8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): November 30, 2006

GATX Corporation

(Exact name of registrant as specified in its charter)

New York
(State or other jurisdiction of
incorporation) 1-2328
(Commission File
Number) 36-1124040
(IRS Employer
Identification No.)

500 West Monroe Street
Chicago, Illinois 60661-3676
(Address of principal executive offices, including zip code)

(312) 621-6200
Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the obligation of the registrant under any of the following provisions:

o Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01 Completion of Acquisition or Disposition of Assets.

     On November 30, 2006, GATX Corporation (“GATX” or the “Company”) completed the sale of its wholly owned aircraft to Macquarie Aircraft Leasing Limited (“MALL”), a consortium of investors led by Macquarie Bank Limited, for cash proceeds of approximately $1.1 billion pursuant to the terms and conditions of the Sale and Purchase Agreement dated September 28, 2006. The sales of GATX’s interests in its 11 aircraft leasing affiliates to MALL are expected to be completed by year end.

Item 9.01 Financial Statements and Exhibits

     The completion of the entire MALL and previously disclosed AerCap Group transactions will result in the disposition of substantially all of the operations of GATX’s Air segment. GATX deems the completion of these sales to be probable and in accordance with Article 11 of Regulation S-X, pro forma financial information illustrating the effects of the sales on GATX’s financial position as of September 30, 2006, and on the results of its operations for the years ended December 31, 2005, 2004, and 2003 is filed with this Report as Exhibit 99.1.

     (b) Pro forma financial information

     (c) Exhibits

2. Sale and Purchase Agreement dated as of September 28, 2006, between GATX Financial Corporation and Macquarie Aircraft Leasing Limited.

99.1 Pro Forma Financial Information

SIGNATURE

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 FINANCIAL CORPORATION

(Registrant)

/s/ Robert C. Lyons  

Robert C. Lyons

Vice-President, Chief Financial Officer
(Duly Authorized Officer)

Date:  December 6, 2006

EXHIBIT INDEX

Exhibit No.	Exhibit Description	Method of Filing
2.	Sale and Purchase Agreement dated as of September 28, 2006, between GATX Financial Corporation and Macquarie Aircraft Leasing Limited incorporated herein by reference to Exhibit 10. to GATX Corporation Form 10-Q dated November 2, 2006.	Incorporated by reference
99.1	GATX Corporation pro forma condensed consolidated balance sheet at June 30, 2006, and pro forma condensed consolidated statements of income for the years ended December 31, 2005, 2004, and 2003.	Electronically

EX-99.1

Exhibit 99.1

Pro Forma Financial Information

     GATX Corporation (“GATX” or the “Company”) is headquartered in Chicago, Illinois and provides services primarily through three operating segments: GATX Rail (“Rail”), GATX Air (“Air”) and GATX Specialty (“Specialty”). During 2006, GATX announced agreements to sell certain Air assets and operations to Macquarie Aircraft Leasing Limited (“MALL”) and AerCap Group (“AerCap”) and sold its interest in its Pembroke affiliate. These operations and assets comprise substantially all of the Air business.

     As of September 30, 2006, the sales of certain wholly owned and affiliated aircraft to AerCap and Air’s interest in its Pembroke affiliate were completed. Subsequently, Air completed the sale to MALL of its wholly owned aircraft and the sale to AerCap of certain additional wholly owned and affiliated aircraft. The sale of Air’s interests in its 11 aircraft leasing affiliates to MALL and the sale of eight affiliated aircraft to AerCap are expected to be completed by year end.

     The accompanying pro forma condensed consolidated financial statements reflect the financial position and results of operations of GATX after giving effect to the completion of the sales of substantially all of Air’s operations. These pro forma statements have been prepared by the Company based on the assumptions identified in the related footnotes and are shown for comparative purposes only. The pro forma statements do not purport to represent what the actual consolidated results of operations or consolidated financial position of GATX would have been had the dispositions occurred on the dates assumed, nor are they necessarily indicative of future consolidated results of operations or consolidated financial position. Also, if any of the remaining sales are not completed or are completed in a manner different from GATX’s current expectations, pro forma results will vary. The pro forma condensed consolidated financial statements should be read in conjunction with GATX’s historical consolidated financial statements and accompanying footnotes.

GATX CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
September 30, 2006
(In Millions)

				Pro-Forma			Pro-Forma
	As Reported			Adjustments			GATX
Assets
Cash and Cash Equivalents	$	90.5		$	736.5	(2g)	$	827.0
Restricted Cash		57.5			—			57.5
Receivables
Rent and other receivables		93.6			—			93.6
Finance leases		361.9			—			361.9
Loans		23.1			—			23.1
Allowance for possible losses		(11.2	)		—			(11.2	)
		467.4			—			467.4
Operating Lease Assets, Facilities and Other
Rail		4,201.4			—			4,201.4
Specialty		104.0			—			104.0
Other		361.3			—			361.3
Allowance for depreciation		(1,781.5	)		—			(1,781.5	)
		2,885.2			—			2,885.2
Investments in Affiliated Companies		310.5			—			310.5
Goodwill		91.2			—			91.2
Other Assets		271.4			—			271.4
Assets of Discontinued Operations		1,561.9			(1,561.9	)(2a)		—
Total Assets	$	5,735.6		$	(825.4	)	$	4,910.2
Liabilities and Shareholders’ Equity
Accounts Payable and Accrued Expenses	$	162.5		$	—		$	162.5
Debt
Commercial paper and bank credit facilities		285.9			—			285.9
Recourse		2,872.4			(692.8	)(2b)		2,179.6
Nonrecourse		3.8			—			3.8
Capital lease obligations		52.5			—			52.5
		3,214.6			(692.8	)		2,521.8
Current Income Taxes		—			91.0	(2c)		91.0
Deferred Income Taxes		753.0			(89.0	)(2d)		664.0
Other Liabilities		345.0			(7.5	)(2e)		337.5
Liabilities of Discontinued Operations		131.0			(131.0	)(2a)		—
Total Liabilities		4,606.1			(829.3	)		3,776.8
Total Shareholders’ Equity		1,129.5			3.9	(2f)		1,133.4
Total Liabilities and Shareholders’ Equity	$	5,735.6		$	(825.4	)	$	4,910.2

The accompanying notes are an integral part of the pro forma financial information presented.

GATX CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2005
(In Millions)

				Pro-Forma			Pro-Forma
	As Reported			Adjustments			GATX
Gross Income
Lease income	$	878.4		$	(117.6	)(3a)	$	760.8
Marine operating revenue		138.3			—			138.3
Interest income on loans		10.0			(0.4	)(3a)		9.6
Asset remarketing income		43.7			(2.3	)(3a)		41.4
Fees		17.7			(12.6	)(3a)		5.1
Other		75.3			(0.5	)(3a)		74.8
Revenues		1,163.4			(133.4	)		1,030.0
Share of affiliates’ (losses) earnings		(28.8	)		102.5	(3a)		73.7
Total Gross Income		1,134.6			(30.9	)		1,103.7
Ownership Costs
Depreciation		202.7			(59.8	)(3a)		142.9
Interest expense, net		164.7			(32.3	)(3a)		132.4
Operating lease expense		187.0			(7.0	)(3a)		180.0
Total Ownership Costs		554.4			(99.1	)		455.3
Other Costs and Expenses
Maintenance expense		194.9			(0.8	)(3a)		194.1
Marine operating expense		108.9			—			108.9
Selling, general and administrative		167.5			(25.9	)(3a)		141.6
Asset impairment charges		83.4			(77.2	)(3a)		6.2
Other expenses		53.3			(1.0	)(3a)		52.3
Total Other Costs and Expenses		608.0			(104.9	)		503.1
(Loss) Income from Continuing Operations before Income Taxes		(27.8	)		173.1			145.3
Income Tax (Benefit) Provision		(12.7	)		68.6	(3b)		55.9
(Loss) Income from Continuing Operations	$	(15.1	)	$	104.5		$	89.4
Per Share Data
Basic:
(Loss) income from continuing operations	$	(0.30	)				$	1.79
Average number of common shares (in thousands)		50,106						50,106
Diluted:
(Loss) income from continuing operations	$	(0.30	)				$	1.68
Average number of common shares and common share equivalents (in thousands)		50,106						61,020

The accompanying notes are an integral part of the pro forma financial information presented.

GATX CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2004
(In Millions)

			Pro-Forma			Pro-Forma
	As Reported		Adjustments			GATX
Gross Income
Lease income	$	790.3	$	(101.0	)(3a)	$	689.3
Marine operating revenue		111.8		—			111.8
Interest income on loans		17.8		(0.1	)(3a)		17.7
Asset remarketing income		36.5		(5.5	)(3a)		31.0
Fees		20.9		(9.3	)(3a)		11.6
Other		189.6		(2.6	)(3a)		187.0
Revenues		1,166.9		(118.5	)		1,048.4
Share of affiliates’ earnings		65.2		(11.1	)(3a)		54.1
Total Gross Income		1,232.1		(129.6	)		1,102.5
Ownership Costs
Depreciation		194.6		(59.5	)(3a)		135.1
Interest expense, net		162.4		(18.1	)(3a)		144.3
Operating lease expense		173.6		(3.8	)(3a)		169.8
Total Ownership Costs		530.6		(81.4	)		449.2
Other Costs and Expenses
Maintenance expense		189.2		(1.6	)(3a)		187.6
Marine operating expense		87.7		—			87.7
Selling, general and administrative		163.3		(21.5	)(3a)		141.8
Asset impairment charges		3.4		(0.4	)(3a)		3.0
Other expenses		31.2		(1.8	)(3a)		29.4
Total Other Costs and Expenses		474.8		(25.3	)		449.5
Income from Continuing Operations before Income Taxes		226.7		(22.9	)		203.8
Income Taxes		68.2		(9.1	)(3b)		59.1
Income from Continuing Operations	$	158.5	$	(13.8	)	$	144.7
Per Share Data
Basic:
Income from continuing operations	$	3.21				$	2.93
Average number of common shares (in thousands)		49,348					49,348
Diluted:
Income from continuing operations	$	2.86				$	2.63
Average number of common shares and common share equivalents (in thousands)		60,082					60,082

The accompanying notes are an integral part of the pro forma financial information presented.

GATX CORPORATION AND SUBSIDIARIES
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2003
(In Millions)

			Pro-Forma			Pro-Forma
	As Reported		Adjustments(3a)			GATX
Gross Income
Lease income	$	762.2	$	(90.8	)	$	671.4
Marine operating revenue		85.0		—			85.0
Interest income on loans		41.4		0.2			41.6
Asset remarketing income		37.9		(0.8	)		37.1
Fees		18.0		(7.4	)		10.6
Other		76.3		(3.3	)		73.0
Revenues		1,020.8		(102.1	)		918.7
Share of affiliates’ earnings		66.8		(17.6	)		49.2
Total Gross Income		1,087.6		(119.7	)		967.9
Ownership Costs
Depreciation		188.0		(55.1	)		132.9
Interest expense, net		175.4		(15.0	)		160.4
Operating lease expense		176.0		(3.9	)		172.1
Total Ownership Costs		539.4		(74.0	)		465.4
Other Costs and Expenses
Maintenance expense		166.0		(1.5	)		164.5
Marine operating expense		68.9		—			68.9
Selling, general and administrative		163.6		(18.1	)		145.5
Asset impairment charges		24.6		(2.4	)		22.2
Other expenses		47.2		(8.8	)		38.4
Total Other Costs and Expenses		470.3		(30.8	)		439.5
Income from Continuing Operations before Income Taxes		77.9		(14.9	)		63.0
Income Taxes		16.2		(6.6	)(3b)		9.6
Income from Continuing Operations	$	61.7	$	(8.3	)	$	53.4
Per Share Data
Basic:
Income from continuing operations	$	1.26				$	1.09
Average number of common shares (in thousands)		49,107					49,107
Diluted:
Income from continuing operations	$	1.24				$	1.07
Average number of common shares and common share equivalents (in thousands)		51,203					51,203

The accompanying notes are an integral part of the pro forma financial information presented.

GATX CORPORATION AND SUBSIDIARIES
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

NOTE 1.     Basis of Presentation

     The pro forma condensed consolidated balance sheet of GATX as of September 30, 2006, gives effect to the dispositions of all the assets and liabilities of the Air discontinued operations, representing the net assets of the Air segment remaining as of that date, the repayment of related external debt and the termination of related derivatives. The pro forma condensed consolidated balance sheet assumes the dispositions occurred as of the balance sheet date. The pro forma condensed consolidated statements of income of GATX for the years ended December 31, 2005, 2004, and 2003 assume the sales of substantially all of Air’s historical operations, comprising those sold through November 30, 2006, and those expected to be sold prior to year end, occurred on January 1 of each period presented. The financial results of the Air Segment were reported as discontinued operations for the period ended September 30, 2006. As a result, a pro forma condensed consolidated statement of income for the period ended September 30, 2006 is not required to be filed. In the opinion of management, these financial statements include all material adjustments necessary to reflect, on a pro forma basis, the impact of the sales on the historical financial information of GATX. The pro forma condensed consolidated financial statements do not necessarily represent what GATX’s financial position or results of operations would have been had the sales occurred on such dates or project GATX’s financial position or results of operations at or for any future date or period. The pro forma condensed consolidated financial statements should be read in conjunction with the historical consolidated financial statements of GATX.

NOTE 2.     Pro Forma Condensed Consolidated Balance Sheet Adjustments

     The pro forma condensed consolidated balance sheet assumes that substantially all of the assets and operations of Air that were remaining as of September 30, 2006, were sold on that date. The determination of the final proceeds from these sales will be dependent on the timing and/or completion of the sales and the resolution of potential purchase price adjustments. Thus, actual amounts may vary from these pro forma adjustments.

(a) Represents the assets and liabilities of Air to be sold, transferred and/or settled as part of the transactions.

(b) Represents indebtedness directly related to Air assets that was repaid out of sales proceeds.

(c) Represents the reclassification from deferred income taxes to current income taxes associated with the Air transaction. The Company anticipates that the tax impact of the dispositions completed and expected to be completed in 2006 will fully utilize its existing net operating loss and tax credit carry forwards, resulting in a current income tax payable of approximately $91 million. GATX’s actual income tax payable for the year ended December 31, 2006, may vary depending on the completion of the transactions and the impact of GATX’s continuing operations on consolidated taxable income.

(d) Represents the reclassification of $91 million from deferred income taxes to current income taxes net of estimated income taxes of $2.0 million on the remaining gain expected to be recognized upon completion of the Air transactions.

(e) Represents the settlement of $1.8 million of Air related derivatives and payments of $5.7 million of accrued transaction costs consisting of commissions, legal fees, accounting and other disposal expenses.

(f) Represents an estimate of the remaining after tax gain to be recognized upon completion of the Air transactions.

(g) The estimated net cash proceeds resulting from the sale of Air are shown below (in millions):

	MALL			AerCap			Total
Estimated cash proceeds	$	1,300.4		$	136.4		$	1,436.8
Estimated debt repayments		(692.8	)		—			(692.8	)
Estimated liability repayments		(7.3	)		(0.2	)		(7.5	)
Estimated net proceeds	$	600.3		$	136.2		$	736.5

NOTE 3.     Pro Forma Condensed Consolidated Statements of Income Adjustments

     The pro forma condensed consolidated statements of income assume that the sale of Air occurred as of January 1 of each period presented. Actual amounts could vary from these pro forma adjustments.

(a) The pro forma adjustments reflect the elimination of actual income and expenses during the periods presented related to the assets and operations sold through November 30, 2006 and those expected to be sold prior to year end. Additionally, the adjustments reflect the elimination of actual interest costs incurred during the periods presented, associated with the debt secured by certain Air assets that was subsequently repaid with the proceeds from the sales.

(b) The pro forma adjustment for income taxes is based on an estimate of Air’s relative contribution to GATX’s consolidated tax position and approximates Air's tax provision on a stand alone basis.