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; own and operate tank storage terminals, pipelines and related facilities; provide equipment and capital asset financing and related services; engage in Great Lakes shipping; and provide distribution and logistics support services and warehousing facilities. 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, 1995 on page 31 and pages 36 through 39, 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), headquartered in Chicago, Illinois, is principally engaged in leasing specialized railcars, primarily tank cars, under full service leases. As of December 31, 1995, its domestic fleet consisted of approximately 64,900 railcars, including 53,900 tank cars and 11,000 specialized freight cars, primarily Airslide covered hopper cars and plastic pellet cars. In addition, Transportation has approximately 1,500 railcars in its Mexican fleet. 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:
Transportation's customers use its railcars to ship over 700 different commodities, primarily chemicals, petroleum, food products and minerals. For 1995, approximately 54% of railcar leasing revenue was attributable to shipments of chemical products, 21% to petroleum products, 18% to food products and 7% 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 4% of total railcar leasing revenue.
Transportation typically leases new railcars 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 domestic railcars as of December 31, 1995 was approximately 95%.
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 major service centers consisting of four domestic and one foreign service center, and 25 mobile trucks in 17 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 207,000 tank cars owned and leased in the United States at December 31, 1995, Transportation had approximately 53,900. Principal competitive factors include price, service and availability.
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 also are 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, headquartered in Chicago, Illinois, owns and operates 28 terminals in 11 states, and eight terminals in the United Kingdom. Terminals also has joint venture interests in 14 international facilities. Additionally, Terminals owns or holds interests in four refined product pipeline systems.
As of December 31, 1995, Terminals had a total storage capacity of 75 million barrels. This includes 55 million barrels of bulk liquid storage capacity in the United States, 7 million barrels in the United Kingdom, and an equity interest in another 13 million barrels of storage capacity in Europe and the Far East. Terminals' smallest bulk liquid facility has a storage capacity of 95,000 barrels while its largest facility, located in Pasadena, Texas, has a capacity of over 12 million barrels. Capacity utilization at Terminals' wholly owned facilities was 85% at the end of 1995; throughput for the year was 655 million barrels.
For 1995, 75% of Terminals' revenue was derived from petroleum products, 23% from a variety of chemical products, and 2% from other 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, availability of other storage facilities, and the expansion of its customers into new geographical markets.
Terminals serves approximately 300 customers, including major oil and chemical companies as well as trading firms and larger independent refiners. No single customer accounts for more than 5% 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 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.
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 four U.S. cities and five foreign countries.
The financial services industry is both crowded and efficient. GATX Capital is one of the larger non-bank capital services companies. GATX 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, effective rates and transaction structuring skills.
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 aircraft and rail. At December 31, 1995, GATX Capital had approximately 800 financing contracts with 600 customers, aggregating $1.5 billion of investments before reserves. Of this amount, 39% consisted of investments associated with commercial jet aircraft, 18% railroad equipment, 13% warehouse and production equipment, 10% information technology equipment, 7% marine equipment, 4% golf courses, and 9% other.
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 1995, ASC carried 25.5 million tons of cargo. The primary materials ASC transported were iron ore, coal and limestone aggregates. Other commodities transported include sand, salt, potash, gypsum, grain, marble chips and slag. ASC's revenue source by industry served during 1995 was 49% steel, 23% power generation; 20% construction and 8% other. No single customer accounts for more than 24% of ASC's revenue.
ASC competes with three other U.S. flag Great Lakes commercial fleets, which include U.S.S. Great Lakes Fleet, Inc., Oglebay Norton Company, 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 Williamsville, New York, with one regional office.
LOGISTICS AND WAREHOUSING
GATX Logistics, Inc. (Logistics) is one of the largest third-party providers of distribution and logistics support services and warehousing facilities in the United States. Logistics, headquartered in Jacksonville, Florida, operates 104 facilities covering approximately 24 million square feet of warehousing space in North America with utilization of 97 percent at the end of 1995. 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 650 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 1995 was 22% motor vehicle parts and components, 16% grocery, 14% consumer products, 11% major appliances, 8% farm and construction equipment, 7% electronics, 5% chemical, 3% health care, and 14% other. No single customer accounts for more than 9% of Logistics' revenue.
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 5,900 active employees, of whom 25% are hourly employees covered by union contracts.
Environmental Matters - --------------------- Certain operations of GATX's subsidiaries (collectively GATX) 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 a number of 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 or future 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 three divested companies for which GATX believes it has adequate reserves.
GATX's environmental reserve at the end of 1995 was $94 million and reflects GATX's best estimate of the cost to remediate its environmental conditions. Additions to the reserve were $14 million in 1995 and $27 million in 1994; 1994 included $13 million recorded in conjunction with terminal acquisitions. Expenditures charged to the reserve amounted to $16 million and $12 million in 1995 and 1994, respectively.
In 1995, GATX made capital expenditures of $18 million for environmental and regulatory compliance compared to $15 million in 1994. These projects included marine vapor recovery, discharge prevention compliance, waste water systems, impervious dikes, tank modifications for emissions control, and tank car cleaning systems. Environmental projects authorized or currently under consideration would require capital expenditures of approximately $28 million in 1996. GATX anticipates it will make annual expenditures at a similar level over the next five years.
Item 2.
Item 2. Properties
Information regarding the location and general character of certain properties of GATX is included in Item 1, Business, of this document and in Exhibit 13, GATX Annual Report to Shareholders for the year ended December 31, 1995 on page 68, GATX Location of Operations (page reference is to the Annual Report to Shareholders). 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.
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, and has resolved the claims of the plaintiffs who opted out of the class. There was 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 were consolidated with these two cases. GATC was also
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 claim was also consolidated in the suit in the Eastern District of California. GATC has now entered into settlement agreements with the United States of America, the State of California, Southern Pacific and certain other defendants settling all material claims arising out of the above incident in an amount not material to GATC.
On July 14, 1995, a judgment in the amount of $9.7 million was entered against GATC by the U.S. District Court for the Northern District of Illinois in the matter of General American Transportation Corporation v. Cryo-Trans, Incorporated (Case No. 91 C 1305), a case involving an alleged patent infringement by GATC in the construction and use of its ArcticarTM cryogenically cooled railcar. That judgment has been reduced to approximately $9 million. GATC was also permanently enjoined from any further infringement of the patent as of August 1, 1995, subsequently extended to September 1, 1995. Of GATC's 65,000 railcar fleet, the injunction affected only 180 railcars, 80 of which were on lease and 100 on order. GATC has filed an appeal of the decision with the Federal Circuit Court of Appeals. Even in the event of an adverse decision on appeal, GATX does not believe the costs associated with the disposition of the affected cars will have a material adverse effect on GATX.
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, et al, filed December 1989 (No. 253604); Charles, et al, v. Calnev Pipe Line, Inc., et al, filed May 1990 (No. 256269); Abrego, et al, v. Southern Pacific Transportation Corporation, et al, filed May 1990 in the County of Los Angeles (No. BC 000947) and settled November, 1995; Glaspie, et al, v. Southern Pacific Transportation, et al, filed May 1990 in the County of Los Angeles (No. BC002047) and settled November 1995; Burney, et al, v. Southern Pacific, et al, filed May 1990 in the County of Los Angeles (BC000876) and settled May, 95; Ledbetter, et al, v. City of San Bernardino, et al, filed May 1990 (No. 256173) and settled April,1995; 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); 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. As Terminals' insurance carriers have assumed the defense of these lawsuits without a reservation of rights and have paid all of the settlements entered to date, GATX believes that the likelihood of a material adverse effect on GATX's consolidated financial position or operations is remote.
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 lawsuit 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, the District Court granted a motion for summary judgment in favor of GATX. That judgment was appealed and in August 1995 the U.S. Court of Appeals for the 7th Circuit affirmed the decision of the District Court. The plaintiffs then filed a petition with the Court of Appeals for a Rehearing In Banc which was denied. As the time for filing an appeal from the decision of the Court of Appeals has expired, that decision is now final. Accordingly, as there are no further avenues of appeal available to the plaintiff, this matter is now closed.
Item 4.
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 1978 61
Ronald H. Zech President and Chief Executive Officer 1996 52
David M. Edwards Vice President, Finance and 1994 44 Chief Financial Officer
David B. Anderson Vice President, Corporate Development, 1995 54 General Counsel and Secretary
William L. Chambers Vice President, Human Resources 1993 58
Ralph L. O'Hara Controller 1986 51
Brian A. Kenney Treasurer 1995 36
Officers are elected annually by the Board of Directors. Previously, Mr. Zech was President of GATX Financial Services from 1985 to 1994. In 1994 Mr. Zech was elected as President and Chief Operating Officer of GATX. On January 1, 1996, he was elected as Chief Executive Officer. Mr. Edwards was Senior Vice President - Finance and Administration of GATX Financial Services from 1990 to 1994. Mr. Anderson was Vice President, Corporate Development, General Counsel and Secretary of Inland Steel Industries from 1986 until 1995. Concurrently, he served as President of Inland Engineered Materials Corporation. Mr. Chambers was engaged in human resource consulting from 1991 until 1993. Mr. Kenney was Managing Director, Corporate Finance and Banking, for AMR Corporation from 1990-1995.
PART II
Item 5.
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, 1995 on page 63, which is incorporated herein by reference (page reference is to the Annual Report to Shareholders).
Item 6.
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, 1995, on pages 64 and 65, which is incorporated herein by reference (page references are to the Annual Report to Shareholders).
Item 7.
Item 7. Management Discussion and Analysis of Financial Condition and Results of Operations
Information required by this item is contained in Item 1, Business, section of this document and in Exhibit 13, GATX Annual Report to Shareholders for the year ended December 31, 1995, the management discussion and analysis of 1995 compared to 1994 on pages 33, 34, 35, 41, 43, 45 and 46, the financial data of business segments on pages 36 through 39, and the management discussion and analysis of 1994 compared to 1993 on pages 66 and 67, which is incorporated herein by reference (page references are to the Annual Report to Shareholders).
Item 8.
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, 1995, 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, 1995, 1994 and 1993 on page 40. Consolidated Balance Sheets -- December 31, 1995 and 1994, on page 42. Statements of Consolidated Cash Flows -- Years ended December 31, 1995, 1994 and 1993, on page 44. Notes to Consolidated Financial Statements on pages 47 through 62.
Quarterly results of operations are contained in Exhibit 13, GATX Annual Report to Shareholders for the year ended December 31, 1995 on page 63, which is incorporated herein by reference (page reference is to the Annual Report to Shareholders).
Item 9.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
PART III
Item 10.
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 13, 1996, which sections are incorporated herein by reference. Information regarding officers is included at the end of Part I.
Item 11.
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 13, 1996, which sections are incorporated herein by reference.
Item 12.
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 13, 1996, which sections are incorporated herein by reference. The following are the only persons known to the Company who beneficially owned as of March 12, 1996 more than 5% of the Company's $3.875 Cumulative Convertible Preferred Stock ("CCP Stock"):
Name and Address of Shares Beneficially Beneficial Owner Owned Percent of Class - ------------------- ------------------- ----------------
Fiduciary Trust 300,700 8.87% Company International (1) Two World Trade Center, New York, New York
SAFECO Corporation (2) 221,000 6.52% SAFECO Plaza Seattle, Washington 98135
(1) According to Schedule 13Gs dated February 1, 1996 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 300,000 shares of the CCP Stock and Fiduciary has sole dispositive and sole voting power over 700 shares of the CCP Stock. The 300,700 shares represent voting over 1.28% of the shares of Company Stock entitled to vote at the Company's Annual Meeting.
(2) According to a Form 13F filed with the Securities and Exchange Commission on January 26, 1996, SAFECO Corporation has sole voting authority over and shares investment discretion over 221,000 shares of the CCP Stock, 111,000 of which are managed by General Insurance Company of America and 110,000 of which are managed by SAFECO Asset Management Company. The 221,000 shares of CCP Stock represent .94% of the shares of the Company stock entitled to vote at the Company's Annual Meeting.
Item 13.
Item 13. Certain Relationships and Related Transactions
None.
PART IV
Item 14.
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, 1995, are filed in response to Item 8:
Statements of Consolidated Income and Reinvested Earnings -- Years ended December 31, 1995, 1994 and 1993 Consolidated Balance Sheets -- December 31, 1995 and 1994 Statements of Consolidated Cash Flows -- Years ended December 31, 1995, 1994 and 1993 Notes to Consolidated Financial Statements
2. -Financial Statement Schedules: Page
Schedule I Condensed Financial Information of Registrant............. 17
Schedule II Valuation and Qualifying Accounts....... 21
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.
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. By-Laws of GATX Corporation, as amended and restated as of July 29, 1994, incorporated by reference to GATX's Annual Report on Form 10-K for the fiscal year ended December 31, 1994, file number 1-2328.
10A. 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.
10B. GATX Corporation 1995 Long Term Incentive Compensation Plan, incorporated by reference to GATX's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 1995, file number 1-2328.
10C. Management Incentive Plan dated January 1, 1995, file number 1-2328, incorporated by reference to GATX's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 1995, file number 1-2328.
10D. Management Incentive Plan dated January 1, 1996, file number 1-2328. Submitted to the SEC along with the electronic submission of this Report on Form 10-K.
10E. 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.
10F. 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.
10G. 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.
Exhibit Number Exhibit Description Page
10H. 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.
10I. 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.
10J. 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.
10K. Amendment to Executive Deferred Income Plan Participation Agreements between GATX and participating executive officers entered into as of April 23, 1993, incorporated by reference to GATX's Annual Report on Form 10-K for the fiscal year ended December 31, 1993, file number 1-2328.
10L. 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.
10M. 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, 1995, incorporated by reference to GATX's Quarterly Report on Form 10-Q for the quarterly period ended March 31,1995, file number 1-2328.
10N. Agreements for Continued Employment Following Change of Control or Disposition of a Subsidiary between GATX Corporation and an additional executive officer dated as of July 1, 1995 and between GATX and another executive officer dated as of January 1, 1996 file number 1-2328. Submitted to the SEC along with the electronic transmission of this Annual Report on Form 10-K.
10O. Agreement dated July 29, 1994, supplementing the Agreement for Continued Employment Following Change of Control or Disposition of a Subsidiary between GATX Corporation and Ronald H. Zech, incorporated by reference to GATX's Annual Report on Form 10-K for the fiscal year ended December 31, 1994, file number 1-2328.
Exhibit Number Exhibit Description Page
10P. Letter Agreement dated August 17, 1993 between William Chambers and GATX, incorporated by reference to GATX's Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1995, file number 1-2328.
10Q. Letter Agreement dated May 31, 1995 between David B. Anderson and GATX, file number 1-2328. Submitted to the SEC along with the electronic transmission of this Annual Report on Form 10-K.
10R. Arrangements between James J. Glasser and GATX associated with Mr. Glasser's retirement from GATX as described on page 11 in the Section of the GATX Proxy Statement dated March 13, 1996 entitled "Termination of Employment and Change of Control Arrangements" are incorporated herein by reference thereto, file number 1-2328.
11A. Statement regarding computation of per share earnings. 22
11B. Statement regarding computation of per share earnings (full dilution) 23
12. Statement regarding computation of ratios of earnings to combined fixed charges and preferred stock dividends. 24
13. Annual Report to Shareholders for the year ended December 31, 1995, pages 31-70, with respect to the Annual Report on Form 10-K for the fiscal year ended December 31, 1995, file number 1-2328. Submitted to the SEC along with the electronic submission of this Report on Form 10-K.
21. Subsidiaries of the Registrant. 25
23. Consent of Independent Auditors. 26
24. Powers of Attorney with respect to the Annual Report on Form 10-K for the fiscal year ended December 31, 1995, file number 1-2328. Submitted to the SEC along with the electronic submission of this Report on Form 10-K.
27. Financial Data Schedule for GATX Corporation for the fiscal year ended December 31, 1995, file number 1-2328. Submitted to the SEC along with the electronic submission of this Report on Form 10-K.
99A. 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.
99B. Undertakings to the GATX Corporation 1995 Long Term Incentive Compensation Plan for the fiscal year ended December 31, 1995, file number 1-2328. Submitted to the SEC along with the electronic submission of this Report on Form 10-K.
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, 1995. These financial statements and related schedules are the responsibility of the Company'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, 1995 and 1994, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1995, 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.
ERNST & YOUNG LLP
Chicago, Illinois January 23, 1996
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/Ronald H. Zech -------------------------- Ronald H. Zech President, Chief Executive Officer and Director March 22, 1996
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.
James J. Glasser Chairman of the Board By /s/David B. Anderson and Director ---------------------- (David B. Anderson, /s/Ronald H. Zech Attorney-in-Fact) - ----------------------- Date: March 22, 1996 Ronald H. Zech President, March 22, 1996 Chief Executive Officer and Director
/s/David M. Edwards - ----------------------- David M. Edwards Vice President Finance and March 22, 1996 Chief Financial Officer
/s/Ralph L. O'Hara - ----------------------- Ralph L. O'Hara Controller and March 22, 1996 Principal Accounting Officer
Franklin A. Cole Director By /s/David B. Anderson James W. Cozad Director --------------------- James M. Denny Director (David B. Anderson, William C. Foote Director Attorney-in-Fact) Deborah M. Fretz Director Richard A. Giesen Director Miles L. Marsh Director Charles Marshall Director Michael E. Murphy Director Date: March 22, 1996
EXHIBIT 21 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 one domestic subsidiary, three foreign subsidiaries and interests in two foreign affiliates, Business Segment--Railcar Leasing and Management GATX Terminals Corporation (Delaware)--three domestic subsidiaries, one foreign subsidiary, one domestic affiliate, and interests in ten foreign affiliates, Business Segment--Terminals and Pipelines GATX Financial Services, Inc. (Delaware)--54 domestic subsidiaries (which includes GATX Capital Corporation), 12 foreign subsidiaries and eight domestic affiliates, Business Segment--Financial Services GATX Logistics, Inc. (Florida)--29 domestic subsidiaries and two foreign subsidiaries, Business Segment--Logistics and Warehousing American Steamship Company (New York)--12 domestic subsidiaries, Business Segment--Great Lakes Shipping
EXHIBIT 23 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; (ii) Registration Statement No. 2-96593 on Form S-8, filed March 22, 1985; (iii) Registration Statement No. 33-38790 on Form S-8 filed February 1, 1991; (iv) Registration Statement No. 33-41007 on Form S-8 filed June 7, 1991; and (v) Registration Statement No. 33-61183 filed on July 20, 1995 of GATX Corporation, of our report dated January 23, 1996 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, 1995.
ERNST & YOUNG LLP
Chicago, Illinois March 20, 1996
EXHIBIT FILED WITH DOCUMENT
10D. Management Incentive Plan dated January 1, 1996, file number 1-2328. Submitted to the SEC along with the electronic submission of this Report on Form 10-K.
10N. Agreements for Continued Employment Following Change of Control or Disposition of a Subsidiary between GATX Corporation and an additional executive officer dated as of July 1, 1995 and between GATX and another executive officer dated as of January 1, 1996 file number 1-2328. Submitted to the SEC along with the electronic transmission of this Annual Report on Form 10-K.
10Q. Letter Agreement dated May 31, 1995 between David B. Anderson and GATX, file number 1-2328. Submitted to the SEC along with the electronic transmission of this Annual Report on Form 10-K.
11A. Statement regarding computation of per share earnings.
11B. Statement regarding computation of per share earnings (full dilution)
12. Statement regarding computation of ratios of earnings to combined fixed charges and preferred stock dividends.
13. Annual Report to Shareholders for the year ended December 31, 1995, pages 31-70, with respect to the Annual Report on Form 10-K for the fiscal year ended December 31, 1995, file number 1-2328. Submitted to the SEC along with the electronic submission of this Report on Form 10-K.
21. Subsidiaries of the Registrant.
23. Consent of Independent Auditors.
24. Powers of Attorney with respect to the Annual Report on Form 10-K for the fiscal year ended December 31, 1995, file number 1-2328. Submitted to the SEC along with the electronic submission of this Report on Form 10-K.
27. Financial Data Schedule for GATX Corporation for the fiscal year ended December 31, 1995, file number 1-2328. Submitted to the SEC along with the electronic submission of this Report on Form 10-K.
99B. Undertakings to the GATX Corporation 1995 Long Term Incentive Compensation Plan for the fiscal year ended December 31, 1995, file number 1-2328. Submitted to the SEC along with the electronic submission of this Report on Form 10-K.