GATX Corp. -  Transportation & Logistics -  Category Main Page 

500 WEST MONROE STREET
CHICAGO, IL 60661-3676
(312) 621-6200
www.gatx.com

Sales

$1 billion

Business Description 
A  GATX Corporation (GATX or the Company) is headquartered in Chicago,
Illinois and provides its services primarily through four operating segments:
GATX Rail (Rail), GATX Air (Air), GATX Technology Services (Technology) and GATX
Specialty Finance (Specialty). Through these businesses, GATX combines asset
knowledge and services, structuring expertise, partnering and capital to provide
business solutions to customers and partners worldwide. GATX specializes in
railcar and locomotive leasing, aircraft operating leasing, information
technology leasing, and financing other large ticket equipment.

GATX invests in companies and joint ventures that complement its existing
business activities. GATX partners with financial institutions and operating
companies to improve scale in certain markets, broaden diversification within an
asset class, and enter new markets.
 

BUSINESS SEGMENTS

GATX RAIL

Rail is headquartered in Chicago, Illinois and is principally engaged in
leasing rail equipment, including tank cars, freight cars and locomotives. Rail
provides both full service leases and net leases. Under a full service lease,
Rail maintains and services the railcars, pays ad valorem taxes, and provides
other ancillary services. Under a net lease, the lessee is responsible for
maintenance, insurance and taxes. As of December 31, 2003, GATX's owned
worldwide fleet, including Rail and Specialty owned cars, totaled approximately
125,000 railcars. GATX also has an ownership interest in approximately 27,000
railcars worldwide through Rail and Specialty's investments in affiliated
companies.

As of December 31, 2003, Rail's North American fleet consisted of
approximately 105,000 railcars, comprised of 61,000 tank cars and 44,000 freight
cars. The cars in this fleet have depreciable lives of 30 to 38 years and an
average age of approximately 16 years. The utilization rate of Rail's North
American railcar fleet was 93% at December 31, 2003. Rail has interests in 6,000
railcars and 800 locomotives through its investments in affiliated companies in
North America.

In North America, Rail typically leases new railcars for terms of
approximately five years. Renewals, or extension of existing leases, are
generally for periods ranging from less than a year to ten years, with an
average lease term of four years. Rail purchases most of its new railcars from a
limited number of manufacturers, including Trinity Industries, Inc., American
Railcar Industries, and Union Tank Car Company. Rail signed agreements with
Trinity Industries, Inc. and with Union Tank Car Company for the purchase of
5,000 and 2,500 newly manufactured cars, respectively, for orders through 2007.

Rail's primary competitors in North America are Union Tank Car Company,
General Electric Railcar Services Corporation, and various financial
institutions. At the end of 2003, there were approximately 274,000 tank cars and
1.4 million freight cars owned and leased in North America. At December 31,
2003, Rail's owned fleet comprised approximately 22% of the tank cars in North
America and approximately 3% of the freight cars in North America. Principal
competitive factors include price, service, availability and customer
relationships.

Rail operates a network of major service centers across North America
supplemented by a number of smaller service centers and a fleet of service
trucks. Additionally, Rail utilizes independent third-party repair facilities.

In addition to its North American fleet, Rail has direct or indirect
ownership interests in three European fleets. In March 2001, Rail purchased
Dyrekcja Eksploatacji Cystern Sp. z.o.o. (DEC), Poland's national tank car fleet
and fuel distribution company. DEC's assets include approximately 10,000 tank
cars and a railcar maintenance network. DEC maintains two business offices and
operates three major service centers in Poland.

In December 2002, Rail acquired the remaining interest in KVG Kesselwagen
Vermietgesellschaft mbH, and KVG Kesselwagen Vermietgesellschaft m.b.h.
(collectively KVG), a leading European tank car lessor. Prior to the 2002
acquisition, Rail held a 49.5% interest in KVG. At December 31, 2003, KVG had
approximately 8,000 railcars, business offices in both Germany and Austria and a
service center in Germany. Rail also owns a 37.5% interest in AAE Cargo AG
(AAE), a freight car lessor headquartered in Switzerland that operates
approximately 18,000 cars.

Worldwide, Rail provides more than 120 railcar types used to ship over 650
different commodities, principally chemicals, petroleum, and food products.
During 2003, approximately 36% of railcar leasing revenue was attributable to
shipments of chemical products, 27% related to shipments of petroleum products,
14% related to shipments of food, 11% related to leasing cars to railroads and
12% related to other revenue sources. Rail leases railcars to over 900
customers, including major chemical, oil, food, agricultural and railroad
companies. In 2003, no single customer accounted for more than 3% of total
railcar leasing revenue.

GATX AIR

Air is headquartered in San Francisco, California and is primarily engaged
in leasing newer, narrow-body aircraft widely used by commercial airlines
throughout the world. Air typically enters into net leases under which the
lessee is responsible for maintenance, insurance and taxes. Air owns directly or
with others 163 aircraft, 48 of which are wholly-owned with the balance owned in
combination with other investors. All of the aircraft are in compliance with
Stage III noise standards and together have a weighted average age of
approximately five years based on net book value. Generally, new aircraft have
an estimated useful life of approximately 25 years. Aircraft currently on lease
have an average remaining lease term of approximately four years. Air typically
offers lease terms in the range of three to five years.

Air's customer base is diverse by carrier and geographic location. Air
leases to 59 airlines in 28 countries and in 2003, no single customer
contributed more than 8% of Air's total revenue or represented more than 9% of
Air's total net book value. At December 31, 2003, the countries with significant
concentrations of Air's commercial aircraft were Turkey, with approximately
$262.9 million or 13% of Air's total assets of $2,006.0 million, including off
balance sheet assets of $29.0 million, and Italy with approximately $238.8
million or 12% of Air's total assets, including off balance sheet assets. Air
purchases new aircraft from Airbus Industrie (Airbus) and The Boeing Company
(Boeing) and also acquires used aircraft in the secondary market. Air primarily
competes with independent leasing companies, leasing subsidiaries of commercial
banks, and financing arms of equipment manufacturers. The primary competitive
factors are pricing and availability of aircraft types.

Air also manages 74 aircraft for third parties. Air's management role
includes marketing the aircraft, monitoring aircraft maintenance and condition,
and administering the portfolio, including billing and collecting rents, accounting and

tax compliance, reporting and regulatory filings, purchasing insurance, and lessee

credit evaluation.

GATX TECHNOLOGY SERVICES

Technology, headquartered in Tampa, Florida, is a leading independent
lessor of information technology (IT) equipment in North America. In addition,
Technology has ownership interests in technology leasing companies in the United
Kingdom (U.K.) and Germany. Technology assists its customers in acquiring IT
equipment from leading manufacturers and resellers. This equipment includes
personal computers, servers, midrange computers, mainframe computers and
communications equipment. IT equipment is typically depreciated to an estimated
residual value over the lease term, which is approximately three to five years.
The average size of an IT transaction is approximately $.3 million.

In conjunction with leasing technology equipment, Technology provides life
cycle asset management services to help its customers acquire, manage, remarket
and dispose of IT assets. As an independent technology lessor, Technology is not
aligned with any particular manufacturer and it is able to provide these
services with an unbiased perspective. These services include assessing
alternative manufacturers, technologies, products and procurement plans.

Technology serves a diverse customer base, in a broad range of industries
including data processing and information services, retail, scientific,
utilities, manufacturing, finance and insurance. Technology is not dependent on
any single customer; no single customer accounts for more than 8% of
Technology's revenues.

Technology primarily competes with captive leasing companies of IT
equipment manufacturers, leasing subsidiaries of commercial banks and
independent leasing companies.

GATX SPECIALTY FINANCE

Specialty is headquartered in San Francisco, California and is comprised of
the former specialty finance and venture finance business units, which are now
managed as one operating segment. At the end of 2002, GATX announced its
intention to curtail investment in specialty finance and to sell or otherwise
run-off venture finance.

The Specialty portfolio consists primarily of leases and loans, frequently
including interests in an asset's residual value, and joint venture investments
involving a variety of underlying asset types, including marine, aircraft and
other diversified investments. The portfolio of the discontinued venture
business consists primarily of loans. Specialty also manages portfolios of
assets for third parties with a net book value of $864.0 million. The majority
of these managed assets are in markets in which GATX has a high level of
expertise such as aircraft, power generation, rail equipment, and marine
equipment. Specialty generates fee-based income through transaction structuring
and portfolio management services. Fees are earned at the time a transaction is
completed and/or on an ongoing basis in the case of portfolio management
activities. Specialty also derives remarketing income when assets are sold from
the owned portfolio and residual sharing fees from managed assets sold on behalf
of third parties.

Specialty sold its venture finance portfolios in the U.K. and Canada in
2003, and continues to run-off the remaining venture finance portfolio. GATX
anticipates that the venture finance portfolio will be substantially liquidated
by the end of 2005. Venture finance-related assets, including $1.6 million off
balance sheet assets, are $105.5 million at December 31, 2003, 15% of
Specialty's total assets of $721.3 million, including $13.7 million of off
balance sheet assets.

The principal competitors of Specialty are captive leasing companies of
equipment manufacturers, leasing subsidiaries of commercial banks, independent
leasing companies, lease brokers and investment banks.