0000357019-95-000016.txt : 19950815 0000357019-95-000016.hdr.sgml : 19950815 ACCESSION NUMBER: 0000357019-95-000016 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950814 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GATX CAPITAL CORP CENTRAL INDEX KEY: 0000357019 STANDARD INDUSTRIAL CLASSIFICATION: FINANCE SERVICES [6199] IRS NUMBER: 941661392 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08319 FILM NUMBER: 95563098 BUSINESS ADDRESS: STREET 1: FOUR EMBARCADERO CTR SUITE 2200 CITY: SAN FRANCISCO STATE: CA ZIP: 94111 BUSINESS PHONE: 4159553200 FORMER COMPANY: FORMER CONFORMED NAME: GATX LEASING CORP DATE OF NAME CHANGE: 19900405 10-Q 1 JUNE 30, 1995 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10Q X QUARTERLY REPORT PURSUANT TO SECTION 13 OR _____ 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR _____ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarter Ended Commission File Number June 30, 1995 1-8319 Incorporated in the IRS Employer Identification Number State of Delaware 94-1661392 Four Embarcadero Center San Francisco, CA 94111 (415) 955-3200 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 and (2) has been subject to such filing requirements for the past 90 days. Yes X NO ____ ____ All Common Stock of Registrant is held by GATX Financial Services, Inc. (a wholly-owned subsidiary of GATX Corporation). As of July 31, 1995, Registrant has outstanding 1,031,250 shares of $1 par value Common Stock. THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND (b) OF FORM 10Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT. PART I. FINANCIAL INFORMATION Item 1. Financial Statements
GATX CAPITAL CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND REINVESTED EARNINGS (in Thousands) Three Months Ended Six Months Ended June 30, June 30, 1995 1994 1995 1994 ______ ______ ______ ______ (Unaudited) (Unaudited) Earned income: Leases $32,740 $ 36,940 $ 67,111 $ 73,253 Gain on sale of assets 14,199 2,805 24,088 6,797 Fees 2,819 1,203 10,153 4,941 Interest 6,420 6,167 12,349 11,434 Investment in joint ventures 4,073 1,981 7,185 3,192 Other 881 871 1,339 1,713 -------- -------- -------- ------- 61,132 49,967 122,225 101,330 -------- -------- -------- ------- Expenses: Interest 16,623 15,637 33,068 30,744 Operating leases 11,309 11,557 23,283 23,178 Selling, general and administrative 10,713 9,233 20,313 17,749 Provision for losses on investments 3,000 4,000 9,000 10,000 Other 150 243 314 401 -------- -------- -------- ------- 41,795 40,670 85,978 82,072 -------- -------- -------- ------- INCOME BEFORE INCOME TAXES 19,337 9,297 36,247 19,258 -------- -------- -------- ------- Income taxes: Current income tax expense 7,145 4,213 13,437 8,466 Deferred income tax expense (benefit) 686 (447) 1,243 (666) -------- -------- -------- ------- 7,831 3,766 14,680 7,800 -------- -------- -------- ------- NET INCOME 11,506 5,531 21,567 11,458 Reinvested earnings at beginning of period 152,321 136,845 146,036 133,570 Dividends paid to stockholder (3,776) (2,651) (7,552) (5,303) -------- -------- -------- ------- REINVESTED EARNINGS AT END OF PERIOD $160,051 $139,725 $160,051 $139,725 ======== ======== ======== ========
GATX CAPITAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in Thousands) June 30, December 31, 1995 1994 -------- ------------ (Unaudited) ASSETS Cash and cash equivalents $ 19,739 $ 9,407 Investments: Direct financing leases 255,596 245,441 Leveraged leases 239,613 252,651 Operating lease equipment - net of depreciation 269,545 295,273 Secured loans 231,769 231,225 Investment in joint ventures 207,009 202,367 Assets held for sale or lease 29,065 24,320 Other investments 43,270 20,373 Investment in future residuals 13,826 13,157 Less: Allowance for losses on investments (90,258) (82,206) ---------- --------- Total investments 1,199,435 1,202,601 Due from GATX Corporation 39,241 42,515 Other assets 13,860 15,067 ---------- ---------- TOTAL ASSETS $1,272,275 $1,269,590 ========== ==========
GATX CAPITAL CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in Thousands)
June 30, December 31, 1995 1994 --------- ----------- (Unaudited) LIABILITIES AND STOCKHOLDER'S EQUITY Accrued interest $ 14,849 $ 14,987 Accounts payable and other liabilities 54,448 108,635 Debt financing: Commercial paper and bankers' acceptances 149,850 124,834 Notes payable 14,695 14,021 Obligations under capital leases 17,020 19,431 Senior term notes 630,600 613,600 -------- -------- Total debt financing 812,165 771,886 -------- -------- Nonrecourse obligations 54,744 55,270 Deferred income 4,234 4,185 Deferred income taxes 16,583 15,390 Stockholder's equity: Convertible preferred stock 1,027 1,027 Common stock 1,031 1,031 Additional paid-in capital 151,902 151,902 Reinvested earnings 160,051 146,036 Equity adjustment from foreign currency translation 1,241 (759) -------- -------- Total stockholder's equity 315,252 299,237 -------- -------- TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $1,272,275 $1,269,590 ========== ==========
GATX CAPITAL CORPORATION AND SUBSIDIARIES STATEMENTS OF CONSOLIDATED CASH FLOWS (in Thousands) Six Months Ended June 30, 1995 1994 ------ ------ (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 21,567 $11,458 Reconciliation to net cash from operating activities: Provision for possible losses 9,000 10,000 Depreciation expense 13,820 14,898 Provision for deferred income taxes (benefits) 1,243 (666) Gain on sale of assets (24,088) (6,797) Joint venture investment income (7,185) (3,192) Changes in assets and liabilities: Due from GATX Corporation 3,274 (588) Accrued interest and other payables (54,325) 50,077 Deferred income 49 (47,933) Other - net 2,638 (1,575) -------- -------- Net cash flows (used in) provided by operating activities (34,007) 25,682 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Investments in leased equipment, net of nonrecourse borrowings for leveraged leases (124,027) (105,531) Loans extended to borrowers (45,557) (45,759) Other investments (17,398) (790) -------- -------- Total investments (186,982) (152,080) -------- -------- Lease rents received, net of earned income and leveraged lease nonrecourse debt service 33,783 7,883 Loan principal received 34,093 18,824 Proceeds from disposition of equipment 112,795 35,434 Proceeds from disposition of real estate 1,727 7,012 Joint venture investment recovery 10,273 11,352 -------- ------- Recovery of investments 192,671 80,505 -------- ------- Net cash flows provided by (used in) investing activities 5,689 (71,575) -------- ------- CASH FLOWS FROM FINANCING ACTIVITIES Net increase in short term borrowings 25,690 57,362 Proceeds from issuance of long-term debt 80,000 55,000 Repayment of long term debt (63,000) (56,250) Dividends paid to stockholder (7,552) (5,303) Other financing activities 3,512 (3,925) -------- ------- Net cash flows provided by financing activities 38,650 46,884 -------- ------- Net increase in cash and cash equivalents 10,332 991 Cash and cash equivalents at the beginning of the period 9,407 12,950 -------- ------- Cash and cash equivalents at the end of the period $ 19,739 $ 13,941 ========= =========
PART I. FINANCIAL INFORMATION Item 1. Financial Statements, continued NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 1995 and 1994 The consolidated balance sheet of GATX Capital Corporation (the "Company") at December 31, 1994 was derived from the audited financial statements at that date. All other consolidated financial statements are unaudited and include all adjustments, consisting only of normal recurring items, which management considers necessary for a fair statement of the consolidated results of operations and financial position for and as of the end of the indicated periods. Operating results for the six-month period ended June 30, 1995 are not necessarily indicative of the results that may be achieved for the entire year. Item 2. Management's Discussion and Analysis Comparison of the Six Months Ended June 30, 1995 to the Six Months Ended June 30,1994 GATX Capital Corporation's net income for the six months ended June 30, 1995, was $10.1 million higher than for the comparable 1994 period. The increase in earned income of $20.9 million, compared to the 1994 period, is largely the result of the remarketing of assets. These gains, which are realized both at lease end and in response to market opportunities, do not occur evenly between periods and are not expected to be at as high a level in the second half of 1995. Also contributing to the overall change in earned income from 1994 to 1995 was higher fee income, primarily from the remarketing of managed assets. Income from joint ventures increased significantly as well, mainly due to higher interest rates on variable rate leases in an international aircraft joint venture. Lower income from leases partially offset the growth described above. Lease income in 1994 included rentals on four DC-10 aircraft which were returned in January 1995 and have not yet been re-leased. The Company also sold interests in certain other aircraft, further reducing its 1995 lease income. Expenses grew by $3.9 million, or 5%, between periods. The growth in interest expense was due to higher interest rates, partially offset by lower levels of debt financing. Spending in support of continued business growth resulted in increased selling, general and administrative expenses between periods, particularly in such areas as human resources and information systems. The decrease in accounts payable and other liabilities since the end of 1994 included a $48.0 million refund of a deposit in the first quarter of 1995 as the result of a lessee's exercise of an option to return four DC-10 aircraft. Floating rate debt financing represented 32.9% of the Company's capital structure at June 30, 1995. These borrowings support leases and loans tied to LIBOR or similar rates. At June 30, 1995, the Company had $30.0 million more floating rate debt than floating rate assets. At June 30, 1995, the Company had $258.0 million of transactions which had been approved but not yet funded. Of this amount, the Company expects to fund approximately $100 million during 1995 and the remainder, beyond. The Company generates cash from operations and from portfolio proceeds and has certain facilities for borrowing. At June 30, 1995, the Company had a $300.0 million shelf registration for Series C medium term notes, of which $135.0 million had been issued. The Company also had unused capacity under its credit agreements of $100.1 million as of June 30, 1995. Part II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K The Company filed no reports on Form 8-K during the three months ended June 30, 1995. Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. GATX CAPITAL CORPORATION /s/ Michael E. Cromar -------------------------------- Vice President & Chief Financial Officer /s/ Curt F. Glenn --------------------------------- Principal Accounting Officer and Vice President & Controller August 14, 1995 EX-27 2 WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 1000 QTR-2 DEC-31-1995 JAN-01-1995 JUN-30-1995 19739 0 726978 90258 29065 0 269545 0 1272275 0 702364 1031 0 1027 313194 1272275 0 122225 0 0 43910 9000 33068 36247 14680 0 0 0 0 21567 0 0 CONSISTS OF DIRECT FINANCE LEASE RECEIVABLES OF 255596, LEVERAGED LEASE RECEIVABLES OF 239613, AND SECURED LOANS OF 231769. CONSISTS OF ASSETS HELD FOR SALE OR LEASE. CONSISTS OF COST OF EQUIPMENT LEASED TO OTHERS UNDER OPERATING LEASES, NET OF DEPRECIATION. GATX CAPITAL CORPORATION HAS AN UNCLASSIFIED BALANCE SHEET. CONSISTS OF SENIOR TERM NOTES OF 630600, OBLIGATIONS UNDER CAPITAL LEASES OF 17020, AND NONRECOURSE OBLIGATIONS OF 54744. PAR VALUE ONLY. CONSISTS OF RETAINED EARNINGS OF 160051, ADDITIONAL PAID-IN CAPITAL OF 151902 AND TRANSLATION ADJUSTMENT OF 1241. CONSISTS OF OPERATING LEASE EXPENSE OF 23283, SELLING, GENERAL AND ADMINISTRATIVE EXPENSES OF 20313, AND OTHER EXPENSES OF 314.