Fair Value Disclosure

6 Months Ended

Jun. 30, 2011

Fair Value Disclosures [Abstract]

Fair Value Disclosure

NOTE 4. Fair Value Disclosure

          The following tables set forth GATX’s assets and liabilities measured at fair value on a recurring basis (in millions):

			Quoted Prices in
			Active Markets		Significant		Significant
			for Identical		Observable		Unobservable
	June 30,		Assets		Inputs		Inputs
	2011		(Level 1)		(Level 2)		(Level 3)
Assets
Interest rate derivatives (a)	$	16.9	$	—	$	16.9	$	—
Foreign exchange rate derivatives (b)		0.1		—		0.1		—
Available for sale equity securities		3.7		3.7		—		—
Liabilities
Interest rate derivatives (a)		3.4		—		3.4		—
Foreign exchange rate derivatives (b)		0.5		—		0.5		—
			Quoted Prices in
			Active Markets		Significant		Significant
			for Identical		Observable		Unobservable
	December 31,		Assets		Inputs		Inputs
	2010		(Level 1)		(Level 2)		(Level 3)
Assets
Interest rate derivatives (a)	$	17.6	$	—	$	17.6	$	—
Available for sale equity securities		4.3		4.3		—		—
Liabilities
Interest rate derivatives (a)		4.6		—		4.6		—
Foreign exchange rate derivatives (b)		0.5		—		0.5		—

(a)	Designated as hedges
(b)	Not designated as hedges

          Available for sale equity securities are valued based on quoted prices in an active exchange market. Derivative contracts are valued using a pricing model with inputs (such as yield curves and credit spreads) that are observable in the market or can be derived principally from or corroborated by observable market data.

          The following tables set forth certain disclosures relating to GATX’s non-recurring Level 3 fair value measurements (in millions):

	Fair Value		Carrying		Impairment
Six months ended June 30	of Assets		Value of Assets		Losses
2011	$	2.2	$	3.4	$	1.2
2010		3.5		8.9		5.4

	Fair Value		Carrying		Impairment
Three months ended June 30	of Assets		Value of Assets		Losses
2011	$	1.5	$	2.1	$	0.6
2010		0.5		1.1		0.6

          For the first six months and second quarter of 2011, impairment losses of $1.2 million and $0.6 million, respectively, primarily related to scrapped wheelsets in Rail’s European fleet. For the first six months and second quarter of 2010, impairment losses of $0.6 million related to scrapped wheelsets in Rail’s European fleet. Also in the first six months of 2010, impairment losses of $4.8 million related to an industry-wide, regulatory mandate issued by the Association of American Railroads that resulted in a significant decrease to the expected economic life of 358 aluminum hopper railcars. In each case, the fair value was determined using discounted cash flow methodologies and third-party appraisal data, as applicable.

Derivative instruments

          GATX recognizes all derivative instruments at fair value and classifies them on the balance sheet as either other assets or other liabilities. Classification of derivative activity in the statements of income and cash flows is generally determined by the nature of the hedged item. Gains and losses on derivatives that are not accounted for as hedges are classified as other operating expenses and the related cash flows are included in cash flows from operating activities. Although GATX does not hold or issue derivative financial instruments for purposes other than hedging, certain derivatives may not qualify for hedge accounting. Changes in the fair value of these derivatives are recognized in earnings immediately.

          Fair Value Hedges — GATX uses interest rate swaps to convert fixed rate debt to floating rate debt and to manage the fixed to floating rate mix of its debt obligations. For fair value hedges, changes in fair value of both the derivative and the hedged item are recognized in earnings as interest expense. As of June 30, 2011 and December 31, 2010, GATX had three instruments outstanding with an aggregate notional amount of $350.0 million for each period. As of June 30, 2011, these derivatives had maturities ranging from 2012-2015.

          Cash Flow Hedges — GATX uses interest rate swaps to convert floating rate debt to fixed rate debt and to manage the fixed to floating rate mix of its debt obligations. GATX also uses interest rate swaps and Treasury rate locks to hedge its exposure to interest rate risk on existing and anticipated transactions. As of June 30, 2011 and December 31, 2010, GATX had 12 instruments and 13 instruments outstanding, respectively, with an aggregate notional amount of $78.8 million and $130.4 million, respectively. As of June 30, 2011, these derivatives had maturities ranging from 2011-2015. Within the next 12 months, GATX expects to reclassify $7.1 million ($4.5 million after-tax) of net losses on previously terminated derivatives from accumulated other comprehensive income (loss) to earnings. Amounts are reclassified when interest and operating expense related to the hedged risks affect earnings.

          Certain of GATX’s derivative instruments contain credit risk provisions that could require GATX to make immediate payment on net liability positions in the event that GATX defaulted on certain outstanding debt obligations. The aggregate fair value of all derivative instruments with credit risk related contingent features that are in a liability position as of June 30, 2011 was $3.4 million. GATX is not required to post any collateral on its derivative instruments and does not expect the credit risk provisions to be triggered.

          In the event that a counterparty fails to meet the terms of the interest rate swap agreement or a foreign exchange contract, GATX’s exposure is limited to the fair value of the swap if in GATX’s favor. GATX manages the credit risk of counterparties by transacting only with institutions that the Company considers financially sound and by avoiding concentrations of risk with a single counterparty. GATX considers the risk of non-performance by a counterparty to be remote.

          The income statement and other comprehensive income (loss) impacts of GATX’s derivative instruments were (in millions):

		Three Months Ended						Six Months Ended
Derivative		June 30						June 30
Designation	Location of Gain (Loss) Recognized	2011			2010			2011			2010
Fair value hedges (a)	Interest expense	$	1.4		$	5.2		$	(0.7	)	$	7.7
Cash flow hedges	Amount recognized in other comprehensive (loss) income (effective portion)		(6.9	)		(4.8	)		(5.9	)		(8.2	)
Cash flow hedges	Amount reclassified from accumulated other comprehensive loss to interest expense (effective portion)		(2.0	)		(1.9	)		(3.9	)		(3.7	)
Cash flow hedges	Amount reclassified from accumulated other comprehensive loss to operating lease expense (effective portion)		(0.4	)		(0.4	)		(0.8	)		(0.8	)
Cash flow hedges	Amount recognized in other expense (ineffective portion)		—			(0.1	)		—			(0.1	)

(a) Equally offsetting the amount recognized in interest expense was the fair value adjustment relating to the underlying debt.

Other Financial Instruments

          The carrying amounts of cash and cash equivalents, restricted cash, money market funds, rent and other receivables, accounts payable, commercial paper and bank credit facilities approximate fair value due to the short maturity of those instruments. The fair values of investment funds were based on the best information available and may include quoted investment fund values. The fair values of loans and fixed and floating rate debt were estimated based on discounted cash flow analyses using interest rates representative of loans with similar terms to borrowers of comparable credit quality. The following table sets forth the carrying amounts and fair values of GATX’s other financial instruments as of (in millions):

	June 30, 2011				December 31, 2010
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
Assets
Investment Funds	$	4.6	$	8.7	$	6.8	$	10.2
Loans		19.2		19.2		0.5		0.5
Liabilities
Recourse fixed rate debt	$	2,535.0	$	2,694.2	$	2,459.3	$	2,615.9
Recourse floating rate debt		455.1		455.1		342.5		341.5
Nonrecourse debt		189.8		203.5		217.2		233.0