Savings Plan as of December 31,
1998 and 1997, and the related statement of changes in assets available for
benefits for the year ended December 31, 1998. These financial statements are
the responsibility of the Plan'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 assets available for benefits of the Plan at December
31, 1998 and 1997, and the changes in its assets available for benefits for the
year ended December 31, 1998, in conformity with generally accepted accounting
principles.
The Fund Information in the statement of net assets available for benefits and
the statement of changes in net assets available for benefits is presented for
purposes of additional analysis rather than to present the net assets available
for benefits and changes in net assets available for benefits of each fund. The
Fund Information has been subjected to the auditing procedures applied in our
audits of the financial statements and, in our opinion, is fairly stated in all
material respects in relation to the financial statements taken as a whole.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of December 31, 1998, and reportable
transactions for the year then ended, are presented for purposes of additional
analysis and are not a required part of the financial statements but are
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. These supplemental schedules are the responsibility of the
Plan's management. The supplemental schedules have been subjected to the
auditing procedures applied in our audits of the financial statements and, in
our opinion, are fairly stated in all material respects in relation to the
financial statements taken as a whole.
Ernst & Young LLP
June 8, 1999
Chicago, IL
4
<PAGE> 5
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the following: (i) Registration
Statement No. 2-92404 on Form S-8, filed July 26, 1984 and (ii) Registration
Statement No. 33-41007 on Form S-8 filed June 7, 1991, pertaining to the GATX
Hourly Employees Retirement Savings Plan, of our report dated June 8, 1999, with
respect to the financial statements of GATX Hourly Employees Retirement Savings
Plan included in this Annual Report on Form 11-K for the year ended December 31,
1998.
ERNST & YOUNG LLP
Chicago, Illinois
June 28, 1999
5
<PAGE> 6
EIN 36-1124040
Plan #004
GATX Corporation Hourly Employees Retirement Savings Plan
Statement of Assets Available for Benefits, With Fund Information
December 31, 1998
EIN 36-1124040
Plan #004
GATX Corporation Hourly Employees Retirement Savings Plan
Statement of Assets Available for Benefits, With Fund Information
December 31, 1998
<TABLE>
<CAPTION>
GATX
FIDELITY CORPORATION FIDELITY
MANAGED COMMON SPARTAN FIDELITY LOW-PRICED TEMPLETON
INCOME STOCK U.S. EQUITY PURITAN STOCK FOREIGN
PORTFOLIO II FUND INDEX FUND FUND FUND FUND A
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments at current value (Note 3):
GATX Corporation Common Stock Fund $ -- $676,541 $ -- $ -- $ -- $ --
-- --
Spartan U.S. Equity Index Fund -- -- 2,053,061 -- -- --
Fidelity Puritan Fund -- -- -- 864,839 -- --
Fidelity Managed Income Portfolio II 1,431,353 -- -- -- -- --
Fidelity Low-Priced Stock Fund -- -- -- -- 40,307 --
Templeton Foreign Fund A -- -- -- -- -- 30,104
Participant loans -- -- -- -- -- --
------------------------------------------------------------------------------
Total assets $1,431,353 $676,541 $ 2,053,061 $ 864,839 $ 40,307 $ 30,104
==============================================================================
<CAPTION>
PARTICIPANT
LOANS TOTAL
--------------------------
<S> <C> <C>
ASSETS
Investments at current value (Note 3):
GATX Corporation Common Stock Fund $ -- $ 676,541
Spartan U.S. Equity Index Fund -- 2,053,061
Fidelity Puritan Fund -- 864,839
Fidelity Managed Income Portfolio II -- 1,431,353
Fidelity Low-Priced Stock Fund -- 40,307
Templeton Foreign Fund A -- 30,104
Participant loans 524,117 524,117
--------------------------
Total assets $ 524,117 $ 5,620,322
==========================
</TABLE>
See notes to financial statements.
6
<PAGE> 7
GATX Corporation Hourly Employees Retirement Savings Plan
Statement of Assets Available for Benefits, With Fund Information
December 31, 1997
<TABLE>
<CAPTION>
FUND INFORMATION
--------------------------------------------------------
CIGNA FIDELITY
GUARANTEED GROWTH FIDELITY
LONG-TERM OPPORTUNITY BALANCED PARTICIPANT
ACCOUNT FUND FUND LOANS TOTAL
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments at current value (Note 3):
CIGNA Guaranteed Long-Term Account $1,404,958 $ -- $ -- $ -- $1,404,958
Fidelity Growth Opportunity Fund -- 1,544,018 -- -- 1,544,018
Fidelity Balanced Fund -- -- 667,124 -- 667,124
Participant loans -- -- -- 265,589 265,589
-----------------------------------------------------------------------
Total assets $1,404,958 $ 1,544,018 $ 667,124 $ 265,589 $3,881,689
=======================================================================
</TABLE>
See notes to financial statements.
7
<PAGE> 8
EIN 36-1124040
Plan #004
GATX Corporation Hourly Employees Retirement Savings Plan
Statement of Changes in Assets Available for Benefits, With Fund Information
December 31, 1998
<TABLE>
<CAPTION>
FUND INFORMATION
-----------------------------------------------------------------------------
GATX
CIGNA FIDELITY CORPORATION
GUARANTEED GROWTH FIDELITY MANAGED COMMON
LONG-TERM OPPORTUNITY BALANCED INCOME STOCK FUND
ACCOUNT FUND FUND PORTFOLIO II (NOTE 4)
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ADDITIONS
Contributions by GATX Corporation and subsidiaries $ -- $ -- $ -- $ -- $ 104,891
Salary deferrals by participants 39,772 41,484 21,401 398,806 54,376
Interest income 15,339 -- -- 1,537 --
Dividend income -- -- -- 65,638 9,874
Transfer from CIGNA -- -- -- 1,483,821 --
Adjustment to loan fund -- -- -- -- --
-----------------------------------------------------------------------------
55,111 41,484 21,401 1,949,802 169,141
DEDUCTIONS
Withdrawals by participants (32,905) (22,787) (4,499) (69,386) (3,337)
Transfer to Fidelity Management Trust Company (1,483,821) (1,606,227) (696,301) -- --
Transfer to GATX Corporation Salaried Employees
Retirement Savings Plan -- -- -- (5,168) --
-----------------------------------------------------------------------------
(1,516,726) (1,629,014) (700,800) (74,554) (3,337)
Net realized and unrealized increase (decrease) in
current value of investments -- 109,710 36,769 -- (1,981)
Interfund transfers 56,657 (66,198) (24,494) (443,895) 512,718
-----------------------------------------------------------------------------
Net increase (decrease) (1,404,958) (1,544,018) (667,124) 1,431,353 676,541
Assets available for benefits:
Beginning of year 1,404,958 1,544,018 667,124 -- --
=============================================================================
End of year $ -- $ -- $ -- $ 1,431,353 $ 676,541
=============================================================================
<CAPTION>
FUND INFORMATION
-----------------------------------------
FIDELITY
SPARTAN FIDELITY LOW-PRICED TEMPLETON
U.S. EQUITY PURITAN STOCK FOREIGN PARTICIPANT
INDEX FUND FUND FUND FUND A LOANS TOTAL
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ADDITIONS
Contributions by GATX Corporation and subsidiaries $ -- $ -- $ -- $ -- $ -- $ 104,891
Salary deferrals by participants 502,975 247,446 17,331 8,197 -- 1,331,788
Interest income 1,277 553 -- -- 27,537 46,243
Dividend income 33,002 78,000 2,783 4,152 -- 193,449
Transfer from CIGNA 1,606,227 696,301 -- -- -- 3,786,349
Adjustment to loan fund -- -- -- -- 31,458 31,458
-------------------------------------------------------------------------------
2,143,481 1,022,300 20,114 12,349 58,995 5,494,178
DEDUCTIONS
Withdrawals by participants (82,470) (16,131) (2,395) (614) (71,409) (305,933)
Transfer to Fidelity Management Trust Company -- -- -- -- -- (3,786,349)
Transfer to GATX Corporation Salaried Employees
Retirement Savings Plan (1,271) (1,839) -- -- -- (8,278)
-------------------------------------------------------------------------------
(83,741) (17,970) (2,395) (614) (71,409) (4,100,560)
Net realized and unrealized increase (decrease) in
current value of investments 224,204 (12,981) (4,455) (6,251) -- 345,015
Interfund transfers (230,883) (126,510) 27,043 24,620 270,942 --
-------------------------------------------------------------------------------
Net increase (decrease) 2,053,061 864,839 40,307 30,104 258,528 1,738,633
Assets available for benefits:
Beginning of year -- -- -- -- 265,589 3,881,689
===============================================================================
End of year $ 2,053,061 $ 864,839 $ 40,307 $ 30,104 $ 524,117 $ 5,620,322
===============================================================================
</TABLE>
See notes to financial statements.
8
<PAGE> 9
EIN 36-1124040
Plan #004
GATX Corporation Hourly Employees Retirement Savings Plan
Notes to Financial Statements
Years ended December 31, 1998 and 1997
1. DESCRIPTION OF THE PLAN
The following description of the GATX Corporation (GATX or the Company) Hourly
Employees Retirement Savings Plan (the Plan) provides only general information.
Participants should refer to the Plan document for a more complete description
of the Plan's provisions.
GENERAL
The Plan is a defined-contribution plan which was established January 1, 1994,
for hourly employees of the General American Transportation Corporation and GATX
Terminals Corporation subsidiaries of the Company who have completed at least
520 hours of service within the last 12 months.
CONTRIBUTIONS
Each year, participants may contribute between 1% and 15% of pretax annual
compensation, as defined in the Plan. Participants may also rollover amounts
representing distributions from other qualified defined-benefit or
defined-contribution plans. Starting January 1, 1998, the Company began to
contribute $.50 for each participant contribution dollar up to 3%, for the
hourly employees of the General American Transportation Corporation.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contributions and
allocation of Plan earnings. Allocations are based on account balances, as
defined. The benefit to which a participant is entitled is the benefit that can
be provided from the participant's account.
9
<PAGE> 10
GATX Corporation Hourly Employees Retirement Savings Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
VESTING
Participants are immediately 100% vested in their contributions plus actual
earnings thereon.
INVESTMENT OPTIONS
Until January 1, 1998, Connecticut General Life Insurance Company (CIGNA) served
as trustee and record keeper of the Plan. Under the terms of the agreement,
CIGNA invested contributions in three investment accounts in proportions
specified by participants:
CIGNA Guaranteed Long-Term Account - An unallocated insurance contract,
which is comprised of investments in long-term fixed income securities.
Fidelity Balanced Fund - Invests in any combination of common stock,
securities convertible to common stock, preferred stock, and fixed
income securities.
Fidelity Growth Opportunity Fund - Seeks capital growth by investing
primarily in common stocks.
As of January 1, 1998, Fidelity Management Trust Company (Fidelity) became the
trustee; however, the assets of the Plan were not transferred until March 17,
1998. At that point, participant balances from the CIGNA Guaranteed Long-Term
Account were transferred to the Managed Income Portfolio II; balances from the
Fidelity Growth Opportunity Fund were transferred to the Fidelity Spartan U.S.
Equity Index Fund; and balances in the Fidelity Balanced Fund were transferred
to the Fidelity Puritan Fund. Effective April 1998, participants were allowed to
elect the following options:
Managed Income Portfolio II - A stable fund that preserves principal
while earning interest income.
GATX Corporation Common Stock Fund - A fund that consists of GATX
Corporation Common Stock.
Spartan U.S. Equity Index Fund - A growth and income mutual fund that
invests primarily in S&P 500 companies.
10
<PAGE> 11
GATX Corporation Hourly Employees Retirement Savings Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
Fidelity Puritan Fund - A balanced mutual fund that provides as much
income as possible while preserving capital by investing in high
yielding U.S. and foreign securities.
Fidelity Low-Priced Stock Fund - A growth mutual fund that seeks
capital appreciation by investing in undervalued stock of smaller
companies.
Templeton Foreign Fund A - A growth mutual fund that invests primarily
in international common stock.
Until April 1998, participants could change their investment options quarterly.
After April 1998, participants may change investment options four times per
calendar year.
PAYMENT OF BENEFITS
In the event of retirement (as defined), death, permanent disability, or
termination of employment, the vested balance in the participant's account will
be distributed to the participant or the participant's beneficiary in a single
lump-sum cash payment.
WITHDRAWALS
Withdrawals are available to participants for immediate and heavy financial need
(as defined). The withdrawal amount is limited to the participant's contribution
portion and cannot exceed the amount required to relieve the financial need. The
Plan also allows for age 59 1/2 withdrawals, as defined.
ADMINISTRATIVE EXPENSES
It is the intent of the Company to pay the administrative expenses of the Plan,
but if the Company fails to make the payments, or so directs, there may be a
charge against the Plan for these expenses.
11
<PAGE> 12
GATX Corporation Hourly Employees Retirement Savings Plan
Notes to Financial Statements (continued)
1. DESCRIPTION OF THE PLAN (CONTINUED)
PARTICIPANT LOANS
A participant may borrow an amount up to the lesser of $50,000 or 50% of their
account balance. Such loans, which are payable over a term specified by the
Plan, bear interest at a rate of 1% above the prime rate and are secured by a
participant's account balance in the Plan.
PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to terminate the Plan subject to the provisions of ERISA.
2. SIGNIFICANT ACCOUNTING POLICIES
INVESTMENT VALUATION AND INCOME RECOGNITION
The CIGNA group annuity contract is stated at contract value, which is
determined by the insurance company in accordance with the terms of the
contract. Contract value represents contributions made under the contract, plus
interest at the contract rate, less withdrawals. The fair value of the
participation units owned by the Plan in the mutual funds is based on quoted
redemption values on the last business day of the Plan year. Participant loans
are stated at cost which approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis Dividends are recorded on the
ex-dividend date.
CONTRIBUTIONS
Participant contributions are made through payroll deductions and recorded in
the period the deductions are made.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires the plan administrator to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
12
<PAGE> 13
GATX Corporation Hourly Employees Retirement Savings Plan
Notes to Financial Statements (continued)
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
RECLASSIFICATION
Certain items in the 1997 financial statements have been reclassified to conform
to the 1998 presentation.
3. INVESTMENTS
Except for investments held in a Master Trust (Note 4), the Plan's investments
held during the year appreciated (depreciated) in fair value as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
1998 1997
--------- ---------
<S> <C> <C>
Netrealized and unrealized appreciation
(depreciation) in fair value of investments:
Fidelity Growth Opportunity Fund $ 109,710 $ 266,375
Fidelity Balanced Fund 36,769 97,599
Spartan U.S. Equity Index Fund 224,204 --
Fidelity Puritan Fund (12,981) --
Fidelity Low-Priced Stock Fund (4,455) --
Templeton Foreign Fund A (6,251) --
--------- ---------
$ 346,996 $ 363,974
========= =========
</TABLE>
Except for investments held in a Master Trust (Note 4), the Plan held the
following investments with 5% or more of Plan assets at year-end:
<TABLE>
<CAPTION>
DECEMBER 31
1998 1997
---------- ----------
<S> <C> <C>
CIGNA Guaranteed Long-Term Account $ -- $1,404,958
Fidelity Growth Opportunity Fund -- 1,544,018
Fidelity Balanced Fund -- 667,124
Fidelity Managed Income Portfolio II 1,431,353 --
Spartan U.S. Equity Index Fund 2,053,061 --
Fidelity Puritan Fund 864,839 --
</TABLE>
13
<PAGE> 14
GATX Corporation Hourly Employees Retirement Savings Plan
Notes to Financial Statements (continued)
4. MASTER TRUST
The GATX Stock Fund is in a Master Trust which includes the stock funds of three
GATX benefit plans: the GATX Corporation Salaried Employees Retirement Savings
Plan; the GATX Corporation Hourly Employees Retirement Savings Plan; and the
GATX Logistics Inc. 401(k) Cash Accumulation Plan.
<TABLE>
<CAPTION>
DECEMBER 31
1998
-----------
<S> <C>
ASSETS
GATX Corporation common stock $65,423,003
RECEIVABLES
Other receivables 227,974
===========
$65,650,977
===========
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31
1998
------------
<S> <C>
ADDITIONS
Contributions $ 4,283,297
Interfund transfers 3,272,023
Loan repayments 380,641
Interest and dividend income 1,670,167
------------
9,606,128
DEDUCTIONS
Benefit payments (2,868,899)
Participant loans (571,065)
------------
(3,439,964)
Net realized and unrealized appreciation in fair value of investments 2,788,325
Beginning of year 56,696,488
============
End of year $ 65,650,977
============
</TABLE>
The plan has a 1.0% interest in the Master Trust.
14
<PAGE> 15
GATX Corporation Hourly Employees Retirement Savings Plan
Notes to Financial Statements (continued)
5. TAX STATUS
The Internal Revenue Service ruled August 3, 1995, that the Plan qualified under
section 401(a) of the Internal Revenue Code (IRC), and, therefore, the related
trust is not subject to tax under present income tax law. Once qualified, the
Plan is required to operate in conformity with the IRC to maintain its
qualification. The plan administrator is not aware of any course of action or
series of events that have occurred that might adversely affect the Plan's
qualified status.
6. YEAR 2000 ISSUE (UNAUDITED)
The Company has developed a plan to modify its internal information technology
to be ready for the year 2000, and has begun converting critical data processing
systems. The project also includes determining whether third-party service
providers have reasonable plans in place to become Year 2000 compliant. The
Company expects the project to be complete by late 1999. The Company does not
expect this project to have a significant effect on Plan operations.
15
<PAGE> 16
Supplemental Schedules
<PAGE> 17
EIN 36-1124040
Plan #004
GATX Corporation Hourly Employees Retirement Savings Plan
Line 27a - Schedule of Assets Held for Investment Purposes
December 31, 1998
<TABLE>
<CAPTION>
CURRENT
IDENTITY OF ISSUER/DESCRIPTION OF ISSUE COST VALUE
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Fidelity Management Trust Company*:
Fidelity Managed Income Portfolio II $1,431,353 $1,431,353
Spartan U.S. Equity Index Fund 1,827,701 2,053,061
Fidelity Puritan Fund 873,041 864,839
Fidelity Low-Priced Stock Fund 44,460 40,307
Templeton Foreign Fund A 35,051 30,104
Participants Loans - 9.5% Interest rate -- 524,117
============================
$4,211,606 $4,943,781
============================
</TABLE>
*Party in interest to the Plan.
17
<PAGE> 18
EIN 36-1124040
Plan #004
GATX Corporation Hourly Employees Retirement Savings Plan
Line 27d - Schedule of Reportable Transactions
Year ended December 31, 1998
<TABLE>
<CAPTION>
CURRENT VALUE
OF
TOTAL ASSET ON
PURCHASE SELLING COST TRANSACTION NET
IDENTITY OF PARTY INVOLVED/DESCRIPTION OF ASSETS PRICE PRICE OF ASSET DATE GAIN (LOSS)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Category (i) - Series of transactions in excess of 5% of Plan assets
Fidelity Management Trust Company:
Fidelity Puritan Fund $ 696,301 $ -- $ 696,301 $ 696,301 $ --
Fidelity Managed Income Portfolio II 1,427,792 -- 1,427,792 1,427,792 --
Spartan U.S. Equity Index Fund 1,574,638 -- 1,574,638 1,574,638 --
Category (iii) - Series of transactions in excess of 5% of Plan assets
Fidelity Management Trust Company:
Fidelity Puritan Fund 1,115,120 -- 1,115,120 1,115,120 --
-- 237,299 242,079 237,299 (4,780)
Fidelity Managed Income Portfolio II 2,185,002 -- 2,185,002 2,185,002 --
-- 753,650 753,650 753,650 --
Spartan U.S. Equity Index Fund 2,427,736 -- 2,427,736 2,427,736 --
-- 598,879 600,035 598,879 (1,156)
</TABLE>
There were no category (ii) or (iv) reportable transactions during the year
ended December 31, 1998.
18
