10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-K

þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 31, 2007
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-2328

GATX Corporation

(Exact name of registrant as specified in its charter)

New York	36-1124040
(State of incorporation)	(I.R.S. Employer Identification No.)

500 West Monroe Street

Chicago, IL 60661-3676

(Address of principal executive offices, including zip code)

(312) 621-6200

(Registrant’s telephone number, including area code)

Securities Registered Pursuant to Section 12(b) of the Act:

	Name of each exchange
Title of each class or series	on which registered
Common Stock	New York Stock Exchange Chicago Stock Exchange
$2.50 Cumulative Convertible Preferred Stock, Series A	New York Stock Exchange Chicago Stock Exchange
$2.50 Cumulative Convertible Preferred Stock, Series B	New York Stock Exchange Chicago Stock Exchange

Securities Registered Pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes þ     No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.  Yes o     No þ

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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ     No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ Accelerated filer o Non-accelerated filer o
(Do not check if a smaller reporting company) Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o     No þ

The aggregate market value of the voting stock held by non-affiliates of the registrant was approximately $2.4 billion as of June 30, 2007.

As of January 31, 2008, 47.9 million common shares were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

GATX’s definitive Proxy Statement to be filed on or about March 14, 2008 PART III

GATX CORPORATION

2007 FORM 10-K

INDEX

Item No.		Page No.
Part I
Item 1.	Business		2
	General		2
	Business Segments		2
	Rail		2
	Specialty		5
	ASC		6
	Trademarks, Patents and Research Activities		7
	Seasonal Nature of Business		7
	Customer Base		7
	Employees		7
	Environmental Matters		8
	Available Information		8
Item 1A.	Risk Factors		8
Item 1B.	Unresolved Staff Comments		12
Item 2.	Properties		12
Item 3.	Legal Proceedings		13
Item 4.	Submission of Matters to a Vote of Security Holders		13
	Executive Officers of the Registrant		13
Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		15
Item 6.	Selected Financial Data		17
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		18
	Discussion of Operating Results		19
	Comparison of Year ended December 31, 2007 to year ended December 31, 2006 and Year ended December 31, 2006 to year ended December 31, 2005		22
	Balance Sheet Discussion		31
	Cash Flow Discussion		33
	Liquidity and Capital Resources		34
	Critical Accounting Policies and Estimates		39
	New Accounting Pronouncements		41
	Non-GAAP Financial Measures		41
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk		43
Item 8.	Financial Statements and Supplementary Data		44
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure		97
Item 9A.	Controls and Procedures		97
Item 9B.	Other Information		99
Part III
Item 10.	Directors, Executive Officers and Corporate Governance		99
Item 11.	Executive Compensation		99
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters		99
Item 13.	Certain Relationships and Related Transactions, and Director Independence		100
Item 14.	Principal Accounting Fees and Services		100
Part IV
Item 15.	Exhibits, Financial Statement Schedules		100
	Signatures.		101
	Exhibits		102
Indenture
Amendment to Executive Deferred Income Plan Participation Agreements
Amendment to 1995 Long-Term Incentive Compensation Plan
Amendment to 2004 Equity Incentive Compensation Plan
Amendment to Cash Incentive Compensation Plan
Amendment to Directors' Phantom Stock Plan
Amended and Restated Directors' Voluntary Deferred Fee Plan
Statement Regarding Computation of Ratios of Earnings to Combined Fixed Charges and Preferred Stock Dividends
Subsidiaries of the Registrant
Consent of Ernst & Young LLP
Powers of Attorney
CEO Certification
CFO Certification
Section 1350 CEO and CFO Certification

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Item 1.   Business

GENERAL

GATX Corporation (“GATX” or the “Company”) leases, operates and manages long-lived, widely used assets in the rail, marine and industrial equipment markets. GATX also invests in joint ventures that complement existing business activities. Headquartered in Chicago, Illinois, GATX has three financial reporting segments: Rail, Specialty and American Steamship Company (“ASC”).

At December 31, 2007, GATX had balance sheet assets of $4.7 billion, comprised largely of railcars, marine vessels and joint venture investments. GATX also utilized approximately $1.2 billion of assets, primarily railcars, which were leased-in under operating leases and therefore were not recorded on the balance sheet.

In 2006, GATX entered into an agreement to sell the majority of its aircraft leasing business to Macquarie Aircraft Leasing Limited (“MALL”). The sale was completed in two stages: the sale of wholly owned aircraft closed on November 30, 2006, and the sale of partnered aircraft closed on January 17, 2007. Separately in 2006, GATX sold 26 wholly owned and partnered aircraft and its interest in Pembroke Group, a 50% owned aircraft leasing affiliate. These events resulted in the complete sale and disposition of GATX’s aircraft leasing operation (formerly the “Air” segment). Accordingly, Air has been segregated and classified as discontinued operations for all periods presented.

See discussion in Note 24 to the consolidated financial statements for additional details regarding foreign operations and see Note 25 to the consolidated financial statements for details regarding each segment’s operating results.

BUSINESS SEGMENTS

Rail

Rail is principally engaged in leasing tank and freight railcars and locomotives in North America and Europe. At December 31, 2007, Rail had total assets of $5.0 billion, including $1.2 billion of off balance sheet assets. Rail’s railcar leasing customers are comprised primarily of shippers of chemical, petroleum and food products as well as railroads. Rail’s locomotive leasing customers are primarily Class I, regional and short-line railroads and industrial users. Worldwide, Rail provides more than 130 railcar types used to ship over 600 different commodities.

As of December 31, 2007, Rail’s worldwide fleet, comprised of wholly owned and leased-in railcars, totaled approximately 132,000 railcars. These cars have depreciable lives of 30 to 38 years and an average age of approximately 16 years in North America and 24 years in Europe. Rail also had an ownership interest in approximately 28,300 railcars worldwide through investments in affiliated companies, including 5,700 railcars in North America and 22,500 railcars in Europe. Affiliate fleets consist primarily of freight and intermodal railcars.

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In addition, Rail manages approximately 4,500 railcars for third party owners. The following table sets forth Rail’s fleet data as of December 31, 2007:

	Tank		Freight				Affiliate
	Railcars		Railcars		Total Fleet		Railcars		Total Railcars		Locomotives
North America		61,695		50,750		112,445		5,739		118,184		615
Europe		19,209		226		19,435		22,523		41,958		—
		80,904		50,976		131,880		28,262		160,142		615

In North America, Rail purchases new railcars from a number of manufacturers, including Trinity Industries, Union Tank Car Company, American Railcar Industries, Inc., FreightCar America, National Steel Car Ltd. and The Greenbrier Companies. In 2002, Rail entered into agreements with Trinity Industries and Union Tank Car Company for the purchase of 5,000 and 2,500 newly manufactured railcars, respectively, the deliveries of which were essentially complete at December 31, 2007. During 2006, Rail signed a purchase agreement with American Railcar Industries, Inc. to acquire up to 4,000 newly manufactured railcars to be delivered through 2011. In December 2007, Rail agreed to purchase up to 3,000 new railcars from Trinity Industries to be delivered through 2011. In Europe, Rail acquires new railcars primarily from the IRS Group. Rail Europe also assembles a few hundred pressure tank cars each year at its Ostroda, Poland service center.

	North American Commited Purchase Agreements
	2008		2009		2010		2011		Total
Contractual railcar commitments		1,750		2,000		250		—		4,000
Optional railcar orders		—		—		1,750		1,250		3,000
		1,750		2,000		2,000		1,250		7,000

North America

At the end of 2007, there were approximately 1.4 million freight cars and 309,000 tank cars operating in North America. Rail’s freight car fleet comprised approximately 4% of all North American freight cars and Rail’s tank car fleet comprised approximately 20% of all North American tank cars. Rail’s primary competitors in North America are Union Tank Car Company, General Electric Railcar Services Corporation and various other lessors. Rail competes on the basis of customer relationships, service, price and availability of railcars.

In North America, Rail leases new railcars for terms that generally range from five to ten years. Renewals on existing leases are typically for periods ranging from five to seven years. The weighted average remaining lease term of the North American fleet was 4.5 years as of December 31, 2007. Rail primarily provides railcars pursuant to full-service leases under which it maintains the railcars, pays ad valorem taxes and insurance and provides other ancillary services. Rail also offers net leases for railcars and most of its locomotives, in which case the lessee is responsible for maintenance, insurance and taxes. Rail had approximately 1,000 customers in 2007, with no single customer accounting for more than 4% of Rail’s lease income.

Rail operates an extensive network of service facilities across North America that performs significant repair, maintenance and regulatory compliance work on the fleet. This maintenance organization is dedicated to providing customers with timely, efficient and high quality repair services. Maintenance services include interior cleaning of railcars, general repairs to car body and safety appliances, regulatory compliance work, truck repairs, including replacement of worn parts, servicing and replacing wheels, side frames and bolsters, valve maintenance repair, exterior blast and paint, and car stenciling. In addition, to the extent possible, regulatory compliance work is conducted while cars are in the service centers for customer directed repairs, thereby minimizing the number of required service events. The Rail maintenance network consists of:

•  Eight major service centers in North America. These full service facilities repair approximately 8,000 cars annually and can complete virtually any repair or modification project.

•  Six customer dedicated sites operating solely within specific customer plants. Services offered at these sites are typically tailored to the needs of the customers’ fleet.

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•  Seven “Fast Track” service centers, all operating in the United States. Fast Track service centers are smaller in size and scale than major service centers, primarily focusing on routine cleaning, repair and regulatory compliance services.

•  Nineteen mobile repair units operating from various locations in North America. These repair trucks are able to travel to many field locations and provide specific repairs and interior cleaning services, avoiding the need to otherwise shop a railcar.

Rail’s repair network is supplemented by a number of approved third party service centers that adhere to GATX’s quality standards. In certain cases, third-party repair services are utilized via fixed-capacity contracts under which GATX has secured repair capacity in advance through term contracts. In 2007, these third party service centers accounted for approximately 41% of all North American service center maintenance costs (excluding the cost of repairs performed by railroads). Including both GATX owned and third party service centers, approximately 65,000 cars (which may include multiple independent service events for the same car) were serviced in 2007.

Rail’s North American operation also includes its locomotive leasing business, which consists of the purchasing, refurbishing and leasing of four- and six-axle locomotives. As of December 31, 2007, the fleet consisted of 615 units, 82% of which are four-axle and 18% are six-axle. Additionally, Rail manages 96 locomotives for an affiliate. Prior to 2007, Rail’s locomotive fleet consisted primarily of four-axle, medium horsepower locomotives. Four-axle locomotives have not been manufactured in any material quantity since the mid-1980’s but continue to be in demand by railroads and shippers. As a result, with periodic refurbishment, the four-axle fleet is expected to continue to be marketable and yield attractive returns. In 2007, Rail acquired 99 six-axle SD60 locomotives, expanding the locomotive operating lease business to include modern, high-horsepower locomotives. Rail will continue to look for opportunities to expand its presence in the six-axle market. Locomotive lease terms vary from month-to-month to 15 years, with a weighted average lease term of six years. The locomotives in Rail’s current portfolio have remaining depreciable lives ranging from 12 to 20 years. Major competitors in the North American locomotive leasing market are Helm Financial Corporation and National Railway Equipment Corporation. Competitive factors in the market include equipment condition, availability, customer service and pricing.

Europe

In Europe, Rail’s operations consist of its wholly owned subsidiaries in Germany, Austria and Poland. Rail operates in the home countries of each of its subsidiaries and leases railcars to customers in those countries as well as most other countries in Western, Central and Eastern Europe that utilize standard gauge rail. Rail’s customer base includes petroleum refining and marketing companies, chemical manufacturing companies, and transportation, forwarding and railway companies. The railcar fleet in Europe generally has lease terms ranging from one to five years, with a weighted remaining lease term of two years as of December 31, 2007. Rail also operates two repair facilities in Europe that perform significant repairs and regulatory compliance for owned railcars. The owned service centers are supplemented by a number of third party contract repair facilities, which in 2007 accounted for approximately 49% of fleet repair costs. In Europe, Rail principally competes on the basis of customer relationships, service, price and availability of railcars. Rail’s primary competitors in Europe are VTG Aktiengesellschaft, Ermewa, TransWaggon, and CTL Logistics Group.

Rail Affiliates

Rail has two notable investments in affiliated companies: a 50% interest in Southern Capital Corporation (“SCC”) and a 37.5% interest in AAE Cargo AG (“AAE”).

SCC is a joint venture with the Kansas City Southern Railroad (“KCSR”). The SCC joint venture was formed in 1996 and controls a mix of 4,198 freight cars and 96 locomotives, all of which are on lease to KCSR.

AAE is a Switzerland-based railcar lessor that as of December 31, 2007, owns approximately 22,500 freight cars with an average age of 9 years, comprised of 12,497 intermodal cars (55.5%), 4,834 covered cars (21.5%) and 5,192 other freight type cars (23.0%). AAE’s customer base consists of various railways throughout Europe as well as private operators. Utilization of AAE’s fleet has historically been very high and stood at 99.9% as of December 31, 2007.

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Specialty

Specialty is primarily focused on providing leasing and related remarketing and asset management services in the marine and industrial equipment markets. The Specialty portfolio consists primarily of operating and direct finance lease assets; joint venture investments; loans; and interests in residual values involving a variety of underlying asset types, including marine, rail, industrial and other equipment. The portfolio provides recurring lease and interest income and periodic remarketing income primarily related to the sale of assets. At December 31, 2007, the net book value of the investments in the Specialty portfolio, including off balance sheet assets, was $521.4 million, of which approximately 47% were marine assets and 24% were industrial equipment assets.

Specialty also provides equipment residual value guarantees, which enable it to share in any asset value in excess of the guaranteed amount. As of December 31, 2007, Specialty was party to 58 such residual value guarantees that expire between 2008 and 2012. Specialty further leverages its equipment knowledge by managing portfolios of assets for third parties. The majority of these managed assets are in markets where GATX has traditionally had a high level of expertise, such as Rail and Air. Specialty generates fee income through portfolio administration and remarketing of these managed assets. As of December 31, 2007, the approximate net book value equivalent of Specialty’s managed portfolio was $378.1 million.

The following table sets forth information on Specialty’s owned and managed portfolio assets as of December 31 (in millions):

	On Balance		Off Balance				Managed
	Sheet		Sheet		Total		Assets
2007	$	515.6	$	5.8	$	521.4	$	378.1
2006		491.9		8.0		499.9		470.4
2005		455.5		11.7		467.2		555.8

The principal competitors of Specialty are captive leasing companies of equipment manufacturers, leasing subsidiaries of commercial banks and independent leasing companies. Factors that affect Specialty’s ability to compete are GATX’s relationships, equipment expertise, relative cost of funds, and the availability of other financing alternatives for our potential customers.

Specialty Affiliates

Specialty’s investments in affiliated companies primarily consist of an aircraft engine leasing joint venture and five marine joint ventures.

Rolls-Royce and Partners Finance Limited (“RRPF”) is a 50% owned joint venture with Rolls-Royce PLC, a leading manufacturer of commercial aircraft jet engines. RRPF provides short, medium and long-term spare engine leases and owns one of the largest spare engine portfolios in the industry, comprised of more than 290 aircraft

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engines of Rolls-Royce and International Aero Engine types. RRPF brings high levels of technical, financial and leasing expertise to the market. Through RRPF, Rolls-Royce was one of the first Original Equipment Manufacturers to provide dedicated, long-term, spare engine leasing options.

Cardinal Marine Investments LLC (“Cardinal Marine”) is a 50% owned marine joint venture with IMC Holdings, a subsidiary of the IMC Pan Asia Alliance Group (“IMC”). IMC is a 50 year old Singapore-based owner-operator of over 80 vessels, including chemical tankers, dry bulk carriers, multipurpose cargo and offshore oil and gas carriers. Cardinal Marine owns six chemical parcel tankers (each with 45,000 dead weight tons (“dwt”) carrying capacity) that operate under a pooling arrangement with IMC’s other vessels in support of the movement of organic and inorganic chemicals, along with vegetable and other oils, and biofuels from the Middle East Gulf to Asia, the U.S. and Europe.

Somargas Limited and Singco are each 50% owned joint ventures with IM Skaugen ASA (“Skaugen”). Skaugen is a 90 year old Norwegian Company primarily engaged in the transport of petrochemical gases and the ship to ship transfer of crude oil. Somargas owns six liquid petroleum gas/ethylene vessels (each with 8,500 — 10,000 cubic meters (“cbm”) carrying capacity) and Singco is building four liquid petroleum gas/ethylene/liquefied natural gas vessels (each with 10,000 cbm carrying capacity). The Somargas vessels operate in a 44 vessel pooling arrangement controlled by Skaugen, primarily transporting ethylene between the Middle East Gulf and Asia.

Clipper Third Limited and Clipper Fourth Limited, respectively, are 50% and 45% owned joint ventures with Clipper Group Invest Ltd. (the “Clipper Group”). The Clipper Group is a leading international shipping consortium with over 35 years of experience in the shipping business. The Clipper Group controls a modern fleet of over 250 vessels, approximately 100 of which are wholly owned. Their fleet consists of handysize, handy max and panamax dry bulk carriers (15,000 — 80,000 dwt carrying capacity), multipurpose tonnage vessels (4,000 — 17,500 dwt carrying capacity), and chemical tankers (1,500 — 20,000 dwt carrying capacity), and are capable of handling a variety of cargo types. Clipper Third owns four handysize vessels (each with 27,000 dwt carrying capacity) that support the worldwide movement of dry bulk products such as grain, cement, coal and steel. Clipper Fourth owns 14 handysize chemical parcel tankers (each with 10,000-15,000 dwt carrying capacity). These 18 vessels operate under a pooling arrangement with the Clipper Group’s fleet in support of the worldwide movement of dry bulk commodities and organic, inorganic and specialty chemicals with a concentration in the Atlantic and Mediterranean trades.

ASC

ASC operates a fleet of self-unloading marine vessels on the Great Lakes and is exclusively engaged in the waterborne transportation of dry bulk commodities. ASC’s sailing season generally runs from April 1 through December 31; however, weather conditions permitting, certain vessels may operate through mid-January of the following year.

At December 31, 2007, ASC operated a fleet of 18 vessels and had total assets of $292.0 million. Fifteen of ASC’s vessels are diesel powered vessels constructed in the 1970’s and early 1980’s, having an average age of 31 years and an estimated useful life of 50 years. These vessels range in size from approximately 635 feet to 1,000 feet long and can carry from 23,800 to 80,900 gross tons per trip. The three remaining vessels are steam powered vessels built in the 1940’s and 1950’s and have an estimated remaining useful life of ten years. The steamer vessels range in size from 690 to 767 feet and can carry from 22,300 to 26,300 gross tons per trip. ASC’s vessels operate exclusively in the fresh water conditions of the Great Lakes and as a result, with proper care and maintenance, may achieve extended use well beyond the useful life estimates.

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All of ASC’s vessels are equipped with self-unloading equipment, enabling them to discharge dry bulk cargo without assistance from shore-side equipment or personnel. This equipment enables the vessels to operate twenty four hours a day, seven days a week. ASC’s vessels are capable of transporting and unloading almost any free flowing, dry bulk commodity. ASC’s customers are primarily consumers of iron ore, western and eastern coal, metallurgical limestone and limestone aggregates. ASC served over 35 customers in 2007 with the top five customers comprising 68% of ASC’s total revenue.

ASC operates pursuant to contractual commitments with customers to carry a stipulated range of freight volume each year. Committed volume is supplemented with spot opportunities. In 2007, ASC carried 37.3 million net tons of cargo including both contracted volume and spot business. ASC’s customer portfolio has remained relatively stable over the past three years and includes a mix of companies in the steel production, power generation and construction industries. Seventeen of the vessels in ASC’s fleet are used to service these contracts and spot business. ASC’s remaining vessel operates under a long-term time charter agreement that is scheduled to expire in 2015.

In 2007, for the markets that ASC serves, there were approximately 99 million net tons of freight volume carried by United States-Flag vessels on the Great Lakes. This freight volume was distributed among approximately 50 vessels, of which ASC’s fleet carried approximately 38%. ASC’s primary competitors on the domestic Great Lakes are Grand River Navigation, Great Lakes Fleet, Inc., Interlake Steamship Company, K & K Integrated Logistics, VanEnkevort Tug and Barge, Upper Lakes Towing, and Wisconsin & Michigan Steamship Company. ASC principally competes on the basis of price, customer relationships and service capabilities.

TRADEMARKS, PATENTS AND RESEARCH ACTIVITIES

Patents, trademarks, licenses and research and development activities are not material to GATX’s businesses taken as a whole.

SEASONAL NATURE OF BUSINESS

Seasonality is not considered significant to the operations of GATX and its subsidiaries taken as a whole.

CUSTOMER BASE

GATX, taken as a whole, is not dependent upon a single customer nor does it have any significant customer concentrations. Segment concentrations, if material, are described above.

EMPLOYEES

As of December 31, 2007, GATX employed approximately 2,094 persons, of whom 51% were covered by union contracts.

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ENVIRONMENTAL MATTERS

GATX’s operations, as well as those of its competitors, are subject to extensive federal, state, local and foreign environmental regulations. These laws cover discharges to waters; air emissions; toxic substances; and the generation, handling, storage, transportation and disposal of waste and hazardous materials. These regulations have the effect of increasing the cost and liability associated with leasing and operating assets. Environmental risks are also inherent in rail operations, which frequently involve transporting chemicals and other hazardous materials.

Some of GATX’s current and previously owned properties have been used for industrial or transportation-related purposes that may have resulted in the discharge of contaminants. As a result, GATX is now subject to, and will from time to time continue to be subject to, environmental cleanup and enforcement actions. In particular, the federal Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), also known as the Superfund law, generally imposes joint and several liability for cleanup and enforcement costs, without regard to fault or the legality of the original conduct, on current and former owners and operators of a site. Accordingly, GATX may be responsible under CERCLA and other federal and state statutes for all or a portion of the costs to clean up sites at which certain substances may have been released by GATX, its current lessees, former owners or lessees of properties, or other third parties. Environmental remediation and other environmental costs are accrued when considered probable and amounts can be reasonably estimated. As of December 31, 2007, environmental costs were not material to GATX’s results of operations, financial position or liquidity. For further discussion, see Note 18 to the consolidated financial statements.

AVAILABLE INFORMATION

GATX makes available free of charge at its website, www.gatx.com, its most recent annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed or furnished pursuant to the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after such material is electronically filed with, or furnished to, the U.S. Securities and Exchange Commission (“SEC”). Charters for the Audit Committee, Compensation Committee and Governance Committee of the Board of Directors, the Corporate Governance Guidelines, the Code of Business Conduct and Ethics and the Code of Ethics for Senior Officers are posted under Corporate Governance in the Investor Relations section of the GATX website, and are available in print upon request by any shareholder. Within the time period prescribed by SEC and New York Stock Exchange regulations, we will post on our website any amendment to the Code of Ethics for Senior Officers and the Code of Business Conduct and Ethics any waivers thereof. The information on GATX’s website is not incorporated by reference into this report.

Item 1A.   Risk Factors

GATX is subject to a number of risks which investors should consider.

Competition could result in decreased profitability.

GATX operates in a highly competitive business environment. In many cases, competitors are larger entities that have greater financial resources, higher credit ratings and a lower cost of capital than GATX. These factors may enable competitors to offer leases and loans to customers at lower rates than GATX is able to provide, thus impacting GATX’s asset utilization or GATX’s ability to lease assets or make loans on a profitable basis.

GATX depends upon continued demand from customers for its assets.

GATX relies upon continued demand from its customers for its assets. This demand depends upon the stability and growth of customer operating requirements. A number of our customers operate in cyclical markets, such as the steel, chemical and construction industries, and demand for our assets is tied to cycles in those markets. Other factors influencing customer operating requirements include changes in production volumes, potential changes in supply chains, choices regarding type of transportation asset, availability of substitutes, and other operational needs.

In many cases, demand for GATX’s assets is also dependent on customers’ desire to lease, rather than purchase assets. There are a number of items that factor into the customer’s decision whether to lease or purchase assets, such as

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tax considerations, interest rates, balance sheet considerations and operational flexibility. GATX has no control over these external considerations and changes in these factors could negatively impact demand for its assets held for lease.

GATX cannot predict whether inflation will continue to have a positive impact on its financial results.

Inflation in lease rates as well as inflation in residual values for rail, marine and other equipment has historically benefited GATX’s financial results. Effects of inflation are unpredictable as to timing and duration and depend on market conditions and economic factors.

GATX’s assets may become obsolete.

GATX’s assets are subject to functional, regulatory or economic obsolescence. Although GATX believes it is adept at managing obsolescence risk, there is no guarantee that changes in various market fundamentals or the adoption of new regulatory requirements will not unexpectedly cause asset obsolescence in the future.

GATX’s allowance for possible losses may be inadequate to protect against losses.

GATX’s allowance for possible losses on gross receivables may be inadequate if unexpected adverse changes in the economy differ from the expectations of management, or if discrete events adversely affect specific customers, industries or markets. If the allowance for possible losses is insufficient to cover losses related to gross receivables, then GATX’s financial position or results of operations could be negatively impacted.

The fair market value of GATX’s long-lived assets may differ from the value of those assets reflected in its financial statements.

GATX’s assets consist primarily of long-lived assets such as railcars, marine vessels and industrial equipment. The carrying value of these assets in the financial statements may at times differ from their fair market value. These valuation differences may be positive or negative and may be material based on market conditions and demand for certain assets. GATX regularly reviews its long-lived assets for impairment.

GATX may incur future asset impairment charges.

An asset impairment charge may result from the occurrence of unexpected adverse events or management decisions that impact GATX’s estimates of expected cash flows to be generated from its long-lived assets or joint venture investments. GATX regularly reviews long-lived assets and joint ventures for impairment, including when events or changes in circumstances indicate the carrying value of an asset or investment may not be recoverable. GATX may be required to recognize asset impairment charges in the future as a result of a weak economic environment, challenging market conditions, events related to particular customers or asset types, or as a result of asset or portfolio sale decisions by management.

GATX may not be able to secure financing to fund its operations or contractual commitments.

GATX is dependent, in part, upon the issuance of unsecured and secured debt to fund its operations and contractual commitments. A number of factors could cause GATX to incur increased borrowing costs and to have greater difficulty accessing public and private markets for both secured and unsecured debt. These factors include the global capital market environment and outlook, GATX’s financial performance and GATX’s credit ratings and outlook as determined primarily by rating agencies such as Standard & Poor’s (“S&P”) and Moody’s Investor Service (“Moody’s”). If GATX is unable to secure financing on acceptable terms, GATX’s other sources of funds, including available cash, bank facilities, cash flow from operations and portfolio proceeds may not provide adequate liquidity to fund its operations and contractual commitments.

GATX may not be able to procure insurance on a cost-effective basis.

The ability to insure its assets and their associated risks is an important aspect of GATX’s ability to manage risk. There is no guarantee that such insurance will be consistently available on a cost-effective basis in the future.

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GATX is subject to extensive environmental regulations and the costs of remediation may be material.

GATX’s operations are subject to extensive federal, foreign, state and local environmental laws and regulations concerning, among other things, the discharge of hazardous materials and remediation of contaminated sites. In addition, some of GATX’s properties, including those previously owned or leased, have been used for industrial purposes whose activities may have resulted in discharges onto the property. Environmental liability can extend to previously owned or operated properties as well as properties currently owned and used by the Company. Environmental liabilities are routinely assessed, including obligations and commitments for remediation of contaminated sites and assessments of ranges and probabilities of recoveries from other responsible parties. Due to the regulatory complexities and risk of unidentified contaminants on its properties, the potential exists for environmental and remediation costs to be materially different from the costs GATX has estimated.

GATX has been, and may in the future be, involved in various types of litigation.

The nature of assets which GATX owns exposes the Company to the potential for various claims and litigation related to, among other things, personal injury and property damage, environmental claims and other matters. The transportation of certain commodities by GATX’s railcars and marine vessels, particularly those classified as hazardous materials, pose risks resulting in potential liabilities and losses that could have a significant effect on GATX’s consolidated financial condition or results of operations.

High energy prices could have a negative effect on the demand for GATX’s products and services.

Energy prices, including the price of natural gas and oil, are significant cost drivers for many of our customers, either directly in the form of raw material costs in industries such as the chemical and steel industries, or indirectly in the form of increased transportation cost. Sustained high energy prices could negatively impact these industries resulting in a corresponding adverse effect on the demand for GATX’s operating assets and assets held for lease, as well as related services.

New regulatory rulings could negatively affect GATX’s profitability.

GATX’s rail and marine operations are subject to the jurisdiction of a number of federal agencies, including the Department of Transportation. State agencies regulate some aspects of rail operations with respect to health and safety matters not otherwise preempted by federal law. GATX’s operations are also subject to the jurisdiction of regulatory agencies of foreign countries. New domestic or foreign regulatory rulings may negatively impact GATX’s financial results through higher costs or reduced economic value of its assets.

Events or conditions negatively affecting certain assets, customers or geographic regions in which GATX has a large investment could have a negative impact on its results of operations.

GATX’s revenues are generally derived from a number of different asset types, customers, industries and geographic locations. However, from time to time, GATX could have a large investment in a particular asset type, a large revenue stream associated with a particular customer, or a large number of customers located in a particular geographic region. Decreased demand from a discrete event impacting a particular asset type, discrete events with a specific customer or industry, or adverse regional economic conditions, particularly for those assets, customers or regions in which GATX has a concentrated exposure, could have a negative impact on GATX’s results of operations.

Fluctuations in foreign exchange rates could have a negative impact on GATX’s results of operations.

GATX’s results are exposed to foreign exchange rate fluctuations as the financial results of certain subsidiaries are translated from their local currency into U.S. dollars upon consolidation. As exchange rates vary, the operating results of foreign subsidiaries, when translated, may differ materially from period to period. GATX is also subject to gains and losses on foreign currency transactions, which could vary based on fluctuations in exchange rates and the timing of the transactions and their settlement. In addition, fluctuations in foreign exchange rates can have an effect on the demand and relative price for services provided by GATX domestically and internationally, and could have a negative impact on GATX’s results of operations.

10

GATX may be unable to maintain assets on lease or charter at satisfactory rates.

GATX’s profitability is largely dependent on its ability to maintain assets on lease (utilization) at satisfactory lease rates or charter rates. A number of factors can adversely affect utilization, lease and charter rates, including, but not limited to: an economic downturn causing reduced demand or oversupply in the markets in which GATX operates, changes in customer behavior, or any other change in supply or demand caused by factors discussed in this Risk section.

GATX is subject to the inherent risks of its joint venture investments.

GATX’s investments include noncontrolling interests in a number of joint ventures managed and operated by third parties. These entities are subject to many of the same risk factors outlined herein. GATX is indirectly exposed to these risks through its ownership interest in these entities and adverse developments at the entity level could potentially have a negative impact on GATX’s results of operations. Additionally, in those instances where the joint venture is managed and operated by third parties, including affiliates of partners, the Company may not have control over all operational decisions which may result in actions taken at the entity level that could potentially have an adverse economic impact on GATX.

Unfavorable conditions on the Great Lakes could disrupt normal business operations, which could result in increased costs and decreases in revenues.

The success of GATX’s ASC business segment is dependent upon its ability to operate efficiently on the Great Lakes. Severe weather conditions and unanticipated ice formation could cause significant business interruptions. Additionally, low water levels may restrict the volume that may be transported in ASC’s vessels on a per trip basis. As a result, these conditions could negatively impact results of operations due to increased operating costs or decreased revenues.

Many of GATX’s employees are represented by unions, and the failure to successfully negotiate collective bargaining agreements may result in strikes, work stoppages or substantially higher labor costs.

A significant portion of GATX’s employees are union-represented and work under collective bargaining agreements with various labor organizations that cover a range of worker matters, including wages, health and welfare benefits, work rules and other issues. Historically, the Company and the unions have been successful in negotiating acceptable agreements without the incidence of any extended work stoppages. However, if the Company is unable to negotiate acceptable new agreements, it could result in strikes by the affected workers, business disruptions and increased operating costs as a result of higher wages or benefits paid to union workers, any of which could have an adverse effect on the Company’s consolidated financial condition, results of operations or liquidity.

Changes in assumptions used to calculate post-retirement costs could adversely affect GATX’s results of operations.

GATX’s pension and other post-retirement costs are dependent on various assumptions used to calculate such amounts, including discount rates, long-term return on plan assets, salary increases, health care cost trend rates and other factors. Changes to any of these assumptions could adversely affect GATX’s results of operations and financial condition.

GATX’s effective tax rate could be adversely affected by changes in the mix of earnings in the U.S. and foreign countries.

GATX is subject to taxes in both the U.S. and various foreign jurisdictions. As a result, GATX’s effective tax rate could be adversely affected by changes in the mix of earnings in the U.S. and foreign countries with differing statutory tax rates, legislative changes impacting statutory tax rates, including the impact on recorded deferred tax assets and liabilities, changes in tax laws or by material audit assessments.

United States and world economic and political conditions, including acts or threats of terrorism or war, could adversely affect GATX.

National and international political developments, instability and uncertainties, including political unrest and threats of terrorist attacks, could result in global economic weakness in general and in the United States in

11

particular, and could have an adverse impact on GATX. The effects may include: legislation or regulatory action directed toward improving the security of railcars and marine vessels against acts of terrorism, which could affect the construction or operation of railcars and marine vessels, a decrease in demand for rail and marine services, lower utilization of new and existing rail and marine equipment, lower rail lease and marine charter rates; impairments of rail and marine assets or capital market disruption, which may raise GATX’s financing costs or limit its access to capital, and liability or losses resulting from acts of terrorism involving GATX’s assets. Depending upon the severity, scope and duration of these effects, the impact on GATX’s financial position, results of operations and cash flows could be material.

GATX’s internal control over financial accounting and reporting may not detect all errors or omissions in the financial statements.

If GATX fails to maintain the adequacy of internal control over financial accounting, the Company may not be able to ensure that GATX can conclude on an ongoing basis that it has effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act and related regulations. Although GATX’s management has concluded that adequate internal control procedures are in place, no system of internal control can provide absolute assurance that the financial statements are accurate and free of error. As a result, the risk exists that GATX’s internal control may not detect all errors or omissions in the financial statements.

Item 1B.   Unresolved Staff Comments

None.

Item 2.   Properties

Information regarding the location and general character of certain properties of GATX is included in Item 1, Business, of this document.

At December 31, 2007, locations of operations were as follows:

GATX Headquarters

Chicago, Illinois

Rail

Business Offices

San Francisco, California

Alpharetta, Georgia

Chicago, Illinois

Sterling, Illinois

Paducah, Kentucky

Bozeman, Montana

Marlton, New Jersey

Holicong, Pennsylvania

Houston, Texas

Calgary, Alberta

Cambridge, Ontario

Ennismore, Ontario

Montreal, Quebec

Vienna, Austria

Hamburg, Germany

Mexico City, Mexico

Warsaw, Poland

Major Service Centers

Colton, California

Waycross, Georgia

Hearne, Texas

Red Deer, Alberta

Sarnia, Ontario

Coteau-du-Lac, Quebec

Montreal, Quebec

Moose Jaw, Saskatchewan

Hanover, Germany

Ostroda, Poland

Customer Site Locations

Donaldsonville, Louisiana

Geismar, Louisiana

Cincinnati, Ohio

Catoosa, Oklahoma

Freeport, Texas

Yazoo City, Missouri

Gdansk, Poland

Plock, Poland

Fast Track Service Centers

Macon, Georgia

East Chicago, Indiana

Terre Haute, Indiana

Shreveport, Louisiana

Kansas City, Missouri

La Porte, Texas

Plantersville, Texas

Mobile Service Units

Mobile, Alabama

Colton, California

Tampa, Florida

Gray, Georgia

East Chicago, Indiana

Sioux City, Iowa

Donaldsonville, Louisiana

Lake Charles, Louisiana

Albany, New York

Masury, Ohio

Cleveland, Tennessee

Galena Park, Texas

Olympia, Washington

Edmonton, Alberta

Red Deer, Alberta

Clarkson, Ontario

Sarnia, Ontario

Moose Jaw, Saskatchewan

Montreal, Quebec

12

Specialty

Business Offices

San Francisco, California

American Steamship Company

Business Offices

Williamsville, New York
Toledo, Ohio

Item 3.   Legal Proceedings.

Information concerning litigation and other contingencies is described under “Legal Proceedings and Other Contingencies” in Note 18 to the consolidated financial statements and is incorporated herein by reference.

Item 4.   Submission of Matters to a Vote of Security Holders

None.

EXECUTIVE OFFICERS OF THE REGISTRANT

The following information regarding GATX’s executive officers is included in Part I in lieu of inclusion in the definitive GATX Proxy Statement:

		Position
		Held
Name	Offices Held	Since		Age
Brian A. Kenney	Chairman, President and Chief Executive Officer		2005		48
Robert C. Lyons	Senior Vice President and Chief Financial Officer		2007		44
James F. Earl	Executive Vice President and Chief Operating Officer		2006		51
Deborah A. Golden	Senior Vice President, General Counsel and Secretary		2007		53
Gail L. Duddy	Senior Vice President, Human Resources		2004		55
William M. Muckian	Senior Vice President, Controller and Chief Accounting Officer		2007		48
William J. Hasek	Senior Vice President and Treasurer		2007		51
Michael T. Brooks	Senior Vice President and Chief Information Officer		2008		38
Curt F. Glenn	Senior Vice President, Portfolio Management		2007		53
Clifford J. Porzenheim	Senior Vice President, Strategic Growth		2007		44

•  Mr. Kenney has served as Chairman and Chief Executive Officer of GATX since 2005. Previously, Mr. Kenney served as President of GATX from 2004 to 2005, Senior Vice President and Chief Financial Officer of GATX from 2002 to 2004, Vice President and Chief Financial Officer of GATX from 1999 to 2002, Vice President, Finance from 1998 to 1999, Vice President and Treasurer from 1997 to 1998, and Treasurer from 1995 to 1996.

•  Mr. Lyons has served as Senior Vice President and Chief Financial Officer of GATX since 2007. Previously, Mr. Lyons served as Vice President and Chief Financial Officer from 2004 to 2007, Vice President, Investor Relations of GATX from 2002 to 2004, Director of Investor Relations of GATX from 1998 to 2002, and Project Manager, Corporate Finance from 1996 to 1998.

•  Mr. Earl has served as Executive Vice President and Chief Operating Officer since 2006. Previously, Mr. Earl served as Executive Vice President — Rail from 2004 to 2006, Executive Vice President — Commercial at Rail from 2001 to 2004 and in a variety of increasingly responsible positions in the GATX Capital Rail Group from 1988 to 2001.

•  Ms. Golden has served as Senior Vice President, General Counsel and Secretary since 2007. Ms. Golden joined GATX in 2006 as Vice President General Council and Secretary. Prior to joining GATX, Ms. Golden served as Vice President and General Counsel of Midwest Generation, LLC from 2004 to 2005, Assistant General Counsel to the Governor of the State of Illinois from 2003 to 2004 and Assistant General Counsel with Ameritech Corporation/SBC Communications, Inc from 1997 to 2001.

•  Ms. Duddy has served as Senior Vice President, Human Resources of GATX since 2004. Previously, Ms. Duddy served as Vice President, Human Resources from 1999 to 2004, Vice President, Compensation

13

and Benefits and Corporate Human Resources from 1997 to 1999, Director of Compensation and Benefits from 1995 to 1997, and Director of Compensation from 1992 to 1995. Ms. Duddy plans to retire in the spring of 2008.

•  Mr. Muckian has served as Senior Vice President, Controller and Chief Accounting Officer of GATX since 2007. Previously, Mr. Muckian served as Vice President, Controller and Chief Accounting Officer from 2002 to 2007, Controller and Chief Accounting Officer of GATX from 2000 to 2002, and Director of Taxes of GATX from 1994 to 2000.

•  Mr. Hasek has served as Senior Vice President and Treasurer of GATX since 2007. Previously, Mr. Hasek served as Vice President and Treasurer from 2002 to 2007, Treasurer from 1999 to 2001, Director of Financial Analysis and Budgeting from 1997 to 1999, and Manager of Corporate Finance from 1995 to 1997.

•  In 2008, Mr. Brooks joined GATX and was elected Senior Vice President and Chief Information Officer. Prior to joining GATX, Mr. Brooks served as Chief Information Officer and Vice President of the retail division of Constellation Energy, a business systems consultant with Accenture and with Oracle Corporation for five years and as a consultant with The Barrington Consulting Group in Washington, DC for five years.

•  Mr. Glenn has served as Senior Vice President, Portfolio Management since 2007. Previously, Mr. Glenn served as Vice President, Portfolio Management from 2006 to 2007 and as a GATX Corporation Vice President since 2004 and Executive Vice President of Specialty since 2003. Prior to that, Mr. Glenn served as Senior Vice President and Chief Financial Officer of the GATX Capital Division of GATX Financial Corporation from 2000 to 2003 and in a variety of increasingly responsible positions at GATX Capital from 1980 to 2000.

•  Mr. Porzenheim has served as Senior Vice President, Strategic Growth since 2007. Previously, Mr. Porzenheim served as Vice President, Strategic Growth from 2006 to 2007, Senior Vice President, Rail Fleet Management and Marketing from 2002 to 2006, Vice President of Corporate Strategy from 1999 to 2002 and Director of Corporate Development from 1996 to 1999.

14

PART II

Item 5.   Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

GATX common stock is listed on the New York and Chicago Stock Exchanges under ticker symbol GMT. The approximate number of common stock holders of record as of January 31, 2008 was 2,898. The following table shows the reported high and low sales price of GATX common shares on the New York Stock Exchange, which is the principal market for GATX shares, and the dividends declared per share:

									2007		2006
	2007		2007		2006		2006		Dividends		Dividends
Common Stock	High		Low		High		Low		Declared		Declared
First quarter	$	49.72	$	42.28	$	41.56	$	36.25	$	0.24	$	0.21
Second quarter		52.53		47.43		48.58		38.63		0.24		0.21
Third quarter		50.78		40.43		43.24		35.69		0.24		0.21
Fourth quarter		47.65		34.59		47.12		40.50		0.24		0.21

For information pertaining to issuable securities under equity compensation plans and the related weighted average exercise price, see Note 21 to the consolidated financial statements and Item 12, “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters”. For information regarding restricted net assets, see Note 13 to the consolidated financial statements.

15

GATX Common Stock Performance Graph

The following Performance Graph and related information shall not be deemed “soliciting material” or to be “filed” with the Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filing under the Securities Act of 1933 or Securities Exchange Act of 1934, each as amended, except to the extent that the Company specifically incorporates it by reference into such filing.

The GATX Common Stock Performance Graph sets forth a comparison of the yearly percentage change in the cumulative total shareholder return on the Company’s Common Stock with the cumulative total shareholder return of the companies within the Standard & Poor’s 500 Composite Stock Price Index (“S&P 500”), the Standard & Poor’s MidCap 400 Index (“MidCap 400”) and the Russell 1000 Financial Services Index (“Russell 1000”). The Company is not aware of any peer companies whose businesses are directly comparable to that of GATX and, therefore, the graph below displays the returns of the Mid-Cap 400 and the Russell 1000, both of which are comprised of companies with market capitalizations similar to GATX. The performance graph assumes $100.00 was invested in GATX Common Stock and each of the indices on December 31, 2002, and all dividends were reinvested.

16

Item 6.   Selected Financial Data

	Year Ended or at December 31
	2007		2006			2005			2004		2003
	In millions, except per share data
Results of Operations
Gross income	$	1,346.0	$	1,229.1		$	1,103.1		$	1,100.7	$	967.9
Income from continuing operations		185.8		151.4			106.0			155.7		69.4
Per Share Data
Basic:
Income from continuing operations	$	3.73	$	2.97		$	2.12		$	3.15	$	1.41
Income (loss) from discontinued operations		0.36		(0.76	)		(2.40	)		0.29		0.16
Total	$	4.09	$	2.21		$	(0.28	)	$	3.44	$	1.57
Average number of common shares		49.9		51.0			50.1			49.3		49.1
Diluted:
Income from continuing operations	$	3.44	$	2.65		$	1.94		$	2.80	$	1.38
Income (loss) from discontinued operations		0.32		(0.63	)		(1.96	)		0.24		0.15
Total	$	3.76	$	2.02		$	(0.02	)	$	3.04	$	1.53
Average number of common shares and common share equivalents		55.4		62.1			61.0			60.1		51.2
Dividends declared per share of common stock	$	0.96	$	0.84		$	0.80		$	0.80	$	1.28
Financial Condition
Assets	$	4,725.6	$	4,647.0		$	5,247.3		$	5,613.6	$	6,081.7
Debt and capital lease obligations		2,359.7		2,214.7			2,872.6			3,132.1		3,493.5
Shareholders’ equity		1,149.5		1,167.7			1,026.1			1,084.3		892.0

17

Item 7.   Management’s Discussion and Analysis of Financial Condition and Results of Operations.

OVERVIEW

General information and characteristics of GATX Corporation (“GATX” or the “Company”), including reporting segments, is included in Item 1, Business, of this document.

The following discussion and analysis should be read in conjunction with the audited financial statements included herein. Certain statements within this document may constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These statements are identified by words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “predict,” or “project” and similar expressions. This information may involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. In addition, certain factors, including Risk Factors identified in Part I of this document may affect GATX’s businesses. As a result, past financial results may not be a reliable indicator of future performance.

This “Management’s Discussion and Analysis of Financial Condition and Results of Operations” is based on financial data derived from the financial statements prepared in accordance with Generally Accepted Accounting Principles (“GAAP”) and certain other financial data that is prepared using non-GAAP components. For a reconciliation of these non-GAAP components to the most comparable GAAP components, see Non-GAAP Financial Measures at the end of this Item.

GATX Corporation leases, operates and manages long-lived, widely used assets in the rail, marine and industrial equipment markets. GATX also invests in joint ventures that complement existing business activities. Headquartered in Chicago, Illinois, GATX has three financial reporting segments: Rail, Specialty and American Steamship Company (“ASC”).

The Company’s former Air segment has been segregated and presented as discontinued operations for all periods presented, see “Discontinued Operations” for additional information.

18

DISCUSSION OF OPERATING RESULTS

The following table presents a financial summary of GATX’s operating segments:

	Years Ended December 31
	2007			2006			2005
	(In millions, except per share data)
Gross Income
Rail	$	950.2		$	883.0		$	821.9
Specialty		162.1			135.7			140.3
ASC		233.0			209.8			138.3
Total segment gross income		1,345.3			1,228.5			1,100.5
Other income		0.7			0.6			2.6
Consolidated Gross Income		1,346.0			1,229.1			1,103.1
Segment Profit
Rail		267.3			247.9			201.5
Specialty		117.5			98.9			106.1
ASC		20.7			32.0			18.4
Total Segment Profit		405.5			378.8			326.0
Less:
Selling, general and administrative expenses		158.7			146.7			141.0
Unallocated interest expense, net		(11.8	)		5.6			6.0
Other income and expense, including eliminations		—			(1.0	)		6.4
Income taxes		72.8			76.1			66.6
Income from continuing operations		185.8			151.4			106.0
Income (Loss) from discontinued operations, net of taxes		17.9			(38.8	)		(119.9	)
Consolidated Net Income (Loss)	$	203.7		$	112.6		$	(13.9	)
Basic earnings per share — income from continuing operations	$	3.73		$	2.97		$	2.12
Diluted earnings per share — income from continuing operations	$	3.44		$	2.65		$	1.94
Dividends declared per common share	$	0.96		$	0.84		$	0.80
Investment Volume	$	640.8		$	763.1		$	503.2
Income from continuing operations, excluding tax benefits	$	165.7		$	145.5		$	106.0
Diluted earnings per share, excluding tax benefits	$	3.08		$	2.55		$	1.94

Financial Performance Measures

The following table presents certain financial performance measures for the Company based on continuing operations for the years ended December 31.

	2007			2006			2005
Return on equity (“ROE”)		16.0	%		13.8	%		10.0	%
Return on assets (“ROA”)		3.2	%		2.8	%		2.1	%
ROE excluding tax benefits		14.3	%		13.3	%		10.0	%
ROA excluding tax benefits		2.8	%		2.7	%		2.1	%

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2007 Highlights

•  Income from continuing operations was significantly impacted by deferred tax benefits of $20.1 million in 2007 and $5.9 million in 2006. Excluding the impact of these benefits from both years, income from continuing operations of $165.7 increased by $20.2 million or 14% from the prior year. The increase was primarily due to the impact of a larger active fleet, lease rate increases and higher asset remarketing income at Rail combined with increased earnings from the Specialty marine joint ventures, partially offset by a decrease in earnings at ASC primarily due to unfavorable operating conditions on the Great Lakes.

•  Total investment volume was $640.8 million in 2007, compared to $763.1 million in 2006 and $503.2 million in 2005. Investment volume in 2006 included $126.3 million for the acquisition of six vessels at ASC. Excluding this acquisition, investment volume in 2007 was comparable to 2006.

•  Increased earnings were the primary driver of the increase in GATX’s ROE in 2007. Excluding tax benefits, ROE was 14.3% in 2007, up from 13.3% in the prior year.

Segment Operations

Segment profit is an internal performance measure used by the Chief Executive Officer to assess the performance of each segment in a given period. Segment profit includes all revenues, including affiliate earnings, attributable to the segments as well as ownership and operating costs that management believes are directly associated with the maintenance or operation of the revenue earning assets. Operating costs include maintenance costs, marine operating costs, asset impairment charges and other operating costs such as litigation, provisions for losses, environmental costs, and asset storage costs. Segment profit excludes selling, general and administrative expenses, income taxes and certain other amounts not allocated to the segments; these amounts are discussed below in Other.

GATX allocates debt balances and related interest expense to each segment based upon a pre-determined fixed recourse leverage level expressed as a ratio of recourse debt (including off balance sheet debt) to equity. The leverage levels for Rail, Specialty and ASC are set at 4:1, 3:1 and 1.5:1, respectively. Management believes that by utilizing this leverage and interest expense allocation methodology, each operating segment’s financial performance reflects an appropriate risk-adjusted cost of capital and is presented on a comparable basis.

Rail

Segment Summary

In 2007, Rail focused on renewing leases at higher rates, extending lease terms on renewals in an effort to reduce future earnings volatility, maintaining a disciplined investment strategy and taking advantage of high asset prices to selectively sell targeted assets. Rail entered the year with approximately 20,000 cars in North America whose contracts were scheduled to expire. Of this amount, approximately 14,600 were renewed, representing a renewal success rate of 72.9%, with the balance largely placed with different customers (“assignments”). The average lease term on renewals of a basket of common car types was 72 months in 2007, compared to 68 months for 2006 and 51 months for 2005. During 2007, Rail invested $494.0 million, acquiring approximately 6,000 cars in North America and 1,100 cars in Europe, compared to $533.6 million invested in 2006 for over 6,900 railcars. 2007 investments included 1,680 cars acquired pursuant to Rail’s committed purchase program. This program has enabled Rail to acquire new railcars at prices more favorable than current spot market prices. Rail also strategically sold, scrapped or otherwise disposed of approximately 4,200 railcars and locomotives in 2007 compared to over 5,000 in 2006.

Notwithstanding Rail’s success in 2007, signs of softness in the North American rail market developed during the year. North American fleet utilization decreased slightly from 98.5% to 97.9% as increases in idle cars were experienced over a wide group of car types. Notably, centerbeam cars (used in construction), gondolas and open hoppers (which carry coal) and tank and covered hopper cars (serving the ethanol markets) experienced significant pressure. These developments are creating challenges in the North American market. Rail is poised to take

20

advantage of potentially falling asset prices by adding railcars through fleet acquisitions at attractive prices, while also acquiring railcars under its committed purchase agreements.

Components of Rail’s operating results are outlined below (in millions):

	Years Ended December 31
	2007		2006		2005
Gross Income
Lease income	$	839.5	$	780.0	$	729.4
Asset remarketing income		32.2		19.7		13.3
Fees		1.2		1.6		1.7
Other income		58.5		59.0		63.8
Revenues		931.4		860.3		808.2
Affiliate earnings		18.8		22.7		13.7
		950.2		883.0		821.9
Ownership Costs
Depreciation		165.8		146.1		132.1
Interest expense, net		114.0		98.6		77.9
Operating lease expense		153.4		163.0		176.2
		433.2		407.7		386.2
Operating costs
Maintenance expense		218.4		201.7		193.3
Asset impairment charges		—		1.1		3.0
Other operating expense		31.3		24.6		37.9
		249.7		227.4		234.2
Segment profit	$	267.3	$	247.9	$	201.5

Rail’s Lease Income

Components of Rail’s lease income as of December 31 are outlined below (in millions):

	2007		2006		2005
North America	$	679.0	$	644.7	$	603.2
Europe		131.4		108.0		102.0
Locomotives		29.1		27.3		24.2
	$	839.5	$	780.0	$	729.4

Rail’s Fleet Data

The following table summarizes fleet activity for Rail’s North American railcars as of December 31:

	2007			2006			2005
Beginning balance		110,478			108,151			106,819
Cars added		6,019			6,302			5,400
Cars scrapped or sold		(4,052	)		(3,975	)		(4,068	)
Ending balance		112,445			110,478			108,151
Utilization rate at year end		97.9	%		98.5	%		98.4	%

21

The following table summarizes fleet activity for Rail’s European railcars as of December 31:

	2007			2006			2005
Beginning balance		18,471			18,854			18,446
Cars added		1,089			607			518
Cars scrapped or sold		(125	)		(990	)		(110	)
Ending balance		19,435			18,471			18,854
Utilization rate at year end		97.2	%		95.5	%		91.1	%

Comparison of Year Ended December 31, 2007, to Year Ended December 31, 2006

Segment Profit

Rail’s 2007 segment profit rose $19.4 million or 7.8% over 2006. The increase was primarily the result of an average of 3,000 more railcars on lease and rate increases achieved in the last two years on lease renewals and assignments, a significant increase in asset remarketing income from the strategic sales of certain railcar types and locomotives and the impact of foreign exchange rates. The increase was partially offset by increased ownership and maintenance costs.

Gross Income

Rail’s North American average active fleet grew by approximately 1,800 cars over the prior year. Additionally, lease rate increases were realized on both renewals and assignments. In North America, average lease renewal rates on a basket of common car types increased 15.5% over the average prior expiring lease rates, compared to 14.3% in 2006. The combined effects of the active fleet growth and lease rate increases contributed $31.7 million in additional lease income. In Europe, an average of over 1,200 more cars on lease and lease rate increases contributed $9.7 million in additional lease income, while strengthening European foreign exchange rates added $13.7 million in lease income. Locomotives contributed $1.8 million in additional lease income, primarily due to higher lease rates on certain overhauled locomotives. Rail expects lease income in 2008 to be higher as the full year effects of the 2007 lease rate increases and active fleet growth are realized and anticipated acquisitions of railcars and locomotives are expected to be placed on lease.

Asset remarketing income was $12.5 million higher in 2007 as Rail took advantage of the strong market and strategically sold certain targeted railcar types and locomotives. Other income was comparable to the prior year as lower third party repair revenue was offset by higher gains from scrapped railcars. As Rail’s fleet of cars under full service leases has grown, service center activities have become increasingly focused on fleet repairs and regulatory compliance for its fleet, resulting in fewer opportunities to service third party railcars. Scrapping gains increased primarily due to higher steel prices as the number of cars scrapped in each year was comparable. In 2007, 1,497 cars were scrapped, resulting in a gain of $9.1 million, compared to 1,458 cars scrapped in 2006 for a gain of $8.4 million.

The decrease in affiliate earnings primarily reflects the absence of $4.9 million of mark-to-market gains on certain derivative hedging instruments at the AAE affiliate recognized in 2006. Excluding the effect of the derivatives, earnings increased primarily due to growth in the size of the active fleet.

Ownership Costs

Ownership costs increased $25.5 million primarily due to depreciation and interest associated with fleet growth, partially offset by lower interest rates. The comparative mix of ownership costs was affected by the purchase in 2006 of approximately 4,700 railcars that were previously leased in under operating leases.

Operating Costs

Maintenance expenses increased $16.7 million, $5.6 million of which was due to the effects of foreign exchange rates. Excluding these effects, maintenance expense increased $11.1 million, comprised primarily of $4.4 million due to unanticipated repair of certain railcar types, $3.3 million due to higher material prices and

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increased railroad repairs, including the replacement of wheelsets, and $1.3 million primarily due to increased volume of compliance inspection and repairs. Maintenance expense is expected to be affected by higher inspection costs over the next few years as a significant number of tank cars in North America will be required to undergo scheduled compliance maintenance.

Asset impairment charges in 2006 primarily consisted of the loss on the sale of a European repair facility.

Other operating expenses increased $6.7 million, largely driven by higher freight and transportation costs related to higher assignment activity and foreign exchange remeasurement losses on U.S. dollar assets in Canada.

Comparison of Year Ended December 31, 2006, to Year Ended December 31, 2005

Segment Profit

Rail’s segment profit rose $46.4 million or 23% over 2005. The increase was primarily the result of an average of 2,800 more railcars on lease, rate increases versus expiring rates on both lease renewals and assignments of existing cars and strong affiliate earnings in Europe. This was partially offset by the costs of a larger fleet including ownership and maintenance costs.

Gross Income

Rail continued to benefit from improving conditions in its markets during 2006 and as a result, revenues increased $52.1 million, reflecting higher lease rates and an average of 2,800 more cars on lease.

In North America, Rail had an average of 2,300 more cars on lease. Additionally, strong demand contributed to high lease renewal success, increased lease rates and near full utilization of the fleet. In combination, these factors resulted in a $41.5 million increase in lease income. For the year ended December 31, 2006, the average North American renewal lease rate on a basket of common car types increased 14.3% over the expiring rate and fleet utilization for the entire year was 98.5%. Rail’s locomotive business also experienced growth during 2006 as higher lease rates and the placement of additional locomotives on lease contributed $3.1 million to the increase in lease income.

Rail’s European operations continued to improve; an average of over 500 more cars on lease and increased demand contributed to high lease renewal success and slightly higher lease rates, resulting in a $3.1 million increase in lease income. The effect of the foreign exchange rate changes on European sourced revenues also contributed $2.5 million favorably to results.

Asset remarketing income was $6.4 million higher as Rail took advantage of the strong market and sold certain railcar types. Other income decreased due to lower third-party repairs, partially offset by higher gains from scrapped railcars. As Rail’s fleet of cars under full service leases has grown, Rail’s service center activities have become increasingly focused on repairs and regulatory compliance for its fleet, resulting in fewer opportunities to service third party railcars. Scrapping gains increased due to higher scrap steel prices as 1,458 cars were scrapped in 2006, resulting in gains of $8.4 million, compared to 1,857 cars scrapped in 2005, resulting in gains of $6.4 million.

The increase in affiliate earnings reflects improved operating results at Rail’s affiliates as they also benefited from the strong market conditions. Additionally, mark to market gains of $4.9 million on certain derivative hedging instruments at the AAE affiliate also contributed to the increase. Prior year affiliates’ earnings were affected by the write down of an investment in a non-core foreign logistics business, partially offset by an asset remarketing gain recognized by a domestic affiliate.

Ownership Costs

Ownership costs increased $21.5 million primarily due to depreciation and interest associated with fleet growth, partially offset by lower interest rates. The comparative mix of ownership costs was affected by the purchase in 2006 of approximately 4,700 railcars that had been previously leased in under operating leases and the sale and leaseback in 2005 of approximately 2,900 railcars.

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Operating Costs

Maintenance expenses increased $8.4 million, reflective of the increased costs associated with maintaining a larger fleet. Additionally, higher costs for increased repairs performed by railroads, component price increases for regular maintenance and conversion work, and the effect of foreign exchange rate changes also contributed to the higher costs.

Asset impairment charges were $1.9 million lower than 2005, which included the write down of a North American repair facility that was sold in 2006 and the write down of certain locomotives in Europe. In 2006, asset impairment charges consisted primarily of the loss on the sale of a European repair facility.

Other operating expenses decreased $13.3 million, driven by lower car and foreign franchise tax expenses, lower legal costs associated with claim defenses and favorable translation gains on U.S. dollar denominated liabilities at Rail’s European operations. Additionally, 2005 included $5.0 million of debt extinguishment costs related to the termination of a structured financing in Canada.

Railcar Regulatory Issues

Railroad derailments and similar incidents have led to calls for increased regulation to address safety and security issues associated with the transportation of hazardous materials.

In 2007, the Tank Car Committee of the Association of American Railroads (“AAR”) finalized new performance standards for rail tank cars that transport toxic–by–inhalation hazardous materials in order to reduce the probability of a release of these materials in the event of a rail accident. Pursuant to these new rules, all cars transporting these materials must comply with the new performance standards by December 31, 2018. Car owners are required to submit plans to the AAR for complying with the new standards by December 31, 2008. GATX owns or leases approximately 3,100 tank cars (3% of its North American fleet) that carry these materials and, based upon management’s review, GATX does not expect that the new rules will have a material impact on the Company’s financial position or results of operations

In January 2007, the Federal Railroad Administration (“FRA”) announced that it had signed a Memorandum of Cooperation with industry participants in connection with the Next Generation Rail Tank Car Project, a research program intended to improve the safety of rail shipments of commodities such as toxic–by–inhalation materials and high risk gases and liquids. It is anticipated that the FRA will issue new federal design standards for tank cars that transport these materials in 2008. At this time, GATX cannot reasonably determine what effect, if any, new design standards might have in the event such standards are adopted by the FRA.

Pursuant to legislative directives, the FRA is conducting an analysis to determine the impact resistance of pressurized tank cars built with non-normalized steel prior to 1989, and will initiate a rulemaking to develop and implement an appropriate design standard for pressurized tank cars. This analysis is ongoing and, to date, no rules have been issued curtailing use of these cars. The Company owns or leases approximately 3,200 pre-1989 built pressurized tank cars in North America (3% of its North American fleet).

The Company continues to work actively with trade associations and others to participate in the legislative and regulatory process affecting the safe and secure transportation of hazardous materials by rail. At this time, the effect on GATX of the legislative mandates made on the FRA described above, the probability of adoption of other legislation or rules and their resulting impact on GATX cannot be reasonably determined.

Specialty

Segment Summary

The Specialty portfolio grew in 2007 as new investments of $141.0 million, comprised primarily of $110 million of industrial equipment assets and $18 million of marine assets, exceeded asset dispositions and depreciation, portfolio run-off and affiliate distributions. Specialty’s total asset base including off balance sheet assets, was $521.4 million at December 31, 2007 compared to $499.9 million and $467.2 million at December 31,

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2006 and 2005, respectively. The estimated net book value equivalent of managed assets was $378.1 million at December 31, 2007.

Segment profit at Specialty has benefited over the last several years from substantial asset remarketing income attributable to wholly owned and affiliate investments as well as from the managed portfolios. This level of remarketing income is not expected to continue in 2008.

Components of Specialty’s operating results are outlined below (in millions):

	Years Ended December 31
	2007		2006		2005
Gross Income
Lease income	$	51.5	$	42.0	$	31.4
Interest income on loans		3.9		3.6		7.7
Asset remarketing income		29.2		27.9		28.1
Fees		1.2		3.3		3.4
Other income		1.9		5.5		9.7
Revenues		87.7		82.3		80.3
Affiliate earnings		74.4		53.4		60.0
		162.1		135.7		140.3
Ownership costs
Depreciation		13.0		7.0		4.2
Interest expense, net		15.8		16.9		16.8
Operating lease expense		2.7		3.9		4.1
		31.5		27.8		25.1
Operating costs
Maintenance expense		0.3		0.1		0.8
Asset impairment charges		2.3		4.4		3.2
Other operating expenses		10.5		4.5		5.1
		13.1		9.0		9.1
Segment profit	$	117.5	$	98.9	$	106.1

Comparison of Year Ended December 31, 2007, to Year Ended December 31, 2006

Segment Profit

Specialty’s segment profit of $117.5 million was $18.6 million or 18.8% higher than the prior year. The increase was primarily due to higher marine affiliate earnings and the contribution from new operating lease assets acquired over the last two years, partially offset by lower fees and other income. Asset remarketing income generated from both wholly owned and affiliate owned assets, as well as the managed portfolios was comparable to 2006.

Gross Income

Revenues of $87.7 million were $5.4 million higher than the prior year. Lease income increased primarily due to investments in operating lease assets made over the past two years and higher usage rents from pooled marine vessels. Asset remarketing for both 2007 and 2006 primarily reflects gains and fees received in each period from sales of assets and can be affected by discrete events. For example, in 2007, a lessee exercised its purchase option, resulting in an $18.3 million gain and in 2006, significant residual sharing fees of $14.0 million and $8.3 million were received from remarketing events in two of the managed portfolios. The timing of asset remarketing income is

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dependent on transactional opportunities and market conditions and is expected to be uneven in nature. Other income decreased $3.6 million primarily due to lower securities gains recorded in the current year.

Affiliate earnings of $74.4 million increased $21.0 million primarily as a result of increased operating earnings from the marine joint ventures. Asset remarketing income at the affiliate level was comparable in 2007 and 2006 as approximately $20 million of remarketing income was recognized in each year. In 2007, remarketing gains were primarily realized from the partial liquidation of a mixed asset joint venture comprised of rail, air and marine assets and the sale of a vessel by a marine affiliate. In 2006, gains were primarily realized from a residual value guarantee, the sale of engines in the aircraft engine leasing affiliate and the sale of marine vessels.

Ownership Costs

Ownership costs of $31.5 million were $3.7 million higher primarily due to depreciation on new operating lease assets.

Operating Costs

Asset impairment charges in both years primarily reflect the write downs of certain cost method investments. Other operating expenses include net bad debt recoveries of $3.1 million in 2006 versus a loss provision of $1.0 million in 2007. Excluding the bad debt activity, other operating expenses increased primarily due to higher operating expenses associated with increased vessel activity and higher fuel costs and a net decrease in the fair value of derivatives.

Comparison of Year Ended December 31, 2006, to Year Ended December 31, 2005

Segment Profit

Specialty’s segment profit of $98.9 million was $7.2 million or 6.8% lower than the prior year. The decrease was primarily due to lower interest income, gains from the sale of securities and affiliate earnings, and higher ownership costs. This was partially offset by significantly higher lease income in the current year. Asset remarketing income was significant in 2006 and 2005; both years included a large residual sharing fee from one managed portfolio transaction.

Gross Income

Revenues of $82.3 million were $2.0 million higher than the prior year. Lease income increased primarily due to investments in new operating assets over the past two years and higher usage rents from marine vessels. Interest income decreased $4.1 million as a result of the repayment of certain loans in 2005. Asset remarketing for both 2006 and 2005 primarily reflects gains and fees received in each period from sales of assets. Significant residual sharing fees of $14.0 million and $12.8 million were received in 2006 and 2005, respectively, related to one transaction in the managed portfolio. The timing of asset remarketing income is dependent on transactional opportunities and market conditions and is expected to be uneven in nature. Other income decreased $4.2 million primarily due to a $3.7 million gain from the sale of securities recorded in the prior year.

Affiliate earnings of $53.4 million decreased $6.6 million primarily as a result of decreased operating earnings from the marine joint ventures, partially offset by increased remarketing gains, primarily in an aircraft engine leasing joint venture. The marine joint ventures continued to post strong earnings in 2006; however, not at the levels experienced in 2005.

Ownership Costs

Ownership costs of $27.8 million were $2.7 million higher primarily due to depreciation on new operating assets.

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Operating Costs

Asset impairment charges in both years primarily reflect write downs of certain cost method investments. Other operating expenses include net bad debt recoveries of $3.1 million and $2.3 million in 2006 and 2005, respectively. Excluding the recoveries from both years, other operating expenses increased primarily due to higher operating expenses associated with increased vessel activity.

ASC

Segment Summary

ASC’s 2007 results reflect a full year of operation for the six vessels acquired from Oglebay Norton Marine Services in June of 2006. ASC’s operations in 2007 were hampered throughout the sailing season by difficult operating conditions on the Great Lakes. Specifically, difficult weather conditions, particularly at the beginning and end of the sailing season hindered vessel operations. Additionally, low water levels created problems for heavily loaded vessels, causing delays in the unloading of cargo and effectively reducing vessel carrying capacity. These operating conditions had a significant impact on ASC, creating operational inefficiencies and negatively impacting financial results. Rising fuel costs also negatively impacted results in 2007.

ASC’s fleet of 18 vessels was fully utilized throughout 2007 and the outlook in 2008 for freight demand on the Great Lakes remains positive, with the exception of potential softness in the limestone sector. Subsequent to year end, the hull of one of ASC’s 1,000 foot vessels, the M/V Walter J. McCarthy Jr. was breached as it attempted to lay up at dock for the winter. Repairs are expected be completed by June 30, 2008, resulting in the loss of use of this vessel for a portion of the 2008 sailing season. Neither the cost of the repair nor the temporary loss of use of the vessel are expected to have a material affect on GATX’s results of operations in 2008.

Components of ASC’s operating results are outlined below (in millions):

	Years Ended December 31
	2007			2006			2005
Gross Income
Marine operating revenues	$	228.7		$	205.6		$	135.7
Lease income		4.2			4.2			2.4
Other income		0.1			—			0.2
		233.0			209.8			138.3
Ownership costs
Depreciation		12.6			10.2			6.5
Interest expense, net		9.9			8.1			5.1
		22.5			18.3			11.6
Operating costs
Maintenance expense		17.4			12.3			11.4
Marine operating expense		172.7			147.5			96.9
Asset impairment charges		—			—			—
Other operating expenses		(0.3	)		(0.3	)		—
		189.8			159.5			108.3
Segment profit	$	20.7		$	32.0		$	18.4

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ASC’S Fleet Data

The following table summarizes fleet activity for ASC’s Great Lakes fleet as of December 31:

	2007		2006		2005
Beginning balance		18		12		11
Vessels added		—		6		1
Ending balance		18		18		12

Comparison of Year Ended December 31, 2007, to Year Ended December 31, 2006

Segment Profit

ASC’s segment profit decreased $11.3 million or 35.3% compared to 2006. The variance was primarily attributable to significant weather delays at the beginning and end of the 2007 sailing season, lower water levels and escalating fuel costs. Additionally, the recognition in 2007 of winter maintenance expense for the vessels acquired in 2006 also contributed to the variance. Winter maintenance costs for these vessels were capitalized in 2006 in connection with the acquisition.

Gross Income

ASC’s gross income increased $23.2 million from the prior year. The increase was primarily due to freight rate increases and higher fuel surcharges. In accordance with certain contract provisions, ASC is able to recover a portion of fuel cost increases from its customers. The fuel surcharges were offset by higher fuel costs in marine operating expenses. While ASC benefited from a full year of operations from the vessels acquired in June of 2006, total net tons carried in 2007 increased only marginally due to the aforementioned weather delays and operating conditions. Net tons carried in 2007 were 37.3 million compared to 37.2 million in 2006.

Ownership Costs

ASC’s ownership costs were $4.2 million higher than the prior year. Depreciation and interest expense increased $2.4 million and $1.8 million, respectively, primarily reflecting a full year of expense recognition for the acquired vessels compared to six months in the prior year.

Operating Costs

ASC’s operating costs increased $30.3 million from the prior year. The variance was primarily due to a full year of operating costs for the acquired vessels compared to only six months in the prior year. Higher fuel expense as well as higher labor costs resulting from a new labor agreement executed in 2006 also contributed to the increase. Fuel prices increased approximately 10%; however, a portion of the increased fuel costs were recovered through fuel surcharges. Maintenance expense increased primarily as a result of winter maintenance costs for the acquired vessels. These costs were capitalized in 2006 in connection with the acquisition.

Comparison of Year Ended December 31, 2006, to Year Ended December 31, 2005

Segment Profit

ASC’s segment profit of $32.0 million increased $13.6 million or 73.9%, primarily as a result of the operating contribution generated by the six acquired vessels, a full year of income from the time charter vessel, which commenced operation in June 2005, and freight rate increases for ASC’s existing fleet, partially offset by higher vessel operating and ownership costs.

Gross Income

ASC’s gross income of $209.8 million increased $71.5 million primarily due to the impact of the vessel acquisition, a full year of operating revenue and lease income from the time charter vessel, higher freight rates and increased fuel surcharges. The fuel surcharges were offset by higher fuel costs in marine operating expenses.

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The additional capacity attributable to the six acquired vessels contributed $51.2 million of additional freight revenue. Time charter freight revenue and operating lease income increased a total of $6.4 million, reflecting a full year of operation compared to seven months of operation in 2005. Revenue generated from the balance of ASC’s fleet increased $13.9 million primarily due to freight rate increases and fuel surcharges.

Ownership Costs

ASC’s ownership costs of $18.3 million increased $6.7 million primarily due to the costs associated with the acquired vessels.

Operating Costs

ASC’s operating costs increased $51.2 million primarily due to higher marine operating costs as a result of the vessel acquisitions, a full year of operating expenses related to the time charter vessel and higher fuel costs. The six acquired vessels added $36.5 million of operating expenses. Time charter operating expenses increased a total of $5.1 million, reflecting a full year of operation, compared to seven months of operation in 2005. Fuel prices increased approximately 16%; however, a portion of the increased fuel costs were recovered through fuel surcharges. Higher vessel labor costs resulting from a new labor agreement, executed in September 2006, also contributed to the increase.

ASC Regulatory Issues

ASC’s vessels take on ballast water when not fully loaded in order to ensure proper vessel control and safe operation. The United States Coast Guard and various Great Lakes States have initiated rulemakings or otherwise have legislation pending to enact new federal regulations and laws on ballast water discharge standards. The rulemakings and pending legislation focus upon, among other issues, the use of various ballast water treatment technologies designed to prevent the introduction and spread of non-indigenous aquatic species into U.S. waters. To date, no federal or state regulations have been promulgated with respect to this issue. Further, no developed treatment systems have proven effective in eliminating the spread of this species into U.S. waters. Accordingly, ASC cannot determine the impact that any such legislation or regulations, if enacted, may have on its operations.

Other

Other is comprised of unallocated interest expense, selling, general and administrative expenses (“SG&A”), miscellaneous income and expense not directly associated with the reporting segments and eliminations.

Components of Other are outlined below (in millions):

	Years Ended December 31
	2007			2006			2005
Unallocated Expenses
Selling, general and administrative expenses	$	158.7		$	146.7		$	141.0
Unallocated interest expense, net		(11.8	)		5.6			6.0
Other income and expense, including eliminations		—			(1.0	)		6.4
Income taxes		72.8			76.1			66.6
Effective income tax rate		28.2	%		33.4	%		38.6	%

SG&A, Unallocated Interest and Other

SG&A increased $12.0 million in 2007, primarily due to higher compensation expense, including severance costs related to corporate staff reductions following the sale of Air, the effect of changes in foreign exchange rates and, in the prior year, the combination of favorable adjustments of certain accruals and the receipt of benefit claims refunds. SG&A increased $5.7 million in 2006 primarily due to the effect of stock option and stock appreciation rights expensing and higher information technology spending offset by the aforementioned favorable adjustments.

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Unallocated interest expense is the balance (excess or shortfall) of external interest expense remaining after allocation to the reporting segments (including discontinued operations). The unallocated amount is a function of the difference between GATX’s average actual debt balances and the average amount of debt allocated to the reporting segments based on assigned leverage targets. In 2006 and 2005, GATX consolidated leverage exceeded that of the combined segments, whereas, following the sale of Air and throughout 2007, consolidated leverage has been materially lower than that of the combined segments. As a result, unallocated interest expense was a credit in 2007, compared to an expense in 2006 and 2005.

Other items in 2005 primarily consisted of $11.9 million of debt extinguishment costs related to liability management activities, partially offset by the reversal of a $2.7 million corporate provision for losses. Eliminations were immaterial for all periods presented.

Income Taxes

GATX’s effective tax rate in both 2007 and 2006, benefited from favorable deferred tax adjustments resulting from enacted reductions in statutory tax rates in foreign jurisdictions. In 2007, reductions in the Canadian, United Kingdom and German statutory rates resulted in $20.1 million in benefits. In 2006, a reduction in the Canadian statutory rate resulted in a $5.9 million benefit. GATX’s effective tax rate in 2005 was impacted by $9.9 million of taxes related to the repatriation of foreign subsidiary earnings. To take advantage of the one-time dividends received deduction in the American Jobs Creation Act of 2004, GATX repatriated $94.5 million of foreign earnings. Partially offsetting the repatriation expense was a tax benefit of $6.6 million recognized in connection with costs related to the termination of a structured financing. Excluding the impacts of the items noted herein from all years, GATX’s effective tax rate was 35.9% in 2007, 36.0% in 2006 and 36.7% in 2005.

On January 1, 2007, GATX adopted the provisions of Financial Accounting Standards Board (“FASB”) Interpretation No. 48, Accounting for Uncertainty in Income Taxes (“FIN 48”), which is an interpretation of Statement of Financial Accounting Standards (“SFAS”) No. 109, Accounting for Income Taxes (“SFAS 109”). SFAS 109 does not prescribe a recognition threshold or measurement attribute for the financial statement recognition and measurement of a tax position taken in a tax return. FIN 48 clarifies the application of SFAS No. 109 by defining criteria that an individual tax position must meet for any tax benefit to be recognized in an enterprise’s financial statements. As a result of the implementation of FIN 48, GATX recorded a decrease in the liability for unrecognized tax benefits and a corresponding increase of $11.0 million to the 2007 opening balance of retained earnings.

See Note 15 to the consolidated financial statements for additional information on income taxes.

Discontinued Operations

In 2006, GATX agreed to sell the majority of its aircraft leasing business to Macquarie Aircraft Leasing Limited (“MALL”). The sale was completed in two stages: the sale of wholly owned aircraft closed on November 30, 2006, and the sale of partnered aircraft closed on January 17, 2007. Separately in 2006, GATX sold 26 wholly owned and partnered aircraft and its interest in Pembroke Group, a 50% owned aircraft leasing affiliate. These events resulted in the disposition of GATX’s aircraft leasing operation (formerly the “Air” segment). Accordingly, Air has been segregated and classified as discontinued operations for all periods presented.

GATX had been in the commercial aircraft leasing business since 1968, building a valuable operating lease platform and portfolio of aircraft. GATX believes that, relative to competitors in the industry, its lower scale and higher cost of capital resulted in a competitive disadvantage and that the sale of the Air business will enable it to realize greater value for its shareholders than could have been realized from continuing to own and operate the business. Gross proceeds from these sales in 2006 totaled $1.3 billion, of which approximately $800 million was used to retire debt and pay transaction costs. The remaining proceeds, including $229.9 million received in 2007, were primarily used to fund new investments in rail, marine and industrial assets and to repurchase GATX common stock.

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The following table summarizes certain operating data for Discontinued Operations (in millions).

	Years Ended December 31
	2007			2006			2005
Revenues	$	0.6		$	133.5		$	133.9
Loss before taxes		(5.7	)		(8.9	)		(198.7	)
(Loss) income from operations, net of taxes	$	(0.8	)	$	32.1		$	(0.5	)
Gain (loss) on disposal of segment, net of taxes		18.7			(70.9	)		(119.4	)
Net income (loss) from discontinued operations	$	17.9		$	(38.8	)	$	(119.9	)

In 2007, gain on disposal of segment primarily consisted of a $20.9 million reversal of accrued income taxes resulting from an enacted change in federal income tax regulations and the finalization of the tax effects of the Air sale. In 2006, loss on disposal of segment was comprised primarily of $60.3 million ($70.9 including tax effects) of losses realized on dispositions and in 2005, was comprised primarily of impairment charges of $196.4 million ($119.4 million after tax).

Results of discontinued operations reflect directly attributable revenues, ownership, operating, interest and SG&A expenses and income taxes. Results also reflect intercompany allocations for interest and certain SG&A expenses. Interest expense allocated was zero, $16.4 million and $26.7 million for 2007, 2006 and 2005, respectively. Interest was allocated consistent with GATX’s risk adjusted approach for continuing operations. SG&A allocated was zero, $6.1 million and $6.9 million for 2007, 2006 and 2005, respectively. SG&A was allocated based on management’s best estimate and judgment of the direct cost of support services provided to discontinued operations and amounts allocated approximate the amounts expected to be eliminated from continuing operations.

See Note 22 to the consolidated financial statements for additional information on discontinued operations.

BALANCE SHEET DISCUSSION

Assets

Assets of continuing operations were $4.7 billion at December 31, 2007, compared to $4.4 billion at December 31, 2006. Increases in operating assets were partially offset by decreases in cash, receivables and other assets.

In addition to assets recorded on its balance sheet, GATX utilizes approximately $1.2 billion of other assets, primarily railcars, which are financed with operating leases and therefore are not recorded on the balance sheet. The off balance sheet assets represent the estimated present value of GATX’s committed future operating lease payments.

The following table presents assets of continuing operations by segment as of December 31 (in millions):

	2007						2006
	On		Off				On		Off
	Balance		Balance				Balance		Balance
	Sheet		Sheet		Total		Sheet		Sheet		Total
Rail	$	3,768.2	$	1,230.1	$	4,998.3	$	3,365.6	$	1,313.0	$	4,678.6
Specialty		515.6		5.8		521.4		491.9		8.0		499.9
ASC		292.0		—		292.0		302.6		—		302.6
Other		149.8		—		149.8		254.7		—		254.7
	$	4,725.6	$	1,235.9	$	5,961.5	$	4,414.8	$	1,321.0	$	5,735.8

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Gross Receivables

Receivables of $434.5 million at December 31, 2007, including leveraged leases net of nonrecourse debt, decreased $106.6 million from December 31, 2006. The decrease reflected the early buyout of two finance leases for a total of $35.5 million and contractual finance lease payments and loan repayments at Specialty.

Allowance for Possible Losses

The purpose of the allowance is to provide an estimate of credit losses inherent in reservable assets. Reservable assets include rent and other receivables, loans and finance lease receivables. In addition to establishing loss estimates for known troubled accounts, this estimate involves consideration of historical loss experience, judgments about the impact of present economic conditions, collateral values, and the state of the markets in which GATX operates.

The following summarizes changes in GATX’s consolidated allowance for possible losses as of December 31 (in millions):

	2007			2006
Balance at the beginning of the year	$	9.6		$	12.7
Provision (reversal) for possible losses		0.1			(2.1	)
Charges to allowance		(1.3	)		(1.9	)
Recoveries and other, including foreign exchange adjustments		2.6			0.9
Balance at the end of the year	$	11.0		$	9.6

The allowance for possible losses of $11.0 million at December 31, 2007 increased $1.4 million from 2006 primarily due to the effect of changes in foreign exchange rates.

There were no material changes in estimation methods or assumptions for the allowance during 2007. GATX believes that the allowance is adequate to cover losses inherent in the gross receivables portfolio as of December 31, 2007. Since the allowance is based on judgments and estimates, it is possible that those judgments and estimates could change in the future, causing a corresponding change in the recorded allowance.

Operating Assets and Facilities

Net operating assets and facilities increased $480.2 million from 2006. The increase was primarily related to Rail investing $494.0 million in rail assets, Specialty investing $118.6 million, primarily in industrial equipment assets, and foreign exchange rate effects of $100.7 million. Partially offsetting the increase were Rail dispositions of $55.5 million, Specialty dispositions of $15.4 million and depreciation of $192.3 million.

Investments in Affiliated Companies

Investments in affiliated companies increased $25.9 million in 2007, primarily due to investment contributions to a marine joint venture at Specialty. Distributions of earnings and capital from affiliates were $93.4 million in 2007, approximating GATX’s share of 2007 affiliate earnings.

The following table shows GATX’s investment in affiliated companies by segment as of December 31 (in millions):

	2007		2006
Rail	$	135.4	$	109.7
Specialty		182.4		182.2
	$	317.8	$	291.9

See Note 8 to the consolidated financial statements for additional information about investments in affiliated companies.

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Debt

Total debt increased $145.0 million from the prior year, primarily related to the issuance of $242.8 million of commercial paper, partially offset by principal payments related to maturities and conversions of convertibles notes of $142.5 million and the repayment of $40.9 million of European debt. Subsequent to year end, $200 million of senior notes were issued for net proceeds of $197.6 million, which were substantially used to pay down commercial paper balances.

The following table summarizes the debt of GATX and its subsidiaries by major component, including off balance sheet debt, as of December 31, 2007 (in millions):

	Secured		Unsecured		Total
Commercial paper and borrowings under bank credit facilities	$	—	$	247.3	$	247.3
Convertible notes		—		106.8		106.8
Recourse debt		—		1,933.1		1,933.1
Capital lease obligations		72.5		—		72.5
Balance sheet debt		72.5		2,287.2		2,359.7
Recourse off balance sheet debt(a)		906.0		—		906.0
Nonrecourse off balance sheet debt(a)		329.9		—		329.9
	$	1,308.4	$	2,287.2	$	3,595.6

(a) Off balance sheet debt represents the estimated present value of assets leased in under operating leases and is equal to the value of off balance sheet assets.

CASH FLOW DISCUSSION

GATX generates a significant amount of cash from its operating activities and proceeds from its investment portfolio, which is used to service debt, pay dividends, and fund portfolio investments and capital additions.

Net Cash Provided by Operating Activities of Continuing Operations

Net cash provided by continuing operations of $339.8 million increased $46.5 million compared to 2006. The increase was primarily due to higher lease income and joint venture dividends and lower operating lease payments, partially offset by higher maintenance, other operating and SG&A expenses.

Portfolio Investments and Capital Additions

Portfolio investments and capital additions primarily consist of purchases of operating lease assets, investments in joint ventures, loans and capitalized asset improvements. Portfolio investments and capital additions of $640.8 million decreased $122.3 million from 2006, primarily attributable to ASC’s acquisition in 2006 of six marine vessels from Oglebay Norton Marine Services for $126.3 million. Rail’s investment volume of $494.0 million was $39.6 million lower than the prior year, and included approximately 6,000 railcars for its North American fleet and 1,100 railcars for its European fleet. Specialty’s investment volume of $141.0 million increased $46.9 from 2006 and included $109.6 million of industrial equipment and $18.3 million of marine assets. Other investments primarily reflect information technology activity, including systems expenditures that support GATX’s operations.

The following table presents portfolio investments and capital additions by segment (in millions):

	2007		2006		2005
Rail	$	494.0	$	533.6	$	402.9
Specialty		141.0		94.1		92.6
ASC		4.4		127.7		3.2
Other		1.4		7.7		4.5
	$	640.8	$	763.1	$	503.2

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Future portfolio investments and capital additions (excluding contractual commitments) will depend on market conditions and opportunities to acquire desirable assets.

Portfolio Proceeds

Portfolio proceeds primarily consist of loan and finance lease receipts, proceeds from asset remarketing and sales of securities, and capital distributions from affiliates. Portfolio proceeds of $246.8 million in 2007 increased $124.1 million from 2006. The increase was primarily due to higher proceeds from asset remarketing at Specialty and Rail and the maturity of debt securities in Europe.

Portfolio proceeds were as follows for the years ended December 31 (in millions):

	2007		2006		2005
Finance lease rents received, net of earned income and leveraged lease nonrecourse debt service	$	17.5	$	17.8	$	15.2
Loan principal received		19.4		18.8		47.3
Proceeds from asset remarketing		135.8		40.3		45.5
Proceeds from sales and maturities of investment securities		42.3		7.2		29.9
Capital distributions from affiliates		31.8		38.6		28.6
	$	246.8	$	122.7	$	166.5

Other Investing Activity

In 2006, Rail exercised purchase options on two operating leases covering a total of 4,700 railcars for an aggregate cost of $260.9 million. In 2005, the Company completed a sale-leaseback transaction for approximately 2,900 of its railcars (net book value of $170.0 million) for net proceeds of $201.3 million. The transaction produced a gain of $31.3 million, which was deferred and is being amortized as a component of operating lease expense over the 21-year term of the resulting operating lease. Proceeds from other asset sales primarily consist of scrapping of railcars, sales of assets held for sale, and dispositions of other assets.

Net Cash used in Financing Activities of Continuing Operations

Net cash used in financing activities of continuing operations was $246.5 million in 2007, compared to net cash provided of $112.6 million in 2006. Repayments of debt of $204.7 million in 2007 were primarily attributable to the principal paid upon maturity of the 2002, 7.5% convertible notes. Proceeds from debt primarily consisted of $242.8 million of commercial paper issuances. The stock repurchase program was also fully executed in 2007, with 6.3 million shares of common stock reacquired for $300.2 million.

Cash Flows of Discontinued Operations

Net cash provided by discontinued operations of $181.8 million in 2007, consisted primarily of $227.1 million of proceeds received from the disposition of the Air segment, partially offset by $33.8 million of allocated federal income tax payments.

Liquidity and Capital Resources

General

GATX funds its investments and meets its debt, lease and dividend obligations through available cash balances, cash generated from continuing operating activities, portfolio proceeds (including proceeds from asset sales), commercial paper issuances, committed revolving credit facilities and the issuance of secured and unsecured debt. GATX utilizes both domestic and international capital markets and banks for its debt financing needs.

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Principal sources and uses of cash from continuing operations were as follows for the years ended December 31 (in millions):

	2007			2006			2005
Principal sources of cash
Net cash provided by operating activities	$	339.8		$	293.3		$	197.4
Portfolio proceeds		246.8			122.7			166.5
Proceeds from sale-leaseback		—			—			201.3
Proceeds from other asset sales		22.3			24.8			46.0
Proceeds from issuance of debt		302.3			572.4			549.5
	$	911.2		$	1,013.2		$	1,160.7
Principal uses of cash
Portfolio investments and capital additions	$	(640.8	)	$	(763.1	)	$	(503.2	)
Stock repurchases		(300.2	)		—			—
Repayments of debt		(204.7	)		(440.5	)		(666.8	)
Purchase of leased in assets		—			(260.9	)		—
Payments on capital lease obligations		(6.5	)		(10.8	)		(16.8	)
Cash dividends		(47.6	)		(43.4	)		(40.0	)
	$	(1,199.8	)	$	(1,518.7	)	$	(1,226.8	)

Additionally, net cash from discontinued operations, including proceeds from the sale of Air assets in 2007 and 2006, was $181.8 million, $558.7 million and $97.3 million in 2007, 2006 and 2005, respectively.

Credit Facilities

In the second quarter of 2007, GATX’s senior unsecured revolving credit facility was amended and restated. The amendment and restatement of the facility extended the maturity from June of 2010 to May of 2012 and increased the facility amount from $525 million to $550 million. The net worth covenant was eliminated.

At December 31, 2007, availability under the credit facility was $290.9 million, with $242.8 million of commercial paper outstanding and $16.3 million of letters of credit issued, both backed by the facility. Commercial paper issuances are the primary sources of cash used to fund daily operations. This short-term debt is paid down using cash flow from operations, portfolio proceeds or proceeds from long-term debt issuances. GATX also has revolving lines of credit totaling $45.2 million in Europe. At December 31, 2007, availability under these lines of credit was $40.9 million.

Restrictive Covenants

The revolving credit facility contains various restrictive covenants, including requirements to maintain a fixed charge coverage ratio and an asset coverage test. GATX’s ratio of earnings to fixed charges, as defined in the credit facility, was 2.1x for the period ended December 31, 2007, in excess of the minimum covenant ratio of 1.2x. At December 31, 2007, GATX was in compliance with all covenants and conditions of the credit facility.

The indentures for GATX’s public debt also contain restrictive covenants, including limitations on loans, advances or investments in related parties and dividends it may distribute. Some of the indentures also contain limitation on lien provisions that limit the amount of secured indebtedness that GATX may incur, subject to several exceptions, including those permitting an unlimited amount of purchase money indebtedness and nonrecourse indebtedness. In addition to the other specified exceptions, GATX would be able to incur liens securing a maximum of $871.2 million of additional indebtedness as of December 31, 2007, based on the most restrictive limitation on liens provision. At December 31, 2007, GATX was in compliance with all covenants and conditions of the indentures.

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The loan agreements for certain of GATX’s wholly owned European subsidiaries (collectively, “GRE”) also contain restrictive covenants, including leverage and cash flow covenants specific to those subsidiaries, restrictions on making loans and limitations on the ability of those subsidiaries to repay loans to certain related parties (including GATX) and to pay dividends to GATX. The covenants relating to loans and dividends effectively limit the ability of GRE to transfer funds to GATX. At December 31, 2007, the maximum amount that GRE could transfer to GATX without violating its covenants was $25.9 million, implying that $349.4 million of subsidiary net assets were restricted. Restricted net assets are defined as equity less 50% of free cash flow. At December 31, 2007, GRE was in compliance with all covenants and conditions of these loan agreements.

Another subsidiary’s financing, guaranteed by GATX, contains various restrictive covenants, including requirements for GATX to maintain a defined net worth and a fixed charge coverage ratio. This fixed charge coverage ratio covenant is less restrictive than that contained in the revolving credit facility.

GATX does not anticipate any covenant violations nor does it anticipate that any of these covenants will restrict its operations or its ability to procure additional financing.

Debt Financing

During the third quarter 2007, GATX filed a shelf registration statement to issue debt securities and pass-through certificates. The registration statement is effective for three years without limit on the amount of issuance. Subsequent to year end, during February 2008, GATX issued $200 million of senior unsecured debt with a 6.0% coupon and a maturity date of February 15, 2018.

See Note 13 to the consolidated financial statements for detailed information on GATX’s credit facilities, debt obligations and related restrictive covenants.

Credit Ratings

The availability of GATX’s funding options may be affected by certain factors, including the global capital market environment and outlook as well as GATX’s financial performance. GATX’s access to capital markets at competitive rates is dependent on its credit rating and rating outlook, as determined by rating agencies such as Standard & Poor’s (“S&P”) and Moody’s Investor Service (“Moody’s”). As of December 31, 2007, GATX’s long-term unsecured debt was rated BBB+ by S&P and Baa1 by Moody’s. GATX’s short-term unsecured debt was rated A-2 by S&P and P-2 by Moody’s. GATX’s rating outlook from both agencies was stable.

2008 Liquidity Position

GATX expects that it will be able to meet its contractual obligations for 2008 through a combination of projected cash from continuing operations, portfolio proceeds and its revolving credit facilities, as well as available cash.

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Off Balance Sheet Arrangements and Other Contingencies

Contractual Commitments

At December 31, 2007, GATX’s contractual commitments, including debt maturities, lease payments, and unconditional purchase obligations were (in millions):

	Payments Due by Period
	Total		2008		2009		2010		2011		2012		Thereafter
Recourse debt(a)	$	1,927.5	$	222.7	$	400.8	$	256.5	$	223.4	$	352.1	$	472.0
Convertible debt		106.8		—		—		—		—		—		106.8
Commercial paper and credit facilities		247.3		247.3		—		—		—		—		—
Capital lease obligations		94.6		12.4		12.7		17.3		21.7		4.7		25.8
Operating leases — recourse		1,328.2		127.7		123.0		128.3		113.3		113.1		722.8
Operating leases — nonrecourse		483.3		43.8		41.0		42.2		42.2		40.7		273.4
Unconditional purchase obligations		545.2		323.7		198.8		21.1		0.8		0.8		—
	$	4,732.9	$	977.6	$	776.3	$	465.4	$	401.4	$	511.4	$	1,600.8

(a) Excludes the market value adjustment for debt with qualifying hedges of $5.6 million, which does not represent a contractual commitment with a fixed amount or maturity date.

Convertible Securities

In August 2003, GATX issued $125.0 million, 5.0% senior unsecured notes, due in August 2023, which are convertible into GATX common stock. As of December 31, 2007, $106.8 million of the notes were outstanding and convertible at $24.81 per share. GATX has the right, beginning in August 2008, to redeem the notes at 100% of the principal amount plus accrued and unpaid interest. If GATX provides notice of redemption, the holders of the notes may elect to exercise their conversion privilege. Upon conversion, GATX may elect, at its option, to deliver cash, shares of GATX common stock or any combination thereof. See Note 13 to the consolidated financial statements for additional information.

Unconditional Purchase Obligations

At December 31, 2007, GATX’s unconditional purchase obligations of $545.2 million were primarily for railcars to be acquired during 2008 and 2009 (in millions):

	Payments Due by Period
	Total		2008		2009		2010		2011		2012		Thereafter
Rail	$	483.6	$	262.1	$	198.8	$	21.1	$	0.8	$	0.8	$	—
Specialty		61.6		61.6		—		—		—		—		—
	$	545.2	$	323.7	$	198.8	$	21.1	$	0.8	$	0.8	$	—

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Contractual Cash Receipts

The Company’s contractual cash receipts arising from minimum future lease payments from finance leases, net of debt payments for leveraged leases, and minimum future rental receipts from noncancelable operating leases as of December 31, 2006 were as follows (in millions):

	Contractual Cash Receipts by Period
	Total		2008		2009		2010		2011		2012		Thereafter
Finance leases	$	484.8	$	37.6	$	40.9	$	36.5	$	38.9	$	29.6	$	301.3
Operating leases		2,954.1		791.0		598.9		475.2		330.2		227.9		530.9
Total	$	3,438.9	$	828.6	$	639.8	$	511.7	$	369.1	$	257.5	$	832.2

Commercial Commitments

In connection with certain investments or transactions, GATX has entered into various commercial commitments, such as guarantees and standby letters of credit, which could require performance in the event of demands by third parties. Similar to GATX’s balance sheet investments, these guarantees expose GATX to credit, market and equipment risk; accordingly, GATX evaluates its commitments and other contingent obligations using techniques similar to those used to evaluate funded transactions.

GATX’s commercial commitments for continuing operations at December 31, 2007 were (in millions):

	Amount of Commitment Expiration by Period
	Total		2008		2009		2010		2011		2012		Thereafter
Affiliate guarantees	$	20.7	$	3.0	$	2.1	$	2.7	$	3.1	$	2.3	$	7.5
Asset residual value guarantees		121.7		20.5		28.3		5.2		6.6		17.6		43.5
Lease payment guarantees		68.8		3.6		4.1		4.0		4.1		4.0		49.0
Other guarantees(a)		77.8		—		—		—		—		—		—
Guarantees		289.0		27.1		34.5		11.9		13.8		23.9		100.0
Standby letters of credit and bonds		17.7		17.7		—		—		—		—		—
	$	306.7	$	44.8	$	34.5	$	11.9	$	13.8	$	23.9	$	100.0

(a) No specific maturity date.

Affiliate guarantees generally involve guaranteeing repayment of the financing utilized to acquire or lease in assets being leased by an affiliate to customers, and are in lieu of making direct equity investments in the affiliate. GATX is not aware of any event of default which would require it to satisfy these guarantees, and expects the affiliates to generate sufficient cash flow to satisfy their lease and loan obligations.

Asset residual value guarantees represent GATX’s commitment to third parties that an asset or group of assets will be worth a specified amount at the end of a lease term. Approximately 39% of the Company’s asset residual value guarantees are related to rail equipment. Based on known facts and current market conditions, management does not believe that the asset residual value guarantees will result in any negative financial impact to GATX. Historically, gains associated with the residual value guarantees have exceeded any losses incurred. GATX believes these asset residual value guarantees will likely generate future income in the form of fees and residual sharing proceeds.

Lease payment guarantees represent GATX’s guarantees to financial institutions of finance and operating lease payments to unrelated parties in exchange for a fee. In the first quarter of 2007, GATX provided a guarantee for future lease payments under a lease agreement assumed by the buyer of the Air business. The guarantee covers remaining lease payments totaling $49.1 million payable during the years 2008 — 2019.

Other guarantees consists of GATX’s indemnification of Airbus S.A.S. (“Airbus”) for amounts Airbus may be required to pay under certain specified circumstances to GATX Flightlease Aircraft Ltd., a joint venture partially

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owned by GATX (“GFAC”), in connection with an aircraft purchase contract entered into by GFAC and Airbus in 2001. GATX’s indemnification obligation is capped at approximately $77.8 million. No liability has been recorded with respect to this indemnification as GATX believes that the likelihood of having to perform under the indemnity is remote. The aircraft purchase contract, and other agreements relating thereto, have been the subject of various litigation proceedings that are described in Note 18 to the consolidated financial statements.

GATX and its subsidiaries are also parties to standing letters of credit and bonds primarily related to workers’ compensation and general liability insurance coverages. No material claims have been made against these obligations. At December 31, 2007, GATX does not expect any material losses to result from these off balance sheet instruments because performance is not anticipated to be required.

Defined Benefit Plan Contributions

In 2007, GATX contributed $7.4 million to its funded and unfunded defined benefit plans, including pension and other post retirement benefits, and in 2008, the Company expects to make contributions of approximately $7.9 million. Additional contributions will be dependent on a number of factors including plan asset investment returns and actuarial experience. Subject to the impact of these factors, the Company may make additional material plan contributions.

Stock Repurchases

On January 17, 2007, the Company’s Board of Directors authorized a $300 million share repurchase program, which was completed in August 2007. On January 23, 2008, the Company’s Board of Directors authorized a $200 million share repurchase program expected to be completed in 2008.

Critical Accounting Policies and Estimates

The preparation of the consolidated financial statements in conformity with generally accepted accounting principles (“GAAP”) requires management to use judgment in making estimates and assumptions that affect reported amounts of assets, liabilities, revenues, expenses and related disclosures. The Company regularly evaluates its estimates and judgments based on historical experience and other relevant factors and circumstances. Actual results may differ from these estimates under different assumptions or conditions.

The Company considers the following as critical accounting policies:

•  Operating lease assets — Operating assets, including assets acquired under capital lease, are stated principally at historical cost and are depreciated using the straight-line method to an estimated residual value. Since the majority of GATX’s assets have useful lives in excess of 30 years, the residual value requires a projection of value significantly in the future. GATX periodically reviews the appropriateness of depreciable lives and residual value estimates based on physical and economic factors, as well as existing market conditions. Changes in these estimates could result in a change in depreciation expense.

•  Impairment of long-lived assets — In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-lived Assets, GATX performs a review for impairment of long-lived assets, such as operating assets and facilities, whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. GATX measures recoverability of assets to be held and used by comparing the carrying amount of an asset to estimated future net cash flows expected to be generated by it. Estimated future cash flows are based on a number of assumptions including lease rates, lease term, operating costs, life of the asset and disposition proceeds. If such assets are determined to be impaired, the impairment loss to be recognized is measured by the amount by which the carrying amount of the assets exceeds estimated fair value. Fair value is based on internal estimates supplemented with independent appraisals and/or market comparables when available and appropriate. Assets to be disposed of are reported at the lower of the carrying amount or estimated fair value less selling costs.

•  Impairment of investments in affiliated companies — In accordance with Accounting Principles Board Opinion (“APB”) No. 18, The Equity Method of Accounting for Investments in Common Stock (“APB 18”),

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GATX reviews the carrying amount of its investments in affiliates annually, or whenever events or changes in circumstances indicate that a decline in value may have occurred.

If management determines that indicators of impairment are present for an investment, an analysis is performed to estimate the fair value of that investment. Management defines fair value, for purposes of this policy, as the price that would be received for an investment in a current transaction between a willing buyer and seller. While quoted prices in active markets provide the best evidence of fair value, an active market does not exist for the majority of our affiliate investments. Thus, an estimate of their fair value must be made. Some examples of acceptable valuation techniques that GATX may use to estimate fair value are discounted cash flows at the investee level, capitalized earnings or the present value of expected distributable cash from the investee. Additionally, price/earnings ratios based on comparable businesses may also be acceptable in certain circumstances. Other valuation techniques that are appropriate for the particular circumstances of the affiliate and for which sufficient data are available may also be used.

Once an estimate of fair value is made, it is compared to the investment’s carrying value. If the investment’s estimated fair value is less than its carrying value, then the investment is deemed impaired. If an investment is deemed impaired, then a determination is made as to whether the impairment is other-than-temporary. Factors that management considers in making this determination include expected operating results for the near future, the length of the economic life cycle of the underlying assets of the investee and the ability of GATX to hold the investment through the end of the underlying assets’ useful life. Anticipated actions that are probable of being taken by investee management that may improve its business prospects are also considered.

If management reasonably determines an investment to be only temporarily impaired, no impairment loss is recorded. Alternatively, if management determines that an investment is impaired on an other-than-temporary basis, a loss equal to the difference between the estimated fair value of the investment and its carrying value is recorded in the period of identification.

•  Impairment of goodwill — In accordance with SFAS No. 142, Goodwill and Other Intangible Assets (“SFAS 142”), GATX reviews the carrying amount of its recorded goodwill annually or in interim periods if circumstances indicate a potential impairment. The impairment review is performed at the reporting unit level, which is one level below an operating segment. The goodwill impairment test is a two-step process and requires management to make certain judgments in determining what assumptions to use in the calculation. The first step in the process consists of estimating the fair value of each reporting unit based on a discounted cash flow model using revenue and profit forecasts. Management then compares its estimate of the fair value of the reporting unit with the reporting unit’s carrying amount, which includes goodwill. If the estimated fair value is less than the carrying amount, an additional step is performed that compares the implied fair value of the reporting unit’s goodwill with the carrying amount of the goodwill. The determination of a reporting unit’s implied fair value of the goodwill requires management to allocate the estimated fair value of the reporting unit to the assets and liabilities of the reporting unit. Any unallocated fair value represents the implied fair value of the goodwill. To the extent that the carrying amount of the goodwill exceeds its implied fair value, an impairment loss is recorded in the period of identification.

•  Pension and Post-retirement Benefits Assumptions — GATX’s pension and other post-retirement benefit obligations and related costs are calculated using actuarial assumptions. Two critical assumptions, the discount rate and the expected return on plan assets, are important elements of plan expense and liability measurement. Other assumptions involve demographic factors such as retirement, mortality, turnover, health care cost trends and rate of compensation increases.

The discount rate is used by GATX to calculate the present value of expected future pension and post-retirement cash flows as of the measurement date. The guideline for establishing this rate is high-quality, long-term bond rates. The expected long-term rate of return on plan assets is based on current and expected asset allocations, as well as historical and expected returns on various categories of plan assets. GATX evaluates these critical assumptions annually and makes adjustments as required in accordance with changes in underlying market conditions, valuation of plan assets, or demographics. As a result, changes in these assumptions may increase or decrease periodic benefit plan expense as well as the carrying value of benefit

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plan assets or obligations. See Note 16 to the consolidated financial statements for additional information regarding these assumptions.

•  Share-based Compensation — GATX provides equity awards to certain employees and directors in the form of stock options, stock appreciation rights (SARs), restricted stock, performance share awards and phantom stock awards. Compensation expense for these awards is recognized on a pro-rata basis over the applicable vesting period based on the award’s grant date fair value. GATX uses the Black-Scholes options valuation model to calculate the grant date fair value of stock options and SARs. This model requires the input of assumptions, some of which are highly subjective, which will affect the amount of compensation expense recorded. Assumptions used in the model include expected stock price volatility (based on the historical volatility of GATX’s stock price), the risk free interest rate (based on the treasury yield curve), the expected life of the equity award (based on historical exercise patterns and post-vesting termination behavior) and the expected dividend equivalents to be paid during the estimated life of the equity award (since GATX’s options/SARs are dividend participating). Changes in the assumptions may impact the amount of compensation expense. The fair value of other equity awards is based on GATX’s stock price on the grant date. See Note 21 to the consolidated financial statements for additional information on share-based compensation.

•  Income Taxes — GATX evaluates the need for a deferred tax asset valuation allowance by assessing the likelihood of whether deferred tax assets, including net operating loss carryforward benefits, will be realized in the future. The assessment of whether a valuation allowance is required involves judgment, including the forecast of future taxable income and the evaluation of tax planning initiatives, if applicable.

Taxes have not been provided on undistributed earnings of foreign subsidiaries as the Company has historically maintained that undistributed earnings of its foreign subsidiaries and affiliates were intended to be permanently reinvested in those foreign operations. If, in the future, these earnings are repatriated to the U.S., or if the Company expects such earnings will be remitted in the foreseeable future, a provision for additional taxes would be required.

GATX’s operations are subject to taxes in the U.S., various states and foreign countries and as result, may be subject to audit in all of these jurisdictions. Tax audits may involve complex issues and disagreements with taxing authorities could require several years to resolve. GATX adopted FIN 48 effective January 1, 2007. FIN 48 defines criteria that an individual tax position must meet for any tax benefit to be recognized in an enterprise’s financial statements. Under FIN 48, GATX must presume that uncertain income taxes positions will be examined by the relevant tax authority and determine whether it is more-likely-than-not that the income tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. An income tax position that meets the more-likely-than-not recognition threshold is then evaluated to determine the probable amount of benefit recognized in the financial statements. Establishing accruals for uncertain tax benefits requires management to make estimates and assessments with respect to the ultimate outcome of tax audit issues and amounts recorded in the financial statements. The ultimate resolution of such uncertain tax benefits may differ from management’s estimate, potentially impacting the Company’s results of operations, cash flows, or financial position.

See Note 15 to the consolidated financial statements for additional information on income taxes.

New Accounting Pronouncements

See Note 3 to the consolidated financial statements for a summary of new accounting pronouncements that may impact GATX’s business.

Non-GAAP Financial Measures

This report includes certain financial performance measures computed using non-Generally Accepted Accounting Principles (“GAAP”) components as defined by the Securities and Exchange Commission (“SEC”). These measures are return on equity, return on assets, income from continuing operations excluding

41

tax benefits and diluted earnings per share excluding tax benefits. As required under SEC rules, GATX has provided a reconciliation of those non-GAAP components to the most directly comparable GAAP components. Financial performance measures disclosed in this report are meant to provide additional information and insight into the historical operating results and financial position of the business. Management uses these performance measures to assist in analyzing GATX’s underlying financial performance from period to period and to establish criteria for compensation decisions. These measures are not in accordance with, or a substitute for, GAAP and may be different from, or inconsistent with, non-GAAP financial measures used by other companies.

GLOSSARY OF KEY TERMS

•  Non-GAAP Financial Measures — Numerical or percentage based measures of a company’s historical performance, financial position or liquidity calculated using a component different from that presented in the financial statements as prepared in accordance with GAAP.

•  Off Balance Sheet Assets — Assets, primarily railcars, which are financed with operating leases and therefore not recorded on the balance sheet. GATX estimates the off balance sheet asset amount by calculating the present value of committed future operating lease payments using the interest rate implicit in each lease.

•  On Balance Sheet Assets — Total assets as reported on the balance sheet excluding assets of discontinued operations.

•  Return on Equity — Income from continuing operations divided by average total shareholders’ equity.

•  Return on Assets — Income from continuing operations divided by average total on and off balance sheet assets.

•  Return on Equity Excluding Tax Benefits — Income from continuing operations excluding tax benefits divided by average total shareholders equity.

•  Return on Assets Excluding Tax Benefits — Income from continuing operations excluding tax benefits divided by average total on and off balance sheet assets.

Reconciliation of the Non-GAAP components used in the computation of certain Financial Measures (in millions):

	2007		2006		2005		2004
Balance Sheet Assets as Reported	$	4,725.6	$	4,647.0	$	5,247.3	$	5,613.6
Less: Discontinued Operations		—		232.2		1,706.8		2,057.0
Consolidated On Balance Sheet Assets	$	4,725.6	$	4,414.8	$	3,540.5	$	3,556.6
Off Balance Sheet Assets		1,235.9		1,321.0		1,453.5		1,370.0
Total On and Off Balance Sheet Assets(a)	$	5,961.5	$	5,735.8	$	4,994.0	$	4,926.6
Shareholders’ Equity	$	1,149.5	$	1,167.7	$	1,026.1	$	1,084.3

	2007			2006			2005
Income from Continuing Operations as Reported	$	185.8		$	151.4		$	106.0
Deferred Tax Adjustments(b)		(20.1	)		(5.9	)		—
Income from Continuing Operations Excluding Tax Benefits	$	165.7		$	145.5		$	106.0
Diluted Earnings Per Share as Reported	$	3.44		$	2.65		$	1.94
Deferred Tax Adjustments(b)		(0.36	)		(0.10	)		—
Diluted Earnings Per Share Excluding Tax Benefits	$	3.08		$	2.55		$	1.94

(a) Total on and off balance sheet assets are used in the calculation of return on assets which is income from continuing operations divided by average total on and off balance sheet assets.

42

(b) Adjustments to deferred income taxes resulting from reductions in foreign statutory rates. In 2007, rate reductions were enacted in Germany, Canada, and the U.K. and in 2006, a rate reduction was enacted in Canada.

Item 7A.   Quantitative and Qualitative Disclosures About Market Risk

In the normal course of business, GATX is exposed to interest rate and foreign currency exchange rate risks that could impact results of its operations. To manage these risks, GATX, pursuant to authorized policies, may enter into certain derivative transactions, principally interest rate swaps, Treasury rate locks, options and currency forwards and swaps. These instruments and other derivatives are entered into only for hedging existing underlying exposures. GATX does not hold or issue derivative financial instruments for speculative purposes.

Interest Rate Exposure — GATX’s interest expense is affected by changes in interest rates, primarily LIBOR, as a result of its use of variable rate debt instruments. GATX generally manages its variable rate debt instruments in relation to its variable rate investments. Based on GATX’s variable rate debt instruments at December 31, 2007, and giving affect to related derivatives, a hypothetical increase in market interest rates of 100 basis points would cause an increase in after-tax interest expense of $4.2 million in 2008. Comparatively, at December 31, 2006, a hypothetical 100 basis point increase in interest rates would have resulted in a $2.9 million increase in after-tax interest expense in 2007. The increase in sensitivity to interest rates at December 31, 2007, is primarily due to a $242.8 million increase in commercial paper outstanding.

Functional Currency/Reporting Currency Exchange Rate Exposure — GATX conducts operations in foreign countries, principally Poland, Germany, Austria and Canada. As a result, changes in the value of the U.S. dollar as compared to foreign currencies, primarily the Canadian dollar, Euro and Polish zloty, would affect GATX’s reported earnings when they are converted to U.S. dollars upon consolidation. Based on earnings from continuing operations in 2007, a uniform and hypothetical 10% strengthening in the U.S. dollar versus applicable foreign currencies would decrease after-tax income from continuing operations in 2008 by approximately $7.2 million. Comparatively, at December 31, 2006, a uniform and hypothetical 10% increase in the U.S. dollar versus applicable foreign currencies would have resulted in a decrease in after-tax income from continuing operations in 2007 of approximately $7.3 million.

The interpretation and analysis of the results from the hypothetical changes to interest rates and currency exchange rates should not be considered in isolation; such changes would typically have corresponding offsetting effects. For example, offsetting effects are present to the extent that floating rate debt is associated with floating rate assets, including cash and cash equivalents. Changes in interest rates and foreign exchange rates can also have an effect on the demand and relative price for services provided by GATX domestically and internationally.

Equity Price Exposure — GATX also has equity price risk inherent in stock and warrants of companies in which it has invested. At December 31, 2007, the fair values of GATX’s stock and warrant investments were $1.4 million and $2.2 million, respectively. The hypothetical change in value resulting from a 10% sensitivity test would not be material to GATX’s results of operations.

43

Item 8.   Financial Statements and Supplementary Data.

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of GATX Corporation

We have audited the accompanying consolidated balance sheets of GATX Corporation and subsidiaries as of December 31, 2007 and 2006, and the related consolidated statements of operations, changes in shareholders’ equity, cash flows, and comprehensive income (loss) for each of the three years in the period ended December 31, 2007. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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. 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 financial statements referred to above present fairly, in all material respects, the consolidated financial position of GATX Corporation and subsidiaries at December 31, 2007 and 2006, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2007, in conformity with U.S. generally accepted accounting principles.

As discussed in Note 2 to the financial statements, in 2007 the Company changed its method of accounting for leveraged lease transactions and unrecognized tax benefits and in 2006 the Company changed its method of accounting for pension and other post-retirement benefits and share-based compensation and adopted Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), GATX Corporation’s internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 29, 2008 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Chicago, Illinois

February 29, 2008

44

GATX CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	December 31
	2007			2006
	In millions
Assets
Cash and Cash Equivalents	$	104.4		$	196.2
Restricted Cash		44.7			48.0
Receivables
Rent and other receivables		91.1			102.5
Finance leases		334.6			402.6
Loans		8.8			36.0
Less: allowance for possible losses		(11.0	)		(9.6	)
		423.5			531.5
Operating Assets and Facilities
Rail		4,908.5			4,352.4
Specialty		209.7			113.6
ASC		365.6			361.2
Other		—			—
Less: allowance for depreciation		(1,974.4	)		(1,798.0	)
		3,509.4			3,029.2
Investments in Affiliated Companies		317.8			291.9
Goodwill		104.4			92.8
Other Assets		221.4			225.2
Assets of Discontinued Operations		—			232.2
Total Assets	$	4,725.6		$	4,647.0
Liabilities and Shareholders’ Equity
Accounts Payable and Accrued Expenses	$	119.6		$	158.9
Debt
Commercial paper and borrowings under bank credit facilities		247.3			22.4
Recourse		2,039.9			2,138.1
Nonrecourse		—			2.7
Capital lease obligations		72.5			51.5
		2,359.7			2,214.7
Deferred Income Taxes		722.8			757.4
Other Liabilities		374.0			348.3
Total Liabilities		3,576.1			3,479.3
Shareholders’ Equity
Preferred stock ($1.00 par value, 5,000,000 shares authorized, 18,216 and 19,008 shares of Series A and B $2.50 Cumulative Convertible Preferred Stock issued and outstanding as of December 31, 2007 and 2006, respectively, aggregate liquidation preference of $1.1 million)			*			*
Common stock ($0.625 par value, 120,000,000 authorized, 62,171,716 and 59,946,664 shares issued and 47,899,897 and 51,997,154 shares outstanding as of December 31, 2007 and 2006, respectively)		38.7			37.4
Additional paid in capital		514.3			474.3
Retained earnings		939.0			787.9
Accumulated other comprehensive income (loss)		86.2			(3.4	)
Treasury stock at cost (14,271,819 and 7,949,510 shares at December 31, 2007 and 2006, respectively)		(428.7	)		(128.5	)
Total Shareholders’ Equity		1,149.5			1,167.7
Total Liabilities and Shareholders’ Equity	$	4,725.6		$	4,647.0

* Less than $0.1 million.

The accompanying notes are an integral part of these consolidated financial statements.

45

GATX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

	Year Ended December 31
	2007		2006			2005
	In millions, except per share data
Gross Income
Lease income	$	895.2	$	826.2		$	763.2
Marine operating revenue		228.7		205.6			135.7
Interest income on loans		3.9		3.6			9.6
Asset remarketing income		61.4		47.6			41.4
Fees		2.4		4.9			5.1
Other income		61.2		65.1			74.4
Revenues		1,252.8		1,153.0			1,029.4
Share of affiliates’ earnings		93.2		76.1			73.7
Total Gross Income		1,346.0		1,229.1			1,103.1
Ownership Costs
Depreciation		191.4		163.3			142.8
Interest expense, net		127.9		129.2			105.8
Operating lease expense		155.8		166.6			180.0
Total Ownership Costs		475.1		459.1			428.6
Other Costs and Expenses
Maintenance expense		236.1		214.1			205.5
Marine operating expenses		172.7		147.5			96.9
Selling, general and administrative		158.7		146.7			141.0
Asset impairment charges		2.3		5.5			6.2
Other		42.5		28.7			52.3
Total Other Costs and Expenses		612.3		542.5			501.9
Income from Continuing Operations before Income Taxes		258.6		227.5			172.6
Income Taxes		72.8		76.1			66.6
Income from Continuing Operations		185.8		151.4			106.0
Income (Loss) from Discontinued Operations, net of taxes		17.9		(38.8	)		(119.9	)
Net Income (Loss)	$	203.7	$	112.6		$	(13.9	)
Per Share Data
Basic:
Income from continuing operations	$	3.73	$	2.97		$	2.12
Income (Loss) from discontinued operations		0.36		(0.76	)		(2.40	)
Total	$	4.09	$	2.21		$	(0.28	)
Average number of common shares		49.9		51.0			50.1
Diluted:
Income from continuing operations	$	3.44	$	2.65		$	1.94
Income (Loss) from discontinued operations		0.32		(0.63	)		(1.96	)
Total	$	3.76	$	2.02		$	(0.02	)
Average number of common shares and common share equivalents		55.4		62.1			61.0
Dividends declared per common share	$	0.96	$	0.84		$	0.80

The accompanying notes are an integral part of these consolidated financial statements.

46

GATX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended December 31
	2007			2006			2005
	In millions
Operating Activities
Net income (loss)	$	203.7		$	112.6		$	(13.9	)
Less: Income (loss) from discontinued operations		17.9			(38.8	)		(119.9	)
Income from continuing operations		185.8			151.4			106.0
Adjustments to reconcile income from continuing operations to net cash provided by operating activities of continuing operations:
Gains on sales of assets and securities		(55.0	)		(22.3	)		(41.0	)
Depreciation		200.8			173.7			152.8
Provision (reversal) for possible losses		0.1			(2.1	)		(5.6	)
Asset impairment charges		2.3			5.5			6.2
Deferred income taxes		58.1			60.9			42.3
Share of affiliates’ earnings, net of dividends		(36.3	)		(39.9	)		(33.5	)
(Increase) decrease in recoverable income taxes		(8.7	)		(0.9	)		8.7
Decrease in operating lease payable		(6.7	)		(16.5	)		(17.2	)
Defined benefit plans		(2.3	)		(0.8	)		(6.9	)
Other		1.7			(15.7	)		(14.4	)
Net cash provided by operating activities of continuing operations		339.8			293.3			197.4
Investing Activities
Additions to operating assets, net of nonrecourse financing for leveraged leases, and facilities		(618.4	)		(733.7	)		(404.3	)
Loans extended		(7.0	)		(19.2	)		—
Investments in affiliates		(12.0	)		(8.2	)		(24.9	)
Other		(3.4	)		(2.0	)		(74.0	)
Portfolio investments and capital additions		(640.8	)		(763.1	)		(503.2	)
Purchases of leased in assets		—			(260.9	)		—
Portfolio proceeds		246.8			122.7			166.5
Proceeds from sale-leaseback		—			—			201.3
Proceeds from sales of other assets		22.3			24.8			46.0
Net decrease in restricted cash		3.3			0.6			6.4
Other		—			(0.5	)		5.3
Net cash used in investing activities of continuing operations		(368.4	)		(876.4	)		(77.7	)
Financing Activities
Proceeds from issuances of debt (original maturities longer than 90 days)		77.8			572.4			549.5
Repayments of debt (original maturities longer than 90 days)		(204.7	)		(405.8	)		(654.0	)
Net increase (decrease) in debt with original maturities of 90 days or less		224.5			(34.7	)		(12.8	)
Payments on capital lease obligations		(6.5	)		(10.8	)		(16.8	)
Stock repurchases		(300.2	)		—			—
Employee exercises of stock options		21.9			31.3			23.6
Cash dividends		(47.6	)		(43.4	)		(40.0	)
Derivative settlements		(20.7	)		3.6			(22.5	)
Excess tax benefits from share-based compensation		9.0			—			—
Net cash (used in) provided by financing activities of continuing operations		(246.5	)		112.6			(173.0	)
Effect of Exchange Rates on Cash and Cash Equivalents		1.5			2.0			(1.4	)
Cash Flows of Discontinued Operations (see Note 22)
Net cash (used in) provided by operating activities		(48.1	)		91.4			97.0
Net cash provided by investing activities		229.9			1,263.3			82.7
Net cash used in financing activities		—			(796.0	)		(82.4	)
Net (decrease) increase in cash and cash equivalents during the period		(91.8	)		90.2			42.6
Cash and Cash Equivalents at beginning of period		196.2			106.0			63.4
Cash and Cash Equivalents at end of period	$	104.4		$	196.2		$	106.0

The accompanying notes are an integral part of these consolidated financial statements.

47

GATX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

	December 31
	2007			2006			2005			2007			2006			2005
	Dollars			Dollars			Dollars			Shares			Shares			Shares
	In millions
Preferred Stock
Balance at beginning of period	$	*		$	*		$	*			*			*			*
Conversion of preferred stock into common stock		*			*			*			*			*			*
Balance at end of period		*			*			*			*			*			*
Common Stock
Balance at beginning of period		37.4			36.5			35.9			60.0			58.6			57.5
Issuance of common stock		1.3			0.9			0.6			2.2			1.4			1.1
Conversion of preferred stock into common stock		*			*			*			—			—			—
Balance at end of period		38.7			37.4			36.5			62.2			60.0			58.6
Treasury Stock
Balance at beginning of period		(128.5	)		(128.5	)		(128.6	)		(7.9	)		(7.9	)		(7.9	)
(Acquisition) issuance of common stock		(300.2	)		—			0.1			(6.3	)		—			—
Balance at end of period		(428.7	)		(128.5	)		(128.5	)		(14.2	)		(7.9	)		(7.9	)
Additional Capital
Balance at beginning of period		474.3			424.6			401.7
Convertible debt interest forgiveness, net of tax		2.8			—			—
Stock based compensation effects		7.6			19.3			—
Excess tax benefit of stock based compensation		9.0			—			—
Issuance of common stock		20.6			30.4			22.9
Balance at end of period		514.3			474.3			424.6
Retained Earnings
Balance at beginning of period		787.9			699.8			753.7
Cumulative effect of adjustments from the adoption of FSP FAS 13-2, net of taxes		(15.0	)		—			—
Cumulative effect of adjustments from the adoption of FASB Interpretation No. 48		11.0			—			—
Cumulative effect of adjustments from the adoption of SAB No. 108, net of taxes		—			19.2			—
Adjusted balance at beginning of period		783.9			719.0			753.7
Net income (loss)		203.7			112.6			(13.9	)
Dividends declared		(48.6	)		(43.7	)		(40.0	)
Balance at end of period		939.0			787.9			699.8
Accumulated Other Comprehensive (Loss) Income
Balance at beginning of period		(3.4	)		(6.3	)		21.6
Foreign currency translation gain (loss)		70.0			33.0			(37.3	)
Unrealized gain (loss) on securities		0.6			(1.2	)		(3.1	)
Unrealized (loss) gain on derivative instruments		(1.1	)		8.2			13.8
Post retirement benefit plans		20.1			(37.1	)		(1.3	)
Balance at end of period		86.2			(3.4	)		(6.3	)
Total Shareholders’ Equity	$	1,149.5		$	1,167.7		$	1,026.1

* Less than $0.1 million.

The accompanying notes are an integral part of these consolidated financial statements.

48

GATX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

	Year Ended December 31
	2007			2006			2005
	In millions
Net income (loss)	$	203.7		$	112.6		$	(13.9	)
Other comprehensive income (loss), net of tax:
Foreign currency translation gain (loss)		70.0			33.0			(37.3	)
Unrealized gain (loss) on securities		0.6			(1.2	)		(3.1	)
Unrealized (loss) gain on derivative instruments		(1.1	)		8.2			13.8
Post retirement benefit plans		20.1			(2.3	)		(1.3	)
Other comprehensive income (loss)		89.6			37.7			(27.9	)
Comprehensive Income (Loss)	$	293.3		$	150.3		$	(41.8	)

The accompanying notes are an integral part of these consolidated financial statements.

49

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.   Description of Business

GATX Corporation (“GATX” or the “Company”) leases, operates and manages long-lived, widely used assets in the rail, marine and industrial equipment markets. GATX also invests in joint ventures that complement existing business activities. Headquartered in Chicago, Illinois, GATX has three financial reporting segments: Rail, Specialty and American Steamship Company (“ASC”).

GATX consummated the merger (the “Merger”) of its wholly-owned operating subsidiary, GATX Financial Corporation (“GFC”), with and into its parent, GATX, on and as of May 11, 2007. The merger did not have any impact on GATX’s financial position or results of operations.

NOTE 2.   Accounting Changes

FASB Staff Position (“FSP”) FAS 13-2 — As of January 1, 2007, GATX adopted FSP FAS 13-2, Accounting for a Change or Projected Change in the Timing of Cash Flows Relating to Income Taxes Generated by a Leveraged Lease Transaction. This guidance applies to all transactions classified as leveraged leases in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 13, Accounting for Leases, and provides that if the expected timing of income tax cash flows generated by a leveraged lease transaction changes, then the rate of return and the allocation of income among reporting periods should be recalculated, which may result in a one-time, non-cash charge to earnings in the period of changed expectations. As a result of the implementation of this FSP, GATX reduced the carrying value of two leveraged lease investments and recorded a corresponding reduction of $15.0 million, net of taxes, to the 2007 opening balance of retained earnings. This amount will be recognized as income over the remaining terms of the affected leases, 2007 to 2021, and is not expected to be material in any year.

FASB Interpretation No. 48 (“FIN 48”) — As of January 1, 2007, GATX adopted FIN 48, Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109, Accounting for Income Taxes. SFAS No. 109, Accounting for Income Taxes (“SFAS 109”), did not prescribe a recognition threshold or measurement attribute for the financial statement recognition and measurement of a tax position taken in a tax return. FIN 48 clarifies the application of SFAS 109 by defining criteria that an individual tax position must meet for any tax benefit to be recognized in an enterprise’s financial statements. As a result of the implementation of FIN 48, GATX recorded an $11.0 million decrease in the liability for unrecognized tax benefits and a corresponding increase to the 2007 opening balance of retained earnings. See Note 15 for additional information.

Staff Accounting Bulletin No. 108 (“SAB 108”) — As of January 1, 2006, GATX adopted SAB 108, Considering the Effects of Prior Year Misstatements When Quantifying Misstatements in Current Year Financial Statements. The Securities and Exchange Commission issued SAB 108 in order to eliminate the diversity in practice surrounding how public companies quantify financial statement misstatements. This bulletin provides guidance on how the effects of the carryover or reversal of prior year financial statement misstatements should be considered in quantifying a current year misstatement. Specifically, SAB 108 requires that registrants quantify errors using both a balance sheet and income statement approach and evaluate whether either approach results in a misstated amount that, when all relevant quantitative and qualitative factors are considered, is material. Prior practice allowed the evaluation of materiality on the basis of either the income statement or the balance sheet approach, but did not require both. In years prior to 2002, GATX recorded accruals in connection with the sale of multiple business segments reported as discontinued operations. These accruals were for post-retirement employment benefits on an undiscounted basis for severed employees and retirees of the sold business, the liability for which was retained by GATX. In subsequent years, the periodic expenses for post-retirement employment benefits related to former employees of the sold businesses were charged against the accruals. The Company now believes that these liabilities were determined in error. These errors were deemed to be immaterial prior to 2006, but after applying the guidance under SAB 108, the cumulative effect of these errors was determined to be material to 2006. In evaluating materiality and determining the appropriateness of applying SAB 108 to these errors, the Company considered

50

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

materiality both qualitatively and quantitatively as prescribed by the SEC’s Staff Accounting Bulletin No. 99 (“SAB 99”), Materiality. As a result, an after-tax adjustment of $19.2 million was made to increase the opening balance of retained earnings as of January 1, 2006.

Statement of Financial Accounting Standard No. 158, (“SFAS 158”) — GATX adopted SFAS 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R), as of December 31, 2006. SFAS 158 requires that a company’s balance sheet reflect the funded status of its pension and postretirement plans. The funded status of the plans is measured as the difference between the plan assets at fair value and the projected benefit obligation. GATX recognized the aggregate overfunding of any plans in Other Assets, the aggregate underfunding of any plans in Other Liabilities with a corresponding adjustment to accumulated other comprehensive income, net of related taxes. At December 31, 2006, previously unrecognized differences in the funding status of plans were recognized in accumulated other comprehensive income in the balance sheet as required by SFAS 158. The adoption of SFAS 158, resulted in adjustments to the carrying amount of pension and other post retirement plan balances and a corresponding decrease in shareholders’ equity of $34.8 million net of taxes. See Note 16 for additional information.

Share-Based Compensation — In December 2004, SFAS No. 123(R), Share-Based Payments (“SFAS 123(R)”) was issued. SFAS 123(R), which is a revision of SFAS No. 123, supersedes Accounting Principles Board (“APB”) Opinion No. 25 (“APB 25”). Generally, SFAS 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement, establishes fair value as the measurement objective and requires entities to apply a fair value-based measurement method in accounting for share-based payment transactions. GATX adopted SFAS 123(R) using the modified-prospective transition method (“MPT”) as of January 1, 2006. Under the MPT, entities are required to recognize compensation expense in financial statements issued subsequent to the date of adoption for all share-based payments granted, modified, or settled after the date of adoption as well as for any awards that were granted prior to the adoption date for which the requisite service period had not been provided as of the adoption date. Under this transition method, share-based compensation expense for all share-based awards granted prior to, but not yet vested as of January 1, 2006, was based on the grant date fair value estimated in accordance with the original provisions of SFAS 123. Prior to January 1, 2006, the Company applied APB 25 to account for its stock-based compensation plans. Under APB 25, no compensation expense was recognized for stock option awards as the exercise price of the awards on the date of the grant was equal to the then current market price of the Company’s stock, however, compensation expense was recognized in connection with the issuance of restricted stock and phantom stock awards. Thus, the adoption of SFAS 123(R) primarily resulted in compensation expense being recorded for stock options.

51

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

As a result of adopting SFAS 123(R) in 2006, the Company’s income before income taxes and net income for the year ended December 31, 2007, were $3.3 million and $2.0 million lower, respectively, and for the year ended December 31, 2006, were $3.5 million and $2.2 million lower, respectively, than under APB 25. Basic and diluted net earnings per share for the years ended December 31, 2007 and 2006, were each $0.04 lower than if the Company had continued to account for share-based compensation under APB 25. For the years ended December 31, 2007 and 2006, the total share-based compensation expense was $9.6 million ($5.9 million after tax) and $7.7 million ($4.7 million after tax), respectively. In 2005, had the Company recognized compensation costs as prescribed by SFAS No. 123, reported net income, basic earnings per share and diluted earnings per share would have been (in millions, except per share amounts):

	Year Ended
	December 31
	2005
Net (loss) income, as reported	$	(13.9	)
Add: Stock-based compensation expense, net of tax		1.5
Deduct: Total stock-based employee compensation expense determined under fair value-based method for all awards, net of tax		(4.0	)
Pro forma net (loss) income	$	(16.4	)
Net (loss) income per share:
Basic, as reported	$	(0.28	)
Basic, pro forma		(0.33	)
Diluted, as reported		(0.02	)
Diluted, pro forma		(0.07	)

See Note 21 for additional information.

NOTE 3.   Significant Accounting Policies

Consolidation — The consolidated financial statements include the accounts of GATX and its wholly owned subsidiaries. Investments in affiliated companies (discussed herein) are not consolidated. The consolidated financial statements reflect the operations of the former Air segment as discontinued operations for all periods presented. GATX has ownership interests in certain investments that are considered Variable Interest Entities (“VIEs”) in accordance with Financial Accounting Standards Board (“FASB”) Interpretation No. 46R, Consolidation of Variable Interest Entities (“FIN 46R”). GATX is not the primary beneficiary with respect to any of the VIEs. As a result, GATX does not consolidate these entities.

Use of Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) necessarily requires management to make estimates and assumptions that affect the amounts reported in the financial statements. The Company regularly evaluates estimates and judgments based on historical experience and other relevant facts and circumstances. Actual amounts could differ from those estimates.

Reclassification — Certain amounts in the 2006 and 2005 financial statements have been reclassified to conform to the 2007 presentation.

Cash and Cash Equivalents — GATX considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

52

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Restricted cash — Restricted cash represents cash and cash equivalents that are restricted as to withdrawal and usage. GATX’s restricted cash primarily relates to amounts maintained, as required by contract, for three wholly owned bankruptcy remote, special-purpose corporations.

Loans — GATX records loans at the principal amount outstanding plus accrued interest. The loan portfolio is reviewed regularly and a loan is classified as impaired when it is probable that GATX will be unable to collect all amounts due under the loan agreement. Since most loans are collateralized, impairment is generally measured as the amount by which the carrying value of the loan exceeds expected payments plus the fair value of the underlying collateral. Generally, interest income is not recognized on impaired loans until the loan has been paid up to contractually current status or as conditions warrant.

Operating Assets and Facilities — Operating assets and facilities are stated principally at cost. Assets acquired under capital leases are included in operating assets and the related obligations are recorded as liabilities. Provisions for depreciation include the amortization of capital lease assets. Operating assets and facilities are depreciated over their estimated useful lives or lease terms to estimated residual values using the straight-line method. The estimated useful lives of depreciable assets are as follows:

Railcars	30 – 38 years
Locomotives	12 – 20 years
Buildings	40 – 50 years
Leasehold improvements	5 – 40 years
Marine vessels	40 – 50 years

Impairment of Long-Lived Assets — A review for impairment of long-lived assets, such as operating assets and facilities, is performed whenever events or changes in circumstances indicate that the carrying amount of long-lived assets may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future net cash flows expected to be generated by the asset. If an asset is determined to be impaired, the impairment loss to be recognized is the amount by which the carrying amount of the asset exceeds its fair value. Assets to be disposed of are classified as held for sale and reported at the lower of their carrying amount or fair value less costs to sell.

Investments in Affiliated Companies — GATX has investments in 20 to 50 percent-owned companies and joint ventures and other investments in which GATX does not have effective or voting control (collectively “affiliates”). These affiliates are accounted for using the equity method. Investments in affiliated companies are initially recorded at cost, including goodwill at the acquisition date. In certain instances, GATX’s cost basis may be different from its share of the affiliates’ net assets. These differences are primarily attributable to loans to and from affiliates and purchase accounting adjustments. Income/expense on these loans offsets GATX’s proportional share of the affiliates’ earnings. The carrying amount of GATX’s investments in affiliated companies is affected by GATX’s share of the affiliates’ undistributed earnings and losses, distributions of dividends and loan payments to or from the affiliate. See Note 8 for additional information.

Impairment of investments in affiliated companies — In accordance with APB No. 18, The Equity Method of Accounting for Investments in Common Stock, GATX reviews the carrying amount of its investments in affiliates annually, or whenever events or changes in circumstances indicate that a decline in value may have occurred. If an investment is determined to be impaired on an other-than-temporary basis, a loss equal to the difference between the estimated fair value of the investment and its carrying value is recorded in the period of identification.

Inventory — GATX has inventory that consists of railcar and locomotive repair components and marine vessel spare parts. All inventory balances are stated at lower of cost or market. Railcar repair components are valued using the average cost method. Vessel spare parts inventory is valued using the first-in, first-out method. Inventory is included in other assets on the balance sheet.

53

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Goodwill — SFAS No. 142, Goodwill and Other Intangible Assets, established accounting and reporting standards for goodwill. Under these standards, goodwill is no longer amortized, but rather is subject to an annual impairment test. Goodwill is tested for impairment by comparing the fair value of the reporting unit with its carrying amount, including goodwill. Goodwill arising from individual business combinations are assigned to the same reporting unit as the assets and liabilities of the acquired businesses. Reporting units are determined based on the composition of GATX’s operating segments, taking into consideration whether the operating segments consisted of more than one business and, if so, whether the businesses operate in different economic environments. If the fair value of the reporting unit exceeds its carrying amount, then the goodwill of the reporting unit is considered not impaired. If the carrying amount of the reporting unit exceeds its fair value, an additional step is performed that compares the implied fair value of the reporting unit’s goodwill (as defined in SFAS No. 142) with the carrying amount of the goodwill. An impairment loss is recorded to the extent that the carrying amount of goodwill exceeds its implied fair value. Fair values of the reporting units are estimated using discounted cash flow models. GATX’s impairment review is performed at the reporting unit level, which is one level below the operating segment level. The impairment test is performed annually in the fourth quarter or in interim periods if events or circumstances indicate a potential impairment. See Note 10 for additional information.

Maintenance and Repair Costs — Maintenance and repair costs are expensed as incurred. Costs incurred by GATX in connection with planned major maintenance activities that improve or extend the useful life of an asset are capitalized and depreciated over their estimated useful life. Regulatory required survey costs for ASC’s vessels are capitalized and depreciated over a five year period.

Allowance for Possible Losses — The purpose of the allowance is to provide an estimate of credit losses with respect to gross receivables. Gross receivables include rent, direct finance lease receivables (including leveraged leases net of nonrecourse debt), and loan receivables and direct finance lease residual values. For the purpose of discussion of the allowance for losses, gross receivables exclude direct finance lease residual values. Losses on these residual values are recognized via a charge to earnings and do not affect the allowance. GATX’s estimate of the amount of provision (reversal) for losses incurred in each period requires consideration of historical loss experience, judgments about the impact of present economic conditions, collateral values, and the state of the markets in which GATX participates. GATX may also record specific provisions for known troubled accounts. GATX charges off amounts that management considers unrecoverable from obligors or the disposition of collateral. GATX assesses the recoverability of its receivables by considering several factors, including customer payment history and financial position. The allowance for possible losses is periodically reviewed for adequacy, taking into consideration changes in economic conditions, collateral values, credit quality indicators and customer-specific circumstances. GATX believes that the allowance is adequate to cover losses inherent in the gross receivables portfolio as of December 31, 2007.

Convertible Debt — GATX assessed its accounting for the conversion options embedded in its convertible debt issuances in accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities (“SFAS 133”), Emerging Issues Task Force Issue (“EITF”) No. 00-19, Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock and EITF 01-6, The Meaning of “Indexed to a Company’s Own Stock” concluding that the conversion options qualified for equity treatment and that bifurcation and separate accounting treatment of the embedded derivative was not required. GATX also assessed whether its convertible notes contained any beneficial conversion features in accordance with EITF 98-5, Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios and determined that none was present. Finally, GATX concluded that all other features of its convertible notes, including conversion contingencies and registration rights provisions, were either not derivatives requiring bifurcation and separate accounting or were derivatives, but were determined to have a zero value at the date of issuance. GATX regularly reviews changes in the potential value of these other features and recognizes any such changes in earnings, as applicable.

GATX accounted for the conversions of each of its convertible notes in accordance with EITF 90-19, Convertible Bonds with Issuer Option to Settle for Cash upon Conversion, and EITF 03-7, Accounting for the

54

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Settlement of the Equity-Settled Portion of a Convertible Debt Instrument That Permits or Requires the Conversion Spread to Be Settled in Stock (Instrument C of Issue No. 90-19). Specifically, GATX relied on the guidance for Instrument C of EITF 90-19, which was most similar to GATX’s conversions, in determining that only the cash payment should be considered in the computation of gain or loss on the extinguishment of the recognized liability; any shares transferred would not be considered in the settlement of the debt component. GATX’s cash payments were limited to the principal portions of each of its convertible notes, thus no gain or loss was recognized upon these conversions. Additionally, any accrued but unpaid interest as of the conversion date was recorded as an adjustment to additional paid in capital in accordance with EITF 85-17, Accrued Interest upon Conversion of Convertible Debt. See Note 13 for additional information.

Income Taxes — Income taxes are accounted for in accordance with SFAS 109. Provisions for federal, state and foreign income taxes are calculated on reported income before income taxes based on current tax law. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities, using enacted rates in effect for the year in which the differences are expected to reverse. The cumulative effect of any changes in tax rates from those previously used in determining deferred tax assets and liabilities is reflected in the provision for income taxes in the period of change. Provisions for income taxes in any given period differ from those currently payable or receivable because certain items of income and expense are recognized in different time periods for financial reporting purposes than they are for income tax purposes. United States (“U.S.”) income taxes have not been provided on the undistributed earnings of foreign subsidiaries and affiliates that GATX intends to permanently reinvest in these foreign operations. The cumulative amount of such earnings was $402.3 million at December 31, 2007. In 2005, GATX repatriated $94.5 million of foreign earnings, utilizing the one-time dividends received deduction available under the American Jobs Creation Act of 2004. See Note 15 for additional information.

Derivatives — SFAS 133 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts. The statement requires that an entity recognize all derivatives as either assets or liabilities on the balance sheet and measure those derivatives at fair value. GATX records the fair value of all derivatives as either other assets or other liabilities in the balance sheet. Classification of derivative activity in the statements of operations 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 related cash flows are included in cash flows from operating activities.

Instruments that meet established accounting criteria are formally designated as qualifying hedges at the inception of the contract. These criteria demonstrate that the derivative is expected to be highly effective at offsetting changes in the fair value or expected cash flows of the underlying exposure both at the inception of the hedging relationship and on an ongoing basis. GATX primarily uses derivatives, such as interest rate swap agreements, Treasury rate locks, options and currency forwards, as hedges to manage its exposure to interest rate and foreign currency exchange rate risk on existing and anticipated transactions. For qualifying derivatives designated as fair value hedges, changes in both the derivative and the hedged item attributable to the risk being hedged are recognized in earnings. For qualifying derivatives designated as cash flow hedges, the effective portion of the derivative’s gain or loss is recorded as part of other comprehensive income (loss) in shareholders’ equity and subsequently recognized in earnings when the hedged transaction affects earnings. The change in fair value of the ineffective portion of all hedges is immediately recognized in earnings. Although GATX does not hold or issue derivative financial instruments for purposes other than hedging, certain derivatives may not meet the established criteria to qualify as hedges. These derivatives are adjusted to fair value through earnings immediately. See Note 14 for further information.

Environmental Liabilities — Expenditures that relate to current or future operations are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations, and which do not contribute to current or future revenue generation, are charged to environmental reserves. Reserves are recorded in accordance with accounting guidelines to cover work at identified sites when GATX’s liability for environmental

55

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

cleanup is probable and a reasonable estimate of associated costs can be made. Adjustments to initial estimates are recorded as required. See Note 18 for additional information.

Revenue Recognition — Gross income includes rents on operating leases, accretion of income on direct finance leases, interest on loans, marine operating revenue, fees, asset remarketing gains and losses, gains and losses on the sale of portfolio investments and equity securities and share of affiliates’ earnings. Operating lease income is recognized on a straight-line basis over the term of the underlying leases. Finance lease income is recognized on the basis of the interest method, which produces a constant yield over the term of the lease. Marine operating revenue is recognized as shipping services are performed and revenue is allocated among reporting periods based on the relative transit time in each reporting period for shipments in process at any month end. Asset remarketing income includes gains and losses from the sale of assets from GATX’s portfolio as well as residual sharing fees from the sale of managed assets. Asset remarketing income is recognized upon completion of the sale of assets. Fee income, including management fees received from joint ventures, is recognized as services are performed, which may be over the period of a management contract or as contractual obligations are met.

Marine Operating and Maintenance Expenses — Marine operating expenses are categorized as either direct or indirect. Direct expenses, consisting primarily of crewing costs, fuel, tugs, vessel supplies, running repairs and insurance costs are recognized as incurred. Indirect expenses consist of repairs and maintenance and depreciation. Indirect expenses incurred prior to the beginning of the sailing season are deferred and amortized ratably over the anticipated sailing season, generally April 1 — December 31. Indirect expenses incurred during the sailing season are recognized as incurred.

Lease and Loan Origination Costs — Initial direct costs of leases are deferred and amortized over the lease term, either as an adjustment to the yield for direct finance leases or on a straight-line basis for operating leases. Loan origination fees and related direct loan origination costs for a given loan are offset, and the net amount is deferred and amortized over the term of the loan as an adjustment to interest income.

Residual Values — GATX has investments in the residual values of its operating assets. The residual values represent the estimate of the values of the assets at the end of the lease contracts. GATX initially records these based on appraisals and estimates. Realization of the residual values is dependent on GATX’s ability to market the assets under future market conditions. GATX reviews residual values periodically to determine that recorded amounts are appropriate. For finance lease investments, GATX reviews the estimated residual values of leased equipment at least annually, and any other-than-temporary declines in value are immediately charged to income. In addition to a periodic review, events or changes in circumstances may trigger an earlier review of residual values.

Investment Securities — GATX’s portfolio includes warrants received in connection with the financing of non-public, venture-backed companies, common stock received upon the exercise of warrants and debt securities. Equity securities are classified as available-for-sale in accordance with SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities. The securities are carried at fair value and unrealized gains and losses arising from re-measuring securities to fair value are included on an after tax basis as a separate component of accumulated other comprehensive income (loss). The Company uses specific identification as the basis to determine the amount reclassified from accumulated other comprehensive income (loss) upon sale of the securities. Under the provisions of SFAS 133, warrants are accounted for as derivatives, with changes in fair value recorded in current earnings. Upon conversion of the warrants to shares of common stock, the warrants are reclassified in the balance sheet as equity securities. Debt securities that management has the intent and ability to hold to maturity are classified as held-to-maturity and reported at amortized cost. Interest on debt securities, including amortization of premiums and accretion of discounts, are included in interest expense, net. Debt securities are written down to fair value when a decline in fair value below the security’s amortized cost basis is determined to be other-than-temporary.

Foreign Currency Translation — The assets and liabilities of GATX’s operations having non-U.S. dollar functional currencies are translated at exchange rates in effect at year end and statements of operations and cash

56

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

flows are translated at weighted average exchange rates for the year. In accordance with SFAS No. 52, Foreign Currency Translation, gains and losses resulting from the translation of foreign currency financial statements are deferred and recorded as a separate component of accumulated other comprehensive income or loss in the shareholders’ equity section of the balance sheet.

New Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (“SFAS 157”), which defines fair value, establishes a framework for measuring fair value in accordance with GAAP and expands disclosure requirements related to the use of fair value measurements. The statement is effective for financial statements issued in 2008. The application of SFAS 157 is not expected to be material to the Company’s financial position or results of operations.

In February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities (“SFAS 159”), which permits entities to elect to measure financial instruments and certain other items at fair value that are not currently required to be measured at fair value. The statement is effective as of the beginning of the fiscal year that begins after November 15, 2007. The application of SFAS 159 is not expected to be material to the Company’s financial position or results of operations.

In December 2007, the FASB issued SFAS No. 141(R), Business Combinations (“SFAS 141(R)”). SFAS 141(R) requires an acquirer to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date; the immediate expense recognition of transaction costs and the accounting for restructuring costs separately from the business combination. This Statement also requires the acquirer in a business combination achieved in stages (sometimes referred to as a step acquisition) to recognize the identifiable assets and liabilities, as well as the noncontrolling interest in the acquiree, at the full amounts of their fair values. SFAS 141(R) is effective for the Company’s fiscal year beginning 2009 and adoption is prospective only.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51 (“SFAS 160”). SFAS 160 requires entities to report noncontrolling (minority) interests of consolidated subsidiaries as a component of shareholders’ equity on the balance sheet; include all earnings of a consolidated subsidiary in consolidated results of operations; and treat all transactions between an entity and the noncontrolling interest as equity transactions between the parties. SFAS 160 is effective for the Company’s fiscal year beginning January 1, 2009 and adoption is prospective only; however, the presentation and disclosure requirements must be applied retrospectively. The Company does not consolidate any partially owned subsidiaries and therefore does not expect the application of this standard to have a material impact to its financial position, cash flows or results of operations.

NOTE 4.   Supplemental Cash Flow and Noncash Investing and Financing Transactions

	2007		2006		2005
Supplemental Cash Flow Information for Continuing Operations
Interest paid(a)	$	132.8	$	142.0	$	131.8
Income taxes paid	$	23.8	$	16.1	$	15.6

(a) Interest paid for continuing operations consisted of interest on debt obligations, interest rate swaps (net of interest received) and capital lease interest. Interest expense capitalized as part of the cost of construction of major assets was $0.1 million, $0.1 million and zero in 2007, 2006 and 2005 respectively.

57

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Noncash Investing and Financing Transactions

Capital lease obligations assumed $ 27.6 $ 0.1 $ —

NOTE 5.   Leases

The following information pertains to GATX as a lessor:

Finance Leases — GATX’s finance leases are comprised of direct financing leases and leveraged leases. Investment in direct finance leases consists of lease receivables, plus the estimated residual value of the equipment at the lease termination dates, less unearned income. Lease receivables represent the total rent to be received over the term of the lease reduced by rent already collected. Initial unearned income is the amount by which the original sum of the lease receivable and the estimated residual value exceeds the original cost of the leased equipment. Unearned income is amortized to lease income over the lease term in a manner that produces a constant rate of return on the net investment in the lease.

Finance leases that are financed principally with nonrecourse borrowings at lease inception and that meet certain criteria are accounted for as leveraged leases. Leveraged lease receivables are stated net of the related nonrecourse debt. Initial unearned income represents the excess of anticipated cash flows (including estimated residual values, net of the related debt service) over the original investment in the lease. The Company recognized income from leveraged leases (net of taxes) of $3.1 million, $3.8 million and $3.8 million in 2007, 2006 and 2005, respectively.

The components of the investment in finance leases at December 31 were (in millions):

	Leveraged						Direct						Total
	Leases						Financing						Finance Leases
	2007			2006			2007			2006			2007			2006
Total minimum lease payments receivable	$	725.1		$	975.1		$	382.6		$	420.8		$	1,107.7		$	1,395.9
Principal and interest on third-party nonrecourse debt		(622.9	)		(846.7	)		—			—			(622.9	)		(846.7	)
Net minimum future lease receivable		102.2			128.4			382.6			420.8			484.8			549.2
Estimated non-guaranteed residual value of leased assets		49.4			95.7			68.1			70.5			117.5			166.2
Unearned income		(50.8	)		(73.1	)		(216.9	)		(239.7	)		(267.7	)		(312.8	)
Investment in finance leases		100.8			151.0			233.8			251.6			334.6			402.6
Allowance for possible losses		(7.3	)		(6.3	)		—			—			(7.3	)		(6.3	)
Deferred taxes		(88.0	)		(107.1	)		—			—			(88.0	)		(107.1	)
Net investment	$	5.5		$	37.6		$	233.8		$	251.6		$	239.3		$	289.2

Operating Leases — Rental income from operating leases is generally reported on a straight-line basis over the term of the lease. Rental income on certain leases is based on equipment usage. Rental income from usage rents was $22.7 million, $20.7 million and $18.3 million, in 2007, 2006 and 2005, respectively.

58

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Minimum Future Receipts — Minimum future lease receipts from finance leases, net of debt payments for leveraged leases, and minimum future rental receipts from noncancelable operating leases at December 31, 2007 were (in millions):

	Finance		Operating
	Leases		Leases		Total
2008	$	37.6	$	791.0	$	828.6
2009		40.9		598.9		639.8
2010		36.5		475.2		511.7
2011		38.9		330.2		369.1
2012		29.6		227.9		257.5
Years thereafter		301.3		530.9		832.2
	$	484.8	$	2,954.1	$	3,438.9

The following information pertains to GATX as a lessee:

Capital Leases — GATX assets that are financed with capital lease obligations and subsequently leased to customers under either operating or finance leases, or otherwise utilized in operations at December 31 were (in millions):

	2007			2006
Railcars and other equipment	$	72.6		$	48.0
Marine vessels		98.0			98.0
		170.6			146.0
Less: allowance for depreciation		(111.3	)		(108.7	)
	$	59.3		$	37.3

Depreciation of capital lease assets is classified as depreciation in the consolidated statement of operations. Interest expense on the above capital leases was $3.9 million, $4.3 million and $5.3 million in 2007, 2006 and 2005, respectively.

Operating Leases — GATX has financed railcars and other assets through sale-leasebacks that are accounted for as operating leases. A subsidiary of GATX has provided a guarantee for a portion of the residual values related to two operating leases. GATX also leases office facilities and certain related administrative assets. Operating lease expense related to these leases is included in selling, general and administrative expense. Total operating lease expense was $162.5 million, $173.9 million and $187.6 million, in 2007, 2006 and 2005, respectively. Certain operating leases provide options for GATX to renew the leases or purchase the assets at the end of the lease term. The specific terms of the renewal and purchase options vary.

In 2005, GATX completed a sale leaseback transaction for approximately 2,900 of its railcars (net book value of $170.0 million) for net proceeds of $201.3 million. The transaction resulted in a gain of $31.3 million, which was deferred and is being amortized as a component of operating lease expense over the 21-year term of the resulting operating lease.

59

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Future Minimum Rental Payments — Future minimum rental payments due under noncancelable leases at December 31, 2007 were (in millions):

				Recourse		Nonrecourse
	Capital			Operating		Operating
	Leases			Leases		Leases
2008	$	12.4		$	127.7	$	43.8
2009		12.7			123.0		41.0
2010		17.3			128.3		42.2
2011		21.7			113.3		42.2
2012		4.7			113.1		40.7
Years thereafter		25.8			722.8		273.4
		94.6		$	1,328.2	$	483.3
Less: amounts representing interest		(22.1	)
Present value of future minimum capital lease payments	$	72.5

The future minimum rental payments due under recourse operating leases are reduced by $13.3 million of minimum sublease rentals to be received in the future. The minimum rental payments do not include the costs of licenses, taxes, insurance, and maintenance, for which GATX is required to pay. The amounts shown for nonrecourse operating leases primarily reflect the rental payments of three bankruptcy remote, special-purpose corporations that are wholly owned by GATX. These rentals are consolidated for accounting purposes, but do not represent legal obligations of GATX.

NOTE 6.   Loans

Loans are recorded at the principal amount outstanding plus accrued interest. The loan portfolio, which consists primarily of equipment related loans, is reviewed regularly and a loan is classified as impaired when it is probable that GATX will be unable to collect all amounts due under the loan agreement. Since most loans are collateralized, impairment is generally measured as the amount by which the recorded investment in the loan exceeds expected repayments plus the fair value of the underlying collateral. Generally, interest income is not recognized on impaired loans until the loan has been paid up to contractually current status or conditions warrant.

Total loans of $8.8 million and $36.0 million at December 31, 2007 and 2006, respectively, included impaired loans of zero and $0.1 million, respectively. The Company has recorded an allowance for possible losses of zero and $0.1 million on impaired loans at December 31, 2007 and 2006, respectively. The average balance of impaired loans was zero, $4.5 million and $11.2 million during 2007, 2006 and 2005, respectively. Interest income recognized related to impaired loans was zero, $1.0 million and zero in 2007, 2006 and 2005, respectively.

60

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

At December 31, 2007, scheduled loan principal due by year was as follows (in millions):

	Loan Principal
2008	$	4.1
2009		4.0
2010		0.3
2011		0.2
2012		0.1
Years thereafter		0.1
	$	8.8

NOTE 7.   Allowance for Possible Losses

The purpose of the allowance is to provide an estimate of credit losses inherent in its reservable assets. Reservable assets include rent and other receivables, loans and finance leases. GATX’s estimate of the amount of loss incurred in each period requires consideration of historical loss experience, judgments about the impact of present economic conditions, collateral values, and the state of the markets in which GATX participates, in addition to specific losses for known troubled accounts. GATX charges off amounts that management considers unrecoverable either from obligors or through the disposition of collateral. GATX assesses the recoverability of investments by considering factors such as a customer’s payment history, financial position and the value of the related collateral.

The following summarizes changes in the allowance for possible losses at December 31 (in millions):

	2007			2006			2005
Balance at the beginning of the year	$	9.6		$	12.7		$	21.0
Provision (reversal) for possible losses		0.1			(2.1	)		(5.6	)
Charges to allowance		(1.3	)		(1.9	)		(4.7	)
Recoveries and other		2.6			0.9			2.0
Balance at the end of the year	$	11.0		$	9.6		$	12.7

The reversals of provision for losses in 2006 and 2005 were primarily due to favorable credit experience. There were no material changes in estimation methods or assumptions for the allowance during 2007. GATX believes that the allowance is adequate to cover losses inherent in the gross receivables portfolio as of December 31, 2007. Since the allowance is based on judgments and estimates, it is possible that those judgments and estimates could change in the future, causing a corresponding change in the recorded allowance.

NOTE 8.   Investments in Affiliated Companies

Investments in affiliated companies represent investments in, and loans to and from, domestic and foreign companies and joint ventures that are in businesses similar to those of GATX, such as lease financing and related services for customers operating rail, marine and industrial equipment assets, as well as other business activities, including ventures that provide asset residual value guarantees in both domestic and foreign markets. At December 31, 2007 and 2006, these investments include net loans to affiliated companies of $2.7 million and $0.1 million, respectively, and net loans from affiliated companies of $56.0 million and $54.0 million, respectively. Distributions received from affiliates were $93.4 million, $74.8 million and $68.8 million in 2007, 2006 and 2005, respectively.

61

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table shows GATX’s investments in affiliated companies by segment at December 31 (in millions):

	2007		2006
Rail	$	135.4	$	109.7
Specialty		182.4		182.2
	$	317.8	$	291.9

The table below provides detail on the five largest investments in affiliates at December 31, 2007 ($’s in millions):

				GATX’s
		GATX’s		Percentage
	Segment	Investment		Ownership
AAE Cargo AG	Rail	$	111.2		37.5	%
Cardinal Marine Investments, LLC	Specialty		43.9		50.0	%
Rolls-Royce & Partners Finance (US) LLC	Specialty		32.3		50.0	%
Clipper Third Ltd.	Specialty		29.6		50.0	%
Clipper Fourth Ltd.	Specialty		27.3		45.0	%

The following table shows GATX’s pre-tax share of affiliates’ earnings by segment for the years ending December 31 (in millions):

	2007		2006		2005
Rail	$	18.8	$	22.7	$	13.7
Specialty		74.4		53.4		60.0
	$	93.2	$	76.1	$	73.7

Operating results for all affiliated companies held at December 31, assuming GATX held a 100% interest, would be (in millions):

	2007		2006		2005
Revenues	$	665.3	$	559.2	$	540.6
Pre-tax income reported by affiliates		210.5		199.7		186.6

Summarized balance sheet data for all affiliated companies held at December 31, assuming GATX held a 100% interest, would be (in millions):

	2007		2006
Total assets	$	3,557.2	$	3,464.3
Long-term liabilities		2,408.8		2,345.0
Other liabilities		390.3		369.8
Shareholders’ equity		758.2		749.5

At December 31, 2007 and 2006, GATX provided $20.7 million and $24.2 million, respectively, in lease and loan payment guarantees and $60.7 million and $62.0 million, respectively, in residual value guarantees related to affiliated companies.

62

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

NOTE 9.   Variable Interest Entities

GATX has ownership interests in certain investments that are considered Variable Interest Entities (“VIEs”) in accordance with FIN 46(R). GATX is not the primary beneficiary with respect to any of the VIEs. As a result, GATX does not consolidate these entities. These entities are generally involved in railcar and equipment leasing activities. The nature of GATX’s involvement with these entities primarily consists of equity investments and leveraged leases which were acquired or entered into between 1994 and 2006. GATX continues to evaluate new investments for the application of FIN 46(R) and regularly reviews all existing VIE’s in connection with any reconsideration events as defined in FIN 46(R) that may result in GATX becoming the primary beneficiary. GATX’s maximum exposure to loss with respect to these VIEs is approximately $130.3 million of which $109.6 million was the aggregate carrying value of these investments recorded on the balance sheet at December 31, 2007. The difference between the carrying value and maximum loss exposure relates to GATX’s guarantee of an affiliate’s lease obligation that runs through 2018.

NOTE 10.   Goodwill

Goodwill was $104.4 million and $92.8 million as of December 31, 2007 and 2006, respectively. In accordance with SFAS No. 142, GATX performed its annual review for impairment of goodwill in the fourth quarter of 2007 and 2006, concluding that its goodwill was not impaired.

The following reflects the changes in the carrying value of goodwill, all of which pertains to Rail, for the periods of December 31, 2005 to December 31, 2007 (in millions):

Balance at December 31, 2005	$	86.0
Foreign currency translation adjustment		6.8
Balance at December 31, 2006		92.8
Foreign currency translation adjustment		11.6
Balance at December 31, 2007	$	104.4

NOTE 11.   Investment Securities

The following table summarizes GATX’s investment securities as of December 31 (in millions):

	2007		2006
Available-for-sale securities	$	1.4	$	0.7
Held-to-maturity securities		—		41.6
Warrants		2.2		1.2
	$	3.6	$	43.5

Proceeds from sales of available-for-sale securities totaled $0.7 million in 2007, $7.2 million in 2006, and $9.3 million in 2005. The $41.6 million of held-to-maturity securities at December 31, 2006, matured in 2007.

63

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

NOTE 12.   Other Assets and Other Liabilities

The following table summarizes the components of other assets reported on the consolidated balance sheets (in millions):

	December 31
	2007		2006
Investment securities	$	3.6	$	43.5
Other investments		27.4		17.9
Fair value of derivatives		8.3		1.9
Deferred financing costs		24.5		30.2
Pension asset		53.1		28.7
Prepaid items		14.3		15.4
Office furniture, fixtures and other equipment, net of accumulated depreciation		15.2		17.6
Inventory		41.3		31.9
Other		33.7		38.1
	$	221.4	$	225.2

The following table summarizes the components of other liabilities reported on the consolidated balance sheets (in millions):

	December 31
	2007		2006
Accrued operating lease expense	$	106.5	$	113.3
Pension and OPEB liabilities		83.4		93.8
Environmental reserves		34.7		34.4
Deferred income		42.9		40.6
Fair value of derivatives		27.6		11.0
Other		78.9		55.2
	$	374.0	$	348.3

NOTE 13.   Debt

Commercial Paper and Borrowings Under Bank Credit Facilities

	December 31
	2007			2006
Balance	$	247.3		$	22.4
Weighted average interest rate		5.35	%		4.15	%

64

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Recourse and Nonrecourse Debt Obligations

Debt obligations and the range of interest rates as of year end were ($ in millions):

			December 31
Variable Rate	Interest Rates	Final Maturity	2007		2006
Term notes and other obligations	4.28% – 6.20%	2008 – 2013	$	200.8	$	204.8
Nonrecourse obligations	n/a	n/a		—		1.9
				200.8		206.7
Fixed Rate
Term notes and other obligations	3.45% – 8.88%	2008 – 2023		1,839.1		1,933.3
Nonrecourse obligations	n/a	n/a		—		0.8
				1,839.1		1,934.1
			$	2,039.9	$	2,140.8

Maturities of GATX’s debt obligations as of December 31, 2007, were as follows (in millions):

	Term Notes
	and Other
2008	$	222.7
2009		400.8
2010		256.5
2011		223.4
2012		352.1
Thereafter		578.8
Sub-total		2,034.3
Other (a)		5.6
Total debt	$	2,039.9

(a)   Market value adjustment for debt with qualifying hedges.

At December 31, 2007, none of GATX’s assets was pledged as collateral for notes or other obligations.

Credit Lines and Facilities

GATX filed a shelf registration statement for debt securities and pass-through trust certificates in 2007. The registration statement is effective through August 2010 and there is no limit on the amount of issuance. GATX also has a $550.0 million senior unsecured revolving facility which matures May 2012. At December 31, 2007, availability under the revolving credit facility was $290.9 million, with $242.8 million of commercial paper outstanding and $16.3 million of letters of credit issued, both backed by the facility. Annual commitment fees for the revolving credit facility are based on a percentage of the commitment and were $0.5 million, $0.7 million and $1.0 million for 2007, 2006 and 2005, respectively. GATX also has revolving lines of credit totaling $45.2 million in Europe. At December 31, 2007, availability under those revolving lines of credit was $40.9 million.

65

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Restrictive Covenants

The revolving credit facility contains various restrictive covenants, including requirements to maintain a fixed charge coverage ratio and an asset coverage test. GATX’s ratio of earnings to fixed charges, as defined in the credit facility, was 2.1x for the period ended December 31, 2007, in excess of the minimum covenant ratio of 1.2x. At December 31, 2007, GATX was in compliance with all covenants and conditions of the credit facility.

The indentures for GATX’s public debt also contain restrictive covenants, including limitations on loans, advances or investments in related parties and dividends it may distribute. Some of the indentures also contain limitation on lien provisions that limit the amount of secured indebtedness that GATX may incur, subject to several exceptions, including those permitting an unlimited amount of purchase money indebtedness and nonrecourse indebtedness. In addition to the other specified exceptions, GATX would be able to incur liens securing a maximum of $871.2 million of additional indebtedness as of December 31, 2007, based on the most restrictive limitation on liens provision. At December 31, 2007, GATX was in compliance with all covenants and conditions of the indentures.

The loan agreements for certain of GATX’s wholly owned European subsidiaries (collectively, “GRE”) also contain restrictive covenants, including leverage and cash flow covenants specific to those subsidiaries, restrictions on making loans and limitations on the ability of these subsidiaries to repay loans to certain related parties (including GATX) and to pay dividends to GATX. The covenants relating to loans and dividends effectively limit the ability of GRE to transfer funds to GATX. At December 31, 2007, the maximum amount that GRE could transfer to GATX without violating its covenants was $25.9 million, implying that $349.4 million of subsidiary net assets were restricted. Restricted net assets are defined as equity less 50% of free cash flow. At December 31, 2007, GRE was in compliance with all covenants and conditions of these loan agreements.

Another subsidiary’s financing, guaranteed by GATX, contains various restrictive covenants, including requirements for GATX to maintain a defined net worth and a fixed charge coverage ratio. This fixed charge coverage ratio covenant is less restrictive than that contained in the revolving credit facility.

GATX does not anticipate any covenant violations nor does it anticipate that any of these covenants will restrict its operations or its ability to procure additional financing.

Convertible Securities

2002 Convertible Notes — In February 2002, GATX issued $175.0 million long-term, 7.5% senior unsecured convertible notes (the “2002 Notes”), of which a balance of $124.3 million was outstanding as of December 31, 2006. The notes matured February 2007.

2003 Convertible Notes — In August 2003, GATX issued $125.0 million, 5.0% senior unsecured notes, due in August 2023, which are convertible into GATX common stock. As of December 31, 2007, $106.8 million of the notes were outstanding and convertible at a conversion price of $24.81 per share. GATX has the right, beginning in August 2008, to redeem the notes at 100% of the principal amount plus accrued and unpaid interest. If GATX provides notice of redemption, the holders of the notes may elect to exercise their conversion privilege. Upon conversion, GATX may elect, at its option, to deliver cash, shares of GATX common stock or any combination thereof. A summary of the various terms and contingencies contained in the 2003 Notes follows.

Holders of the 2003 Notes have the right to require all or a portion of the notes to be purchased at a price equal to 100% of the principal amount of the notes plus accrued and unpaid interest in August 2008, August 2013 and August 2018. Any required purchases in August 2008, will be payable in cash, whereas any purchases in August 2013 or August 2018 may be paid in cash or shares of GATX common stock or any combination thereof, at GATX’s option. GATX also has the right, beginning in August 2008, to redeem the notes at 100% of the principal amount plus accrued and unpaid interest.

66

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The 2003 Notes are convertible into GATX common stock upon the resolution of any of five contingencies: (1) during any applicable conversion period in which the trading price of GATX common stock is greater than or equal to 120% of the conversion price, (2) upon specified negative credit rating agency actions, (3) if GATX calls the notes for redemption, (4) if the trading price of the notes is less than 95% of the conversion value (subject to certain conditions), (5) upon specified corporate events such as certain distributions of stock rights or assets or in the event of a merger or consolidation. Upon conversion, GATX may elect, at its option, to deliver cash, shares of GATX common stock or any combination thereof.

The 2003 Notes carry a contingent interest provision that beginning on August 15, 2008, if the average trading price of the 2003 Notes equals 120% or more of the principal amount of the Notes, GATX may be required to pay additional interest for any six month period equal to 0.25% of the trading price of $1,000 principal amount of the notes. GATX may avoid paying this contingent interest by calling the notes prior to the record date for the contingent interest period.

Maturities and Conversions of Convertible Notes — During 2007, the remaining balance of the 2002 Notes was settled with a cash payment of $124.3 million for the principal balance and the issuance of 1.0 million shares of GATX common stock for the difference between GATX’s stock price at the time of conversion and the conversion price (the “conversion premium”). Additionally in 2007, certain of the 2003 Notes were converted, resulting in a cash payment of $18.2 million for the principal balance and 0.4 million shares issued for the conversion premium. Additionally, accrued interest of $4.8 million ($2.8 million after tax) was forfeited upon conversion and reclassified to additional paid in capital.

NOTE 14.   Fair Value of Financial Instruments

GATX may enter into derivative transactions for purposes of reducing earnings volatility and hedging specific financial exposures, including movements in foreign currency exchange rates and changes in interest rates on debt securities. These instruments are entered into only for hedging underlying exposures. GATX does not hold or issue derivative financial instruments for purposes other than hedging, except for warrants, which are not hedges. Certain derivatives may not meet the established criteria to be designated qualifying accounting hedges, even though GATX believes they are effective economic hedges.

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. The fair value of interest rate swap agreements is determined based on the differences between the contractual rate of interest and the rates currently quoted for agreements of similar terms and maturities. As of December 31, 2007, maturities for fair value hedges range from 2009-2015.

Cash Flow Hedges — GATX’s interest expense is affected by changes in interest rates as a result of its use of variable rate debt instruments, including commercial paper and other floating rate debt. GATX uses interest rate swaps and forward starting interest rate swaps to convert floating rate debt to fixed rate debt and to manage the floating to fixed rate ratio of the debt portfolio. The fair value of interest rate swap agreements is determined based on the differences between the contractual rate of interest and the rates currently quoted for agreements of similar terms and maturities. GATX enters into cross currency and interest rate swaps, currency and interest rate forwards, and Treasury rate locks as hedges to manage its exposure to interest rate and foreign currency exchange rate risk on existing and anticipated transactions. The fair values of these derivatives are based on interest rate swap rates, Treasury and LIBOR futures, currency rates, and forward foreign exchange rates. As of December 31, 2007, maturities for qualifying cash flow hedges range from 2008-2015.

For the years ended December 31, 2007, 2006, and 2005, amounts recognized in earnings for hedge ineffectiveness were immaterial. As of December 31, 2007, GATX expects to reclassify $2.1 million ($1.3 million after tax) of net losses on derivative instruments from accumulated other comprehensive loss to earnings within the next twelve months as interest and lease expenses related to the hedged risks affect earnings.

67

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Other Financial Instruments — The fair values of other financial instruments represent the amounts at which the instruments could be exchanged in a current transaction between willing parties. The carrying amounts of cash and cash equivalents, restricted cash, rent receivables, accounts payable, commercial paper and bank credit facilities approximate fair value due to the short maturity of those instruments. The carrying amounts of held-to-maturity securities, which are variable rate, and variable rate loans also approximate their fair values. Available-for-sale securities and warrants are carried at fair value. The fair values of fixed rate loans were estimated using discounted cash flow analyses, at interest rates currently offered for loans with similar terms to borrowers of similar credit quality. The fair values of variable and fixed rate debt, excluding convertible securities, were estimated by performing a discounted cash flow calculation using the term and market interest rate for each note based on an estimate of GATX’s current incremental borrowing rates for similar borrowing arrangements. Convertible debt securities were valued using third party quotes.

Portions of variable rate debt have effectively been converted to fixed rate debt by utilizing interest rate swaps (GATX pays fixed rate interest, receives floating rate interest). Portions of fixed rate debt have effectively been converted to floating rate debt by utilizing interest rate swaps (GATX pays floating rate interest, receives fixed rate interest). In such instances, the increase (decrease) in the fair value of the variable or fixed rate debt would be offset in part by the increase (decrease) in the fair value of the interest rate swap.

The following table sets forth the carrying amounts and fair values of GATX’s financial instruments as of December 31 (in millions):

	2007		2007		2007		2006		2006		2006
	Notional		Carrying		Fair		Notional		Carrying		Fair
	Amount		Amount		Value		Amount		Amount		Value
Assets
Loans — fixed		n/a	$	8.7	$	9.0		n/a	$	16.5	$	15.4
Investment securities		n/a		3.6		3.6		n/a		43.5		43.5
Derivative instruments:
Cash flow hedges	$	225.7		2.6		2.6	$	30.8		0.5		0.5
Fair value hedges		255.0		5.7		5.7		70.0		1.4		1.4
Total derivative instruments		480.7		8.3		8.3		100.8		1.9		1.9
	$	480.7	$	20.6	$	20.9	$	100.8	$	61.9	$	60.8
Liabilities
Commercial paper and bank credit facilities		n/a	$	247.3	$	247.3		n/a	$	22.4	$	22.4
Debt — fixed		n/a		1,839.1		1,894.8		n/a		1,934.1		2,085.8
Debt — variable		n/a		200.8		197.6		n/a		206.7		207.1
Derivative instruments:
Cash flow hedges	$	367.1		27.6		27.6	$	183.1		5.0		5.0
Fair value hedges		—		—		—		185.0		3.1		3.1
Non-qualifying		—		—		—		23.0		2.9		2.9
Total derivative instruments		367.1		27.6		27.6		391.1		11.0		11.0
	$	367.1	$	2,314.8	$	2,367.3	$	391.1	$	2,174.2	$	2,326.3

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

68

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

avoiding concentrations of risk with a single counterparty. GATX considers the risk of non-performance by a counterparty to be remote.

For the years ended December 31, 2007, 2006 and 2005, gains (losses) of $1.1 million, $(1.1) million and $2.1 million, respectively, were recognized in earnings for derivatives that did not qualify as hedges.

NOTE 15.   Income Taxes

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Significant components of GATX’s deferred tax liabilities and assets were (in millions):

	December 31
	2007		2006
Deferred Tax Liabilities
Book/tax basis difference due to depreciation	$	376.3	$	384.3
Leveraged leases		88.0		107.1
Investments in affiliated companies		98.4		110.6
Lease accounting (other than leveraged)		216.2		204.9
Other		43.7		63.2
Total deferred tax liabilities		822.6		870.1
Deferred Tax Assets
Alternative minimum tax credit		—		13.1
Accruals not currently deductible for tax purposes		31.6		30.1
Allowance for possible losses		6.2		3.8
Post-retirement benefits other than pensions		18.5		19.7
Other		43.5		46.0
Total deferred tax assets		99.8		112.7
Net deferred tax liabilities	$	722.8	$	757.4

The alternative minimum tax credit of $13.1 million was utilized during 2007 to offset current U.S. federal income tax expense.

On January 1, 2007, GATX adopted the provisions of FIN 48. In accordance with FIN 48, during the year, liabilities for unrecognized tax benefits were reclassified from deferred tax liabilities and are now accounted for separately. The adoption of FIN 48 resulted in an $11.0 million decrease in the liability for unrecognized tax benefits and a corresponding increase to the 2007 opening balance of retained earnings. A reconciliation of the beginning and ending amount of GATX’s gross liability for unrecognized tax benefits is as follows (in millions):

Balance at January 1, 2007	$	41.2
Additions based on tax positions related to the current year		15.5
Additions to tax positions of prior years, including interest		4.8
Reductions for tax positions of prior years		—
Settlements		(0.6	)
Balance at December 31, 2007	$	60.9

69

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

If fully recognized, GATX’s gross liability for unrecognized tax benefits of $60.9 million would decrease income tax expense by $45.0 million ($39.2 million net of federal tax benefits).

GATX files numerous consolidated and separate income tax returns in the U.S. federal jurisdiction, as well as various state and foreign jurisdictions. During 2006, the Internal Revenue Service (“IRS”) commenced an examination of the Company’s U.S. consolidated income tax returns for years 2003 through 2005, which is expected to be completed by the end of 2008. Additionally, the IRS substantially completed its audit of the Company’s income tax returns for the years 1998 though 2002. As part of this audit, the Company entered the IRS appeals process to address one disputed issue. During 2007, the Company and the IRS were unable to resolve the disputed issue utilizing the appeals process. GATX rejected the proposed adjustment as it believes that its tax position related to this issue was proper based upon applicable statutes, regulations and case law. The Company does not anticipate that the resolution of this matter, including any potential litigation, will have a material impact on its financial position or results of operations. All examinations with respect to U.S. tax returns for years prior to 1998 have been closed.

Subject to the completion of certain audits or the expiration of the applicable statute of limitations, the Company believes it is reasonably possible that, within the next 12 months, unrecognized state tax benefits of $7.0 million and foreign tax benefits of $1.7 million may be recognized. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. As of December 31, 2007, the gross liability for unrecognized tax benefits included $7.1 million related to interest. No amounts have been accrued for penalties. To the extent interest is not assessed or otherwise decreased with respect to uncertain tax positions, amounts accrued will be reduced and recorded as a reduction of income tax expense.

The components of income from continuing operations before income taxes consisted of (in millions):

	Year Ended December 31
	2007		2006		2005
Domestic	$	164.0	$	110.8	$	73.8
Foreign		94.6		116.7		98.8
	$	258.6	$	227.5	$	172.6

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

GATX and its U.S. subsidiaries file a consolidated federal income tax return. Income taxes for continuing operations consisted of (in millions):

	Year Ended December 31
	2007			2006		2005
Current
Domestic:
Federal	$	—		$	—	$	(1.6	)
State and local		1.4			—		0.3
		1.4			—		(1.3	)
Foreign		13.3			15.2		25.6
		14.7			15.2		24.3
Deferred
Domestic:
Federal		52.4			39.9		23.4
State and local		8.6			8.1		6.0
		61.0			48.0		29.4
Foreign		(2.9	)		12.9		3.0
		58.1			60.9		32.4
Expense of repatriated foreign earnings		—			—		9.9
Income taxes	$	72.8		$	76.1	$	66.6

The reasons for the difference between GATX’s effective income tax rate and the federal statutory income tax rate were (dollars in millions):

	Year Ended December 31
	2007			2006			2005
Income taxes at federal statutory rate	$	90.5		$	79.6		$	60.4
Adjust for effect of:
U.S. tax on foreign earnings		—			3.1			9.9
Foreign income tax rates		(3.4	)		(7.6	)		(6.7	)
Tax rate decrease on deferred taxes		(20.1	)		(5.9	)		—
Extraterritorial income exclusion		—			(0.5	)		(0.5	)
State income taxes		6.9			5.2			4.2
Corporate owned life insurance		(0.6	)		(0.6	)		(1.1	)
Other		(0.5	)		2.8			0.4
Income taxes	$	72.8		$	76.1		$	66.6
Effective income tax rate		28.2	%		33.4	%		38.6	%

To take advantage of the one-time dividends received deduction in the American Jobs Creation Act of 2004, GATX repatriated $94.5 million of foreign earnings in 2005 at a U.S. tax cost of $9.9 million. The tax cost includes federal and state income taxes on the taxable portion of the dividends and related non-deductible costs, and foreign withholding taxes.

The effective income tax rate is impacted by foreign taxes on the earnings of foreign subsidiaries and affiliates which are imposed at rates that are different than the U.S. federal statutory rate. Foreign taxes are also withheld on certain payments received by the Company from foreign sources. The impact of foreign earnings subject to tax at

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

rates lower than the U.S. statutory rate is shown above. The foreign income tax rate effects exclude the impact on deferred taxes of enacted changes in foreign rates, which are identified separately.

The tax rate decreases on deferred taxes recorded in 2007 and in 2006 are the result of changes in foreign income tax rates enacted in those years.

The extraterritorial income exclusion (“ETI”) is an exemption from U.S. federal income tax for the lease of U.S. manufactured equipment to foreign lessees. ETI was repealed for years after 2004 with a reduced benefit allowable in 2005 and 2006 under transition rules.

State income taxes are provided on domestic pre-tax income or loss. The effect of state income tax on the overall income tax rate is impacted by the amount of domestic income subject to state taxes relative to total income from all sources.

NOTE 16.   Pension and Other Post-Retirement Benefits

GATX maintains both funded and unfunded noncontributory defined benefit pension plans covering its domestic employees and the employees of certain of its subsidiaries. GATX also has a funded noncontributory defined benefit pension plan related to a closed subsidiary in the United Kingdom (“U.K.”). The U.K. pension plan no longer has any active members and is closed to new entrants. Benefits payable under the pension plans are based on years of service and/or final average salary. The funding policy for the pension plans is based on actuarially determined cost methods allowable under IRS regulations and statutory regulations in the U.K.

In addition to the pension plans, GATX has other post-retirement plans providing health care, life insurance and other benefits for certain retired domestic employees who meet established criteria. Most domestic employees are eligible for health care and life insurance benefits if they retire from GATX with immediate benefits under the GATX pension plan. The plans are either contributory or noncontributory, depending on various factors.

In July 2007, amendments were made to the funded and unfunded plans for salaried employees to eliminate early retirement subsidies for benefits earned after June 30, 2007, and to add an option for lump sum payments. The effect of the plan amendments decreased the aggregate accumulated benefit obligation by $10.3 million.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

GATX uses a December 31, 2007 measurement date for all of its plans. The following tables set forth pension obligations and plan assets and other post-retirement obligations as of December 31 (in millions):

							2007			2006
	2007			2006			Retiree			Retiree
	Pension			Pension			Health			Health
	Benefits			Benefits			and Life			and Life
Change in Benefit Obligation
Benefit obligation at beginning of year	$	409.0		$	404.3		$	63.6		$	75.0
Service cost		5.4			5.9			0.3			0.2
Interest cost		23.3			22.7			3.5			3.6
Plan amendments		(10.3	)		—			1.1			(1.6	)
Actuarial (gain) loss		(13.3	)		(1.2	)		(7.8	)		(6.1	)
Curtailments		—			(2.8	)		—			(0.7	)
Benefits paid		(28.3	)		(25.7	)		(5.2	)		(6.8	)
Effect of exchange rate changes		0.7			5.8			—			—
Benefit obligation at end of year	$	386.5		$	409.0		$	55.5		$	63.6
Change in Fair Value of Plan Assets
Plan assets at beginning of year	$	407.5		$	376.9		$	—		$	—
Actual return on plan assets		29.7			49.7			—			—
Effect of exchange rate changes		0.6			4.7			—			—
Company contributions		2.2			1.9			5.2			6.8
Benefits paid		(28.3	)		(25.7	)		(5.2	)		(6.8	)
Plan assets at end of year	$	411.7		$	407.5		$	—		$	—
Funded Status
Funded status of the plan	$	25.2		$	(1.5	)	$	(55.5	)	$	(63.6	)
Unrecognized net loss		—			—			—			—
Unrecognized prior service cost		—			—			—			—
Unrecognized net transition obligation		—			—			—			—
Prepaid (accrued) cost	$	25.2		$	(1.5	)	$	(55.5	)	$	(63.6	)
Amount Recognized
Other assets	$	53.1		$	28.7		$	—		$	—
Other liabilities		(27.9	)		(30.2	)		(55.5	)		(63.6	)
Accumulative other comprehensive loss:
Net actuarial loss		46.4			62.0			4.2			12.6
Prior service (credit) cost		(9.5	)		0.2			(0.2	)		(1.5	)
Accumulated other comprehensive loss		36.9			62.2			4.0			11.1
Total recognized	$	62.1		$	60.7		$	(51.5	)	$	(52.5	)
After-tax amount recognized in accumulated other comprehensive loss	$	22.9		$	38.5		$	2.4		$	6.9

The aggregate accumulated benefit obligation for the defined benefit pension plans was $365.4 million and $383.5 million at December 31, 2007 and 2006, respectively.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Information for pension plans with a projected benefit obligation in excess of plan assets is as follows as of December 31 (in millions):

	2007		2006
Projected benefit obligation	$	70.1	$	70.6
Fair value of plan assets		42.2		40.4

Information for pension plans with an accumulated benefit obligation in excess of plan assets is as follows as of December 31 (in millions):

	2007		2006
Accumulated benefit obligations	$	66.0	$	66.2
Fair value of plan assets		42.2		40.4

The components of pension and other post-retirement benefit costs are as follows (in millions):

										2007			2006			2005
										Retiree			Retiree			Retiree
	2007			2006			2005			Health			Health			Health
	Pension			Pension			Pension			and			and			and
	Benefits			Benefits			Benefits			Life			Life			Life
Service cost	$	5.4		$	5.9		$	5.3		$	0.3		$	0.2		$	0.4
Interest cost		23.3			22.7			22.2			3.5			3.6			4.0
Expected return on plan assets		(30.9	)		(30.1	)		(30.1	)		—			—			—
Amortization of:
Unrecognized prior service (credit) cost		(0.5	)		0.2			0.2			(0.1	)		(0.2	)		—
Unrecognized net obligation		(0.1	)		—			—			—			—			—
Unrecognized net loss		3.6			5.3			3.0			0.6			1.0			1.0
Plan settlement cost		—			—			1.8			—			—			—
Ongoing net cost		0.8			4.0			2.4			4.3			4.6			5.4
Recognized gain due to curtailment		—			—			—			—			(0.7	)		—
Net periodic cost	$	0.8		$	4.0		$	2.4		$	4.3		$	3.9		$	5.4

The previous tables include amounts allocated each year to discontinued operations, all of which were immaterial. The amount reported for plan settlement cost in 2005 relates to a lump sum payment election made for the non-qualified portion of a pension benefit. Amounts shown for curtailment loss (gain) related to discontinued operations.

GATX amortizes the unrecognized prior service cost and the unrecognized net obligation using a straight-line method over the average remaining service period of employees expected to receive benefits under the plan. The excess of recognized net gains or losses (excluding asset gains and losses not yet reflected in the market-related value of assets) above the greater of 10% of the projected benefit obligation or 10% of the market-related value of the assets are amortized by dividing this excess, if any, by the average remaining service period of active employees. As of December 31, 2007, GATX expects to recognize the following accumulated other comprehensive loss (income) amounts within the next twelve months as components of net benefits costs: $1.4 million of the defined benefit pension plans’ net actuarial loss, $1.1 million of the defined benefit plans’ prior service credit, $0.3 million of the other post-retirement benefit plans’ net actuarial loss and $0.1 million of the other post-retirement benefit plans’ prior service credit.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

GATX used the following assumptions to measure the benefit obligation, compute the expected long-term return on assets and to measure the periodic cost for GATX’s defined benefit pension plans and other post-retirement benefit plans for the years ended December 31, 2007 and 2006:

	2007			2006
Domestic defined benefit pension plans:
Benefit Obligation at December 31:
Discount rate — salaried funded and unfunded plans		6.40	%		5.90	%
Discount rate — hourly funded plans		6.40	%		5.85	%
Rate of compensation increases — salaried funded and unfunded plan		4.50	%		4.50	%
Rate of compensation increases — hourly funded plan		N/A			N/A
Net Periodic Cost (Benefit) for the years ended December 31:
Discount rate — salaried funded and unfunded plans(a)		5.90	%/ 6.25%		5.75	%
Discount rate — hourly funded plans		5.85	%		5.65	%
Expected return on plan assets — salaried funded plan		8.75	%		8.80	%
Expected return on plan assets — hourly funded plan		7.90	%		8.00	%
Rate of compensation increases — salaried funded and unfunded plan		4.50	%		4.50	%
Rate of compensation increases — hourly funded plan		N/A			N/A
Foreign defined benefit pension plan:
Benefit Obligation at December 31:
Discount rate		5.80	%		5.10	%
Rate of pension-in-payment increases		3.40	%		3.10	%
Net Periodic Cost (Benefit) for the years ended December 31:
Discount rate		5.10	%		4.70	%
Expected return on plan assets		6.00	%		5.70	%
Rate of pension-in-payment increases		3.10	%		2.80	%
Other post-retirement benefit plans:
Benefit Obligation at December 31:
Discount rate		6.25	%		5.75	%
Rate of compensation increases		4.50	%		4.50	%
Net Periodic Cost (Benefit) for the years ended December 31:
Discount rate		5.75	%		5.60	%
Rate of compensation increases		4.50	%		4.50	%

(a) For the U.S. qualified salary plan, the discount rate was 5.90% for the period January 1 through June 30, 2007, and 6.25% for the period July 1 through December 31, 2007.

GATX determines a long-term rate of return assumption on plan assets for its funded pension plans based on current and expected asset allocations, as well as historical and expected returns on various categories of plan assets. GATX reviews historical markets as well as peer group data to determine its expected long-term rate of return for each of the plans. GATX routinely reviews its historical returns along with current market conditions to ensure its long-term rate of return assumption on plan assets is reasonable and appropriate.

The health care cost trend, which is comprised of medical and prescription drugs claims has a significant effect on the other post-retirement benefit cost and obligation. The assumed medical claims and prescription drug claims rates for 2007 were 7.50% and 12.00%, respectively. The assumed medical and prescription drugs claims cost rates

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

anticipated for 2008 will be 7.00% and 11.00%, respectively. Over the following five-year period, medical claims are expected to gradually decline to 5.00% and remain at that level thereafter. Over the following ten-year period, the prescription drug claims rates are expected to gradually decline to 5.00% and remain at that level thereafter.

A one-percentage-point change in the trend rate would have the following effects (in millions):

	One-Percentage-Point		One-Percentage-Point
	Increase		Decrease
Effect on total of service and interest cost	$	0.2	$	(0.1	)
Effect on post-retirement benefit obligation		2.8		(2.5	)

GATX’s investment policies require that asset allocations of domestic and foreign funded pension plans be maintained at certain targets. GATX’s weighted-average asset allocations of its domestic funded pension plans at December 31, 2007 and 2006, and current target asset allocation for 2008, by asset category, are as follows:

				Plan Assets at
				December 31
	Target			2007			2006
Asset Category
Equity securities		65.5	%		65.3	%		65.3	%
Debt securities		29.5	%		28.8	%		29.3	%
Real estate		5.0	%		5.8	%		5.2	%
Cash		—			0.1	%		0.2	%
		100.0	%		100.0	%		100.0	%

GATX’s weighted-average asset allocations of its foreign funded pension plan at December 31, 2007 and 2006, and current target asset allocation for 2008, by asset category, are as follows:

				Plan Assets at
				December 31
	Target			2007			2006
Asset Category
Equity securities and real estate		36.8	%		35.6	%		37.6	%
Debt securities		63.2	%		64.4	%		62.4	%
		100.0	%		100.0	%		100.0	%

The primary objective of the pension plans is to represent the exclusive interests of plan participants for the purpose of providing benefits to participants and their beneficiaries. To reach this goal, GATX’s philosophy is to invest in a diversified mix of equities, debt, and real estate investments to maximize return and to keep risk at a reasonable level over a long-term investment horizon. Its equity investments are diversified across U.S. and non-U.S.stocks as well as growth, value, and small to large capitalizations. Its debt securities are also diversified and include: governments, agencies, investment grade and high-yield corporate bonds, mortgage-back securities, and other collateralized investments. GATX’s real estate investments include investments in funds that are diversified by location and property type.

On a timely basis, but not less than twice a year, GATX formally reviews actual results to ensure adherence to investment guidelines and the Company’s stated investment approach. This review also evaluates reasonableness of investment decisions and risk positions. The performance of investments is compared to indices and peers to determine if performance has been acceptable.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

GATX expects to contribute approximately $2.2 million to its pension plans (domestic and foreign) and approximately $5.7 million to its other post-retirement benefit plans in 2008. Additional contributions to the domestic funded pension plans will be dependent on several factors including investment returns on plan assets and actuarial experience.

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid (in millions):

	Pension		Other
	Benefits		Benefits
2008	$	31.0	$	6.4
2009		31.0		6.4
2010		31.4		6.4
2011		30.9		6.2
2012		32.6		6.0
Years 2013-2017		161.6		26.5
	$	318.5	$	57.9

The following are estimated Medicare Part D Subsidies expected to be received as a result of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (in millions):

2008	$	0.7
2009		0.7
2010		0.7
2011		0.7
2012		0.7
Years 2013-2017		2.9
	$	6.4

In addition to its defined benefit plans, GATX maintains two 401(k) retirement plans that are available to substantially all salaried and certain other employee groups. GATX may contribute to the plans as specified by their respective terms, and as determined by the Board of Directors. Contributions to such plans were $1.5 million, $1.5 million, and $1.6 million for 2007, 2006, and 2005, respectively. Contributions to discontinued operations were immaterial in each year.

NOTE 17.   Concentrations and Commitments

Concentrations

Concentration of Revenues — GATX’s revenues are derived from a wide range of industries and companies. Approximately 22% of total revenues are generated from customers in the chemical industry, 22% are derived from the petroleum industry, and 10% are derived from each of the transportation industry and food/agricultural industry. GATX’s foreign identifiable revenues include railcar operations in Canada, Mexico, Poland, Austria and Germany. The Company did not derive revenues in excess of 10% of consolidated revenues from any one foreign country for any of the years ended December 31, 2007, 2006 and 2005.

Concentration of Credit Risk — Under its lease agreements with lessees, GATX retains legal ownership of the asset except where such assets have been financed by sale-leasebacks. For most loan financings to customers, the loan is collateralized by specifically related equipment. GATX performs credit evaluations prior to approval of a

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

lease or loan contract. Subsequently, the creditworthiness of the customer and the value of the collateral are monitored on an ongoing basis. GATX maintains an allowance for possible losses to provide for credit losses inherent in its reservable assets portfolio. The Company did not derive revenues in excess of 10% of consolidated revenues from any one customer for any of the years ended December 31, 2007, 2006 and 2005.

Concentration of Labor Force — 51% of GATX employees were covered by union contracts at December 31, 2007. The shipboard personnel at ASC belong to the United Steelworkers of America (“USWA”), the American Maritime Officers (“AMO”) and the Seafarers International Union (“SIU”), as the case may be. ASC has agreements with the SIU and AMO that are effective until 2011. The hourly employees at Rail’s U.S. service centers belong to the USWA and are operating under an agreement that is in effect through February 2010.

Commitments

Unconditional Purchase Obligations — At December 31, 2007, GATX’s unconditional purchase obligations of $545.2 million were primarily for railcars to be acquired during 2008 and 2009 (in millions):

	Payments Due by Period
	Total		2008		2009		2010		2011		2012		Thereafter
Rail	$	483.6	$	262.1	$	198.8	$	21.1	$	0.8	$	0.8	$	—
Specialty		61.6		61.6		—		—		—		—		—
	$	545.2	$	323.7	$	198.8	$	21.1	$	0.8	$	0.8	$	—

Commercial Commitments — In connection with certain investments or transactions, GATX has entered into various commercial commitments, such as guarantees and standby letters of credit, which could potentially require performance in the event of demands by third parties. Similar to GATX’s balance sheet investments, these guarantees expose GATX to credit, market and equipment risk; accordingly, GATX evaluates its commitments and other contingent obligations using techniques similar to those used to evaluate funded transactions.

The following table shows GATX’s commercial commitments for continuing operations (in millions):

	December 31
	2007		2006
Affiliate guarantees	$	20.7	$	24.2
Asset residual value guarantees		121.7		144.5
Lease payment guarantees		68.8		20.8
Other guarantees		77.8		77.8
Total guarantees		289.0		267.3
Standby letters of credit and bonds		17.7		15.8
	$	306.7	$	283.1

At December 31, 2007, the maximum potential amount of guarantees under which GATX could be required to perform was $289.0 million. The related carrying value of the guarantees on the balance sheet, including deferred revenue primarily associated with residual value guarantees entered into prior to the effective date of FASB Interpretation No. 45 (FIN 45), Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness to Others, was a liability of $0.9 million. The expirations of these guarantees range from 2008 to 2017.

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Affiliate guarantees generally involve guaranteeing repayment of the financing utilized to acquire or lease in assets being leased by an affiliate to customers, and are in lieu of making direct equity investments in the affiliate. GATX is not aware of any event of default which would require it to satisfy these guarantees, and expects the affiliates to generate sufficient cash flow to satisfy their lease and loan obligations.

Asset residual value guarantees represent GATX’s commitment to third parties that an asset or group of assets will be worth a specified amount at the end of a lease term. Revenue is earned for providing these asset value guarantees in the form of an initial fee (which is amortized into income over the guarantee period) and by sharing in any proceeds received upon disposition of the assets to the extent such proceeds are in excess of the amount guaranteed (which is recorded when realized). Any liability resulting from GATX’s performance pursuant to the residual value guarantees will be reduced by the value realized from the underlying asset or group of assets. Historically, gains associated with the residual value guarantees have exceeded any losses and were recorded in asset remarketing income in the consolidated statements of operations. Based on known facts and current market conditions, management does not believe that the asset residual value guarantees will result in any significant adverse financial impact to the Company. GATX believes these asset residual value guarantees will likely generate future income in the form of fees and residual sharing proceeds.

Lease payment guarantees represent GATX’s guarantees to financial institutions of finance and operating lease payments of unrelated parties in exchange for a fee.

Other consists of GATX’s indemnification of Airbus S.A.S. (“Airbus”) for amounts Airbus may be required to pay under certain specified circumstances to GATX Flightlease Aircraft Ltd., a joint venture partially owned by GATX (“GFAC”), in connection with an aircraft purchase contract entered into by GFAC and Airbus in 2001. GATX’s indemnification obligation is capped at approximately $77.8 million. No liability has been recorded with respect to this indemnification as GATX believes that the likelihood of having to perform under the indemnity is remote. The aircraft purchase contract, and other agreements relating thereto, have been the subject of various litigation proceedings that are described in Note 18.

GATX and its subsidiaries are also parties to standing letters of credit and bonds primarily related to workers’ compensation and general liability insurance overages. No material claims have been made against these obligations. At December 31, 2007, management does not expect any material losses to result from these off balance sheet instruments since performance is not expected to be required.

NOTE 18.   Legal Proceedings and Other Contingencies

Legal — Various legal actions, claims, assessments and other contingencies arising in the ordinary course of business, including certain matters more fully described below, are pending against GATX and certain of its subsidiaries. These matters are subject to many uncertainties, and it is possible that some of these matters could ultimately be decided, resolved or settled adversely.

Flightlease Litigation

In 1999, GATX Third Aircraft Corporation (“Third Aircraft”), an indirect wholly owned subsidiary of GATX Financial Corporation (“GFC”, which merged into GATX in 2007), entered into a joint venture agreement with Flightlease Holdings (Guernsey) Ltd. (“FHG”), an indirect wholly owned subsidiary of the SAirGroup, and formed a joint venture entity, GATX Flightlease Aircraft Ltd. (“GFAC”) to purchase a number of aircraft. In September 1999, GFAC entered into an agreement (the “GFAC Agreement”) with Airbus S.A.S. (“Airbus”) and by October 1, 2001, GFAC had ordered a total of 41 aircraft (the “GFAC Aircraft”) from Airbus and had made aggregate unutilized pre-delivery payments (“PDPs”) to Airbus of approximately $227.6 million. Subsequently, on October 4, 2001, the joint venture partners entered into an agreement (the “Split Agreement”) pursuant to which the parties agreed (i) to divide responsibility for the GFAC Aircraft, (ii) to allocate the PDPs between them in the amounts of

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

approximately $77.8 million to Third Aircraft and approximately $149.8 million to FHG, and (iii) that each would enter into separate agreements with Airbus to purchase its allocated aircraft or equivalent aircraft (such aircraft allocated to Third Aircraft being the “GATX Allocated Aircraft”). Subsequently, GFC and an affiliate of Airbus entered into a new purchase agreement for the GATX Allocated Aircraft (the “GATX Agreement”) and GFC received a credit of $77.8 million of the PDPs towards the acquisition of the aircraft. In connection with the GATX Agreement, GFC agreed that in certain specified circumstances it would pay to Airbus any amount up to $77.8 million which Airbus is required to pay to GFAC in reimbursement of PDPs paid by GFAC with respect to the GATX Allocated Aircraft (such agreement being the “Reimbursement Agreement”). Under the Split Agreement, FHG was to take the benefit of the remaining PDPs allocated to it (approximately $149.8 million) and enter into a new contract with Airbus but, following SAirGroup’s bankruptcy, FHG did not enter into such a contract, and Airbus then declared GFAC in default and retained the approximately $149.8 million in PDPs held by it as damages.

On October 10, 2005, GFAC filed a complaint in the Supreme Court of the State and County of New York against Airbus alleging that Airbus’ termination of the GFAC Agreement was wrongful and seeking restitution and damages in an unspecified amount in the “millions of dollars.” On December 7, 2005, FHG, acting by its liquidators (the “FHG Liquidators”), filed a motion to intervene and an accompanying complaint, which was granted on February 16, 2006 (the “Airbus Action”). Fact discovery in the Airbus Action is largely complete and cross motions for summary judgment are currently pending. Should GFAC ultimately succeed in recovering from Airbus those PDPs with respect to the GATX Allocated Aircraft, GATX, as a successor in interest to GFC, may be obligated to make a payment to Airbus under the Reimbursement Agreement in an amount equal to the lesser of (x) the amount so recovered or (y) approximately $77.8 million. The Company believes it unlikely that Airbus will be required to make such a payment to GFAC and the Company further believes that Third Aircraft, as a 50% owner of GFAC, should recover at least such amount from GFAC if it prevails in the Airbus Action.

On October 14, 2005, the FHG Liquidators filed a complaint in the United States District Court for the Northern District of California, purportedly as a derivative complaint on behalf of GFAC, against GFC, Third Aircraft, and Mr. James H. Morris and Mr. Alan M. Reinke, then officers of a division of GFC (the “FHG Action”). The complaint alleged that Messrs. Morris and Reinke, as directors of GFAC, breached their fiduciary duties and that GFC and Third Aircraft knowingly assisted such breaches, thereby depriving GFAC of assets. The complaint seeks damages in an amount including, but not necessarily limited to, approximately $227.6 million. Messrs. Morris and Reinke are indemnified against losses they suffer or incur as a result of their service as GFAC directors. The Company believes there is no valid basis for any claim made by the FHG Liquidators in the complaint against GFC, Third Aircraft, and/or Messrs. Morris and Reinke.

The parties to the FHG Action entered into a Tolling and Standstill Agreement (the “Tolling Agreement”) in October of 2006 which, among other things, provides for a standstill of claims or potential claims until the conclusion of the Airbus Action described above. The Tolling Agreement does not resolve the merits or liability for (or against) any claims nor require payment of any monetary damages by any party to another party

The Company believes that the likelihood of loss with respect to these matters is remote and as a result has not recorded any accrual as of December 31, 2007. While it is reasonably possible that the Company may ultimately incur a loss in these matters, at this time an estimate of the amount of such loss cannot be made.

Polskie Koleje Panstwowe S.A. v. DEC sp. z o.o.

In December 2005, Polskie Koleje Panstwowe S.A. (“PKP”) filed a complaint, Polskie Koleje Panstwowe S.A. v. DEC sp. z o.o., in the Regional Court in Warsaw, Poland against DEC sp. z o.o. (“DEC”), an indirect wholly owned subsidiary of the Company, currently named GATX Rail Poland, sp. Zo.o. The complaint alleges that, prior to GATX’s acquisition of DEC in 2001, DEC breached a Conditional Sales Agreement (“Agreement”) to purchase shares of Kolsped S.A. (the “Kolsped”) which was an indirect subsidiary of PKP. The condition allegedly breached required DEC to obtain a release of Kolsped’s ultimate parent company, PKP, from its guarantee of Kolsped’s

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

promissory note securing a $9.8 million bank loan. Pursuant to an amendment to the Agreement, DEC satisfied this condition by providing PKP with a blank promissory note (the “DEC Note”) and a promissory note declaration which allowed PKP to fill in the DEC Note up to $10 million in the event a demand was made upon it as guarantor of Kolsped’s note to the bank (“Kolsped Note”). On November 7, 2002, the then current holder of the Kolsped Note, a bank, secured a judgment against PKP.

After exhausting its appeals of the judgment entered against it, PKP filed suit against DEC alleging that DEC failed to fulfill its obligation to release PKP as a guarantor of the Kolsped Note, and is purportedly liable to PKP, as a third party beneficiary of the Agreement, for approximately $36 million, the amount, based on current exchange rates, including interest and costs, PKP allegedly paid to the bank. On February 20, 2006, DEC answered the complaint, denying the material allegations and raising numerous defenses including, among others, that: (i) the Agreement did not create an actionable obligation, but rather was a condition precedent to the purchase of shares in Kolsped; (ii) DEC fulfilled that condition by issuing the DEC Note, which was subsequently lost by PKP and declared invalid by a Polish court; (iii) PKP was not a third party beneficiary of the Agreement; and (iv) the action is barred by the governing limitations period. The trial is scheduled to commence on March 5, 2008.

GATX Rail Poland intends to vigorously defend this lawsuit. However, the Company has recorded an accrual for $10 million representing management’s best estimate of a probable settlement amount. While the ultimate resolution of this matter for an amount in excess of this accrual is possible, the Company believes that any such excess would not be material to its financial position or liquidity. However, such resolution could have a material adverse effect on the results of operations in a particular quarter or fiscal year.

Other Litigation

GATX and its subsidiaries have been named as defendants in a number of other legal actions and claims, various governmental proceedings and private civil suits arising in the ordinary course of business, including those related to environmental matters, workers’ compensation claims by GATX employees and other personal injury claims. Some of the legal proceedings include claims for punitive as well as compensatory damages.

Several of the Company’s subsidiaries have also been named as defendants or co-defendants in cases alleging injury relating to asbestos. In these cases, the plaintiffs seek an unspecified amount of damages based on common law, statutory or premises liability or, in the case of ASC, the Jones Act, which makes limited remedies available to certain maritime employees. In addition, demand has been made against the Company under limited indemnities for asbestos related claims given in connection with the sale of subsidiaries. As of February 15, 2008, there were 1,331 asbestos-related cases pending against the Company’s current or former subsidiaries. Out of the total number of pending cases, 1,203 are Jones Act claims, most of which were filed against ASC prior to the year 2000. During 2007, 47 new asbestos-related cases were filed and 70 cases were dismissed or settled. During 2006, 124 new asbestos-related cases were filed and 112 cases were dismissed or settled. During 2005, 22 new cases were filed and 46 cases were dismissed or settled. For this three year period, the aggregate amount paid to settle asbestos-related cases filed against the Company’s subsidiaries and the former subsidiary was less than $290,000. It is possible that the number of these cases could begin to grow and that the cost of these cases, including costs to defend, could correspondingly increase in the future.

The amounts claimed in some of the above described proceedings are substantial and, while the final outcome of these matters cannot be predicted with certainty at this time, considering among other things, meritorious legal defenses and applicable insurance coverage, it is the opinion of management that none of these matters, when ultimately resolved, will have a material adverse effect on GATX’s consolidated financial position or liquidity. It is possible, however, that the ultimate resolution of one or more of these matters could have a material adverse effect on the results of operations in a particular quarter or fiscal year.

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Accruals and Reserves

The Company has recorded accruals totaling $11.7 million at December 31, 2007, for losses related to those litigation matters the Company believes to be probable and for which the amount of loss can be reasonably estimated. Although the ultimate amount of liability that may result from these matters cannot be predicted with absolute certainty, it is the opinion of management that none of these matters, when ultimately resolved, will have a material adverse effect on GATX’s consolidated financial position or liquidity. It is possible, however, that the ultimate resolution of one or more of these matters could have a material adverse effect on the Company’s results of operations in a particular quarter or fiscal year.

Environmental — The Company’s operations are subject to extensive federal, state and local environmental regulations. GATX’s operating procedures include practices to protect the environment from the risks inherent in railcar leasing, which frequently involve transporting chemicals and other hazardous materials. Additionally, some of GATX’s land holdings, including previously owned properties, are and have been used for industrial or transportation-related purposes or leased to commercial or industrial companies whose activities may have resulted in discharges onto the property. As a result, GATX is subject to environmental cleanup and enforcement actions. In particular, the federal Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), also known as the Superfund law, as well as similar state laws, generally impose joint and several liability for cleanup and enforcement costs on current and former owners and operators of a site without regard to fault or the legality of the original conduct. If there are other potentially responsible parties (“PRPs”), GATX generally participates in the cleanup of these sites through cost-sharing agreements with terms that vary from site to site. Costs are typically allocated based on the relative volumetric contribution of material, the amount of time the site was owned or operated, and/or the portion of the total site owned or operated by each PRP. GATX has been notified that it is a PRP, among many PRPs, for study and cleanup costs at three Superfund sites for which investigation and remediation payments have yet to be determined.

At the time a potential environmental issue is identified, initial reserves for environmental liability are established when such liability is probable and a reasonable estimate of associated costs can be made. Costs are estimated based on the type and level of investigation and/or remediation activities that our internal environmental staff (and where appropriate, independent consultants) have determined to be necessary to comply with applicable laws and regulations. Activities include initial site surveys and environmental studies of potentially contaminated sites as well as costs for remediation and restoration of sites determined to be contaminated. In addition, GATX has provided indemnities for potential environmental liabilities to buyers of divested companies. In these instances, reserves are based on the scope and duration of the respective indemnities together with the extent of known contamination. Estimates are periodically reviewed and adjusted as required to reflect additional information about facility or site characteristics or changes in regulatory requirements. GATX conducts an ongoing environmental contingency analysis, which considers a combination of factors including independent consulting reports, site visits, legal reviews, analysis of the likelihood of participation in and the ability of other PRPs to pay for cleanup, and historical trend analyses. GATX does not believe that a liability exists for known environmental risks beyond what has been provided for in its environmental reserves.

GATX is involved in administrative and judicial proceedings and other voluntary and mandatory cleanup efforts at 14 sites, including the Superfund sites, at which it is participating in the study or cleanup, or both, of alleged environmental contamination. As of December 31, 2007, GATX has recorded accruals of $34.7 million for remediation and restoration of all known sites. These amounts are included in other liabilities on GATX’s balance sheet. GATX’s environmental liabilities are not discounted.

The Company did not materially change its methodology for identifying and calculating environmental liabilities in the three years presented. There are currently no known trends, demands, commitments, events or uncertainties that are reasonably likely to occur and materially affect the methodology or assumptions described above.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Recorded liabilities include GATX’s best estimates of all costs for remediation and restoration of affected sites, without reduction for anticipated recoveries from third parties, and include both asserted and unasserted claims However, GATX’s total cleanup costs at these sites cannot be predicted with certainty due to various factors such as the extent of corrective actions that may be required; evolving environmental laws and regulations; advances in environmental technology, the extent of other parties’ participation in cleanup efforts; developments in ongoing environmental analyses related to sites determined to be contaminated, and developments in environmental surveys and studies of potentially contaminated sites. As a result, future charges for environmental liabilities could have a significant effect on results of operations in a particular quarter or fiscal year as individual site studies and remediation and restoration efforts proceed or as new sites arise. However, management believes it is unlikely any identified matters, either individually or in the aggregate, will have a material adverse effect on GATX’s financial position or liquidity.

NOTE 19.   Shareholders’ Equity

On January 17, 2007, the Company’s Board of Directors authorized a $300 million common stock repurchase program, which was completed as of August 31, 2007, with an aggregate of 6.3 million shares having been repurchased. The repurchased shares were recorded as treasury stock under the cost method. On January 23, 2008, the Company’s Board of Directors authorized a $200 million share repurchase program expected to be completed in 2008.

Upon maturity in February 2007, substantially all the holders of the 2002 Notes converted, resulting in a cash payment of $124.3 million for the principal balance and the issuance of 1.0 million shares of GATX common stock for the conversion premium. Also, in 2007, $18.2 million of the 2003 Notes converted, resulting in a cash payment of $18.2 million for the principal balance and 0.4 million shares issued for the conversion premium. See Note 13 for additional information.

In accordance with GATX’s amended certificate of incorporation, 120 million shares of common stock are authorized, at a par value of $0.625 per share. As of December 31, 2007, 62.2 million shares were issued and 47.9 million shares were outstanding.

A total of 14.1 million shares of common stock were reserved at December 31, 2007, for the following:

	Shares
	(In millions)
Conversion of outstanding preferred stock		0.1
Conversion of convertible notes		9.9
Incentive compensation programs		4.1
Employee service awards		—
		14.1

The reserve for incentive compensation programs consists of shares authorized and available for future issuance under the GATX Corporation 2004 Equity Incentive Compensation Plan and other share-based compensation awards granted but not yet issued. See Note 21 for additional information.

GATX’s certificate of incorporation also authorizes five million shares of preferred stock at a par value of $1.00 per share. At December 31, 2007 and 2006, 18,216 and 19,008 shares of preferred stock were outstanding, respectively. Shares of preferred stock issued and outstanding consist of Series A and B $2.50 cumulative convertible preferred stock, which entitle holders to a cumulative annual cash dividend of $2.50 per share. Each share is convertible at the option of the holder at any time into five shares of common stock. Each share of such preferred stock may be called for redemption by GATX at any time at $63.00 per share. In the event of GATX’s

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

liquidation, dissolution or winding up, the holders of such preferred stock will be entitled to receive $60.00 per share plus accrued and unpaid dividends to the date of payment. At December 31, 2007 and 2006, the aggregated liquidation preference of both series’ of preferred stock was $1.1 million.

Holders of both preferred and common stock are entitled to one vote for each share held. Except in certain instances, all such classes of stock vote together as a single class.

To ensure the fair value to all shareholders in the event of an unsolicited takeover offer for the Company, GATX adopted a Shareholders’ Rights Plan in August 1998. Shareholders received a distribution of one right for each share of the Company’s common stock held. Initially the rights are represented by GATX’s common stock certificates and are not exercisable. The rights will be exercisable only if a person acquires or announces a tender offer that would result in beneficial ownership of 20 percent or more of the Company’s common stock. If a person acquires beneficial ownership of 20 percent or more of the Company’s common stock, all holders of rights other than the acquiring person will be entitled to purchase the Company’s common stock at a reduced price. The rights are scheduled to expire on August 14, 2008.

NOTE 20.   Accumulated Other Comprehensive Income (Loss)

The change in components for accumulated other comprehensive income (loss) are as follows (in millions):

	Foreign						Unrealized			Post-
	Currency			Unrealized			Loss on			Retirement
	Translation			Gain (Loss)			Derivative			Benefit
	Gain (Loss)			on Securities			Instruments			Plans			Total
Balance at December 31, 2004	$	68.8		$	3.9		$	(44.1	)	$	(7.0	)	$	21.6
Change in component		(38.0	)		(0.6	)		18.7			(2.1	)		(22.0	)
Reclassification adjustments into earnings		0.7			(4.4	)		3.2			—			(0.5	)
Income tax effect		—			1.9			(8.1	)		0.8			(5.4	)
Balance at December 31, 2005		31.5			0.8			(30.3	)		(8.3	)		(6.3	)
Change in component		33.0			(0.9	)		7.2			(59.9	)		(20.6	)
Reclassification adjustments into earnings		—			(1.0	)		2.2			—			1.2
Income tax effect		—			0.7			(1.2	)		22.8			22.3
Balance at December 31, 2006		64.5			(0.4	)		(22.1	)		(45.4	)		(3.4	)
Change in component		70.0			0.7			(33.9	)		32.4			69.0
Reclassification adjustments into earnings		—			0.3			28.9			—			29.3
Income tax effect		—			(0.4	)		3.9			(12.3	)		(8.7	)
Balance at December 31, 2007	$	134.5		$	0.2		$	(23.2	)	$	(25.3	)	$	86.2

NOTE 21.   Share-Based Compensation

GATX provides equity awards to its employees under the GATX Corporation 2004 Equity Incentive Compensation Plan, as amended (the “2004 Plan”). An aggregate of 3.5 million shares of common stock is authorized under the 2004 Plan and as of December 31, 2007, 2.2 million shares were available for future issuance. The 2004 Plan provides for the granting of nonqualified stock options, stock appreciation rights (“SARs”), restricted stock and phantom stock awards. These awards are more fully described below.

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Stock Option/SAR Awards

Stock options/SARs provide for the purchase of common stock and may be granted for periods not longer than seven years from the date of grant (ten years for options granted prior to 2004). SARs entitle the holder to receive the difference between the market price of GATX’s stock at the time of exercise and the exercise price, either in shares of common stock, cash or a combination thereof, at GATX’s discretion. Options entitle the holders to purchase shares of GATX stock at a specified exercise price. The exercise price for both options and SARs is equal to the average of the high and low trading prices of GATX stock on the date of grant. Options/SARs vest and become exercisable commencing on a date no earlier than one year from the date of grant. Compensation expense for these awards is recognized on a graded straight line basis over the applicable vesting period. The vesting period for 2006 grants and prior is three years with 50% vesting after the first year, 25% after the second year and 25% after the third year. The 2007 grants vest ratably over three years. Dividends accrue on all stock options/SARs granted under the 2004 Plan and are paid upon vesting. Dividends continue to be paid until the options/SARs are exercised, cancelled or expired. During 2006 and 2007, only SARs were awarded.

GATX values its stock option/SAR awards using the Black-Scholes model. The Black-Scholes model is one of the most frequently referenced models used to value options and was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. Option valuation models require the input of highly subjective assumptions. The assumptions GATX used in valuing its option/SAR awards were: expected stock price volatility (based on the historical volatility of its stock price), the risk free interest rate (based on the treasury yield curve) and the expected life of the option/SAR (based on historical exercise patterns and post-vesting termination behavior). Additionally, because GATX’s options/SARs are dividend participating, the value of each option/SAR also reflects the present value of the expected dividends to be paid during the estimated life of the option/SAR.

The assumptions GATX used to estimate the fair value of its stock option/SAR awards and the weighted average estimated fair value are noted in the table below:

	2007			2006			2005
Weighted average fair value of SAR/option	$	17.29		$	15.82		$	12.14
Annual dividend	$	0.96		$	0.84		$	0.80
Expected life of the option, in years		4.7			5.2			5.3
Risk free interest rate		4.47	%		4.77	%		4.31	%
Dividend yield		2.10	%		2.20	%		3.80	%
Expected stock price volatility		31.88	%		33.55	%		34.08	%

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Certain data with respect to stock options/SARs activity for the year ended December 31, 2007, are set forth below:

						Weighted
						Average
						Remaining
				Weighted		Contractual
	Number of			Average		Term		Aggregate Intrinsic
	Options/SARs			Exercise Price		(Years)		Value
	(In thousands)							(In thousands)
Outstanding at beginning of period		2,181		$	32.88
Granted		218			46.81
Exercised		(712	)		31.98			$	12,133
Forfeited/Cancelled		(43	)		35.49
Expired		(17	)		31.01
Outstanding at end of period		1,627			35.09		4.0		8,682
Vested and Exercisable at the end of the period		1,274			32.98		3.6		8,052

The total intrinsic value of options exercised during the years ended December 31, 2007, 2006 and 2005, was $12.1 million, $13.7 million and $10.4 million, respectively. The intrinsic value of a stock option is defined as the difference between its current market value and its exercise price. As of December 31, 2007, there was $3.4 million of unrecognized compensation expense related to nonvested options/SARs, which is expected to be recognized over a weighted average period of 1.8 years.

Restricted Stock and Performance Share Awards

Restricted stock may be granted to key employees, entitling them to receive a specified number of restricted shares of common stock. Restricted shares of common stock carry all dividend and voting rights, but are not transferable prior to the expiration of a specified restriction period, generally three years, as determined by the Compensation Committee of the Board of Directors (“Compensation Committee”). Dividends accrue on all restricted shares and are paid upon vesting. Compensation expense is recognized for these awards over the applicable restriction period.

Performance shares may be granted to key employees to focus attention on the achievement of certain strategic objectives. The shares are converted to restricted common stock based on the achievement of predetermined performance goals at the end of a specified performance period as determined by the Compensation Committee. Full vesting of the restricted stock may then be subject to an additional service period, ending no later than the third anniversary of the grant, absent the occurrence of certain events such as retirement, death or disability. Performance shares do not carry voting rights. Dividends accrue on all performance shares and are paid upon vesting. Performance shares are valued based on the closing price for GATX’s stock on the grant date. An estimate of the number of shares expected to vest as a result of actual performance against the performance criteria is made at the time of grant to determine total compensation expense to be recognized. The estimate is re-evaluated annually and total compensation expense is adjusted for any changes in the estimate, with a cumulative catch up adjustment (i.e., the cumulative effect of applying the change in estimate retrospectively) recognized in the period of change. Compensation expense is recognized for these awards over the applicable vesting period, generally three years.

GATX values its restricted stock and performance share awards based on the closing price of its stock on the grant date. As of December 31, 2007, there was $5.3 million of unrecognized compensation expense related to these awards, which is expected to be recognized over a weighted average period of 1.7 years.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Certain data with respect to restricted stock and performance share activity for the year ended December 31, 2007, are set forth below:

				Weighted Average
	Number of Share			Grant-Date Fair
	Units Outstanding			Value
Restricted Stock:
Nonvested at beginning of the period		108,062		$	35.64
Granted		67,920			46.69
Vested		(6,834	)		31.29
Forfeited		(9,351	)		38.91
Nonvested at end of period		159,797			40.33
Performance Shares:
Nonvested at beginning of the period		119,546		$	35.43
Granted		55,270			46.60
Increase due to estimated performance		29,948			38.71
Vested		(76,942	)		32.96
Forfeited		(2,406	)		44.16
Nonvested at end of period		125,416			42.08

The total fair value of restricted and performance shares vested during the years ended December 31, 2007, 2006 and 2005, was $3.2 million, $3.7 million and $0.6 million, respectively.

Phantom Stock Awards

Phantom stock is granted to non-employee directors as a portion of their compensation for service on GATX’s Board. In accordance with the terms of the phantom stock awards, each director is credited with a quantity of units that equate to, but are not, common shares in the Company. Phantom stock awards are dividend participating with all dividends reinvested in additional phantom shares at the average of the high and low trading prices of GATX stock on the dividend payment date. Settlement of whole units of phantom stock will be made in shares of common stock and fractional units will be paid in cash at the expiration of each director’s service on the Board and/or in accordance with his or her deferral election. In 2007, GATX granted 17,946 units of phantom stock and 115,358 units were outstanding as of December 31, 2007.

NOTE 22.   Discontinued Operations

In 2006, GATX agreed to sell the majority of its aircraft leasing business to Macquarie Aircraft Leasing Limited (“MALL”). The sale was completed in two stages: the sale of wholly owned aircraft closed on November 30, 2006, and the sale of partnered aircraft closed on January 17, 2007. Separately in 2006, GATX sold 26 wholly owned and partnered aircraft and its interest in Pembroke Group, a 50% owned aircraft leasing affiliate. These events resulted in the disposition of GATX’s aircraft leasing operation (formerly the “Air” segment). Accordingly, Air has been segregated and classified as discontinued operations for all periods presented.

GATX had been in the commercial aircraft leasing business since 1968, building a valuable operating lease platform and portfolio of aircraft. GATX believes that, relative to competitors in the industry, its lower scale and higher cost of capital resulted in a competitive disadvantage and that the sale of the Air business will enable it to realize greater value for its shareholders than could have been realized from continuing to own and operate the business. Gross proceeds from these sales in 2006 totaled $1.3 billion, of which approximately $800 million was

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

used to retire debt and pay transaction costs. The remaining proceeds, including $229.9 million received in 2007, were primarily used to fund new investments in rail, marine and industrial assets and to repurchase GATX common stock under a $300 million stock repurchase program initiated in 2007.

The following table summarizes certain operating data for Discontinued Operations (in millions).

	Years Ended December 31
	2007			2006			2005
Revenues	$	0.6		$	133.5		$	133.9
Loss before taxes		(5.7	)		(8.9	)		(198.7	)
(Loss) income from operations, net of taxes	$	(0.8	)	$	32.1		$	(0.5	)
Gain (loss) on disposal of segment, net of taxes		18.7			(70.9	)		(119.4	)
Net income (loss) from discontinued operations	$	17.9		$	(38.8	)	$	(119.9	)

In 2007, income on disposal of segment primarily consisted of a $20.9 million reversal of accrued income taxes resulting from an enacted change in federal income tax regulations and the finalization of the tax effects of the Air sale. In 2006, loss on disposal of segment was comprised primarily of $60.3 million ($70.9 million including tax effects) of losses realized on dispositions and in 2005, was comprised primarily of impairment charges of $196.4 million ($119.4 million after tax).

Results of discontinued operations reflect directly attributable revenues, ownership, operating, interest and SG&A expenses and income taxes. Results also reflect intercompany allocations for interest and certain SG&A expenses. Interest expense allocated was zero, $16.4 million and $26.7 million for 2007, 2006 and 2005, respectively. Interest was allocated consistent with GATX’s risk adjusted approach for continuing operations. SG&A allocated was zero, $6.1 million and $6.9 million for 2007, 2006 and 2005, respectively. SG&A was allocated based on management’s best estimate and judgment of the direct cost of support services provided to discontinued operations and amounts allocated approximate the amounts expected to be eliminated from continuing operations.

The following tables summarize the components of discontinued operations reported on the consolidated statements of cash flows (in millions):

	2007			2006			2005
Operating Activities
Net cash (used in) provided by operating activities	$	(48.1	)	$	91.4		$	97.0
Investing Activities
Portfolio investments and capital additions		—			(94.2	)		(17.3	)
Proceeds from disposal of segment		229.9			1,307.5			9.1
Proceeds from other investing activities		—			50.0			90.9
Net cash provided by investing activities		229.9			1,263.3			82.7
Financing Activities
Net cash used in financing activities		—			(796.0	)		(82.4	)
Cash provided by discontinued operations, net	$	181.8		$	558.7		$	97.3

Net cash provided by discontinued operations of $181.8 million in 2007 consisted primarily of $227.1 million of proceeds received from the disposition of the Air segment, partially offset by $33.8 million of allocated federal income tax payments, with the balance relating to the payment of accrued sale liabilities and current year operating losses.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

NOTE 23.   Earnings per Share

Basic earnings per share were computed by dividing net income available to common shareholders by the weighted average number of shares of common stock outstanding during each year. Shares issued or reacquired during the year, if applicable, were weighted for the portion of the year that they were outstanding. Diluted earnings per share give effect to potentially dilutive securities, including, convertible preferred stock, stock options, SARs, restricted stock and convertible debt.

At December 31, 2007, GATX had $106.8 million of senior unsecured notes, which were contingently convertible into 4,304,004 common shares at a price of $24.81 per share. The conversion details are discussed in Note 13.

At December 31, 2006, GATX had $124.3 million of senior unsecured notes that were convertible into 3,647,375 common shares at a price of $34.09 per share. These notes matured in February 2007, resulting in a cash payment equal to the principal balance and the issuance of 1.0 million shares for the difference between GATX’s stock price at the time of conversion and the conversion price.

On January 17, 2007, the Company’s Board of Directors authorized a $300 million common stock repurchase program. As of August 31, 2007, the repurchase program was completed with an aggregate of 6.3 million shares having been repurchased. The repurchased shares were recorded as treasury stock under the cost method. On January 23, 2008, the Company’s Board of Directors authorized a $200 million share repurchase program expected to be completed in 2008.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table sets forth the computation of basic and diluted net income (loss) per common share (in millions, except per share amounts):

	Year Ended December 31
	2007		2006			2005
Numerator:
Income from continuing operations	$	185.8	$	151.4		$	106.0
Income (loss) from discontinued operations		17.9		(38.8	)		(119.9	)
Less: Dividends paid and accrued on preferred stock		*		*			0.1
Numerator for basic earnings per share — income (loss) available to common shareholders	$	203.7	$	112.6		$	(14.0	)
Effect of dilutive securities:
Add: Dividends paid and accrued on preferred stock		*		*			0.1
After-tax interest expense on convertible securities		4.5		12.7			12.9
Numerator for diluted earnings per share — income (loss) available to common shareholders	$	208.2	$	125.3		$	(1.0	)
Denominator:
Denominator for basic earnings per share — weighted average shares		49.9		51.0			50.1
Effect of dilutive securities:
Equity compensation plans		0.6		0.8			0.5
Convertible preferred stock		0.1		0.1			0.1
Convertible securities		4.8		10.2			10.3
Denominator for diluted earnings per share — adjusted weighted average and assumed conversion		55.4		62.1			61.0
Basic earnings per share:
Income from continuing operations	$	3.73	$	2.97		$	2.12
Income (loss) from discontinued operations		0.36		(0.76	)		(2.40	)
Total basic earnings per share	$	4.09	$	2.21		$	(0.28	)
Diluted earnings per share:
Income from continuing operations	$	3.44	$	2.65		$	1.94
Income (loss) from discontinued operations		0.32		(0.63	)		(1.96	)
Total diluted earnings per share	$	3.76	$	2.02		$	(0.02	)

* Less than $0.1 million.

NOTE 24.   Foreign Operations

GATX has a number of investments in subsidiaries and affiliated companies that are located in, or derive revenues from, various foreign countries. GATX’s foreign identifiable assets include investments in affiliated companies as well as railcar operations in Canada, Mexico, Poland, Austria and Germany, and foreign leases, loans and other investments. Foreign entities contribute significantly to GATX’s share of affiliates’ earnings. Revenues and identifiable assets are determined to be foreign or U.S. based upon location of the customer; classification of affiliates’ earnings as foreign or domestic is made based on the office location of the affiliate.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company did not derive revenues in excess of 10% of consolidated revenues from continuing operations from any one foreign country for the years ended December 31, 2007, 2006 and 2005. At December 31, 2007, 11.0% of the Company’s identifiable assets were in Germany. At December 31, 2006, no foreign country represented more than 10% of GATX’s identifiable assets from continuing operations. At December 31, 2005, 12.2% of the Company’s identifiable assets were in Canada and 10.4% were in Germany.

The table below presents certain GATX data for continuing operations (in millions):

	Year Ended or at December 31
	2007		2006		2005
Revenues
Foreign	$	293.3	$	253.8	$	215.2
United States		959.5		899.2		814.2
	$	1,252.8	$	1,153.0	$	1,029.4
Share of Affiliates’ Earnings
Foreign	$	70.8	$	64.2	$	62.1
United States		22.4		11.9		11.6
	$	93.2	$	76.1	$	73.7
Identifiable Balance Sheet Assets
Foreign	$	1,790.3	$	1,614.6	$	1,465.8
United States		2,935.3		2,800.2		2,074.7
	$	4,725.6	$	4,414.8	$	3,540.5

Foreign generated cash flows are used to meet local operating needs and for reinvestment. For non-U.S. dollar functional currency entities, the translation of the financial statements into U.S. dollars results in an unrealized foreign currency translation adjustment, which is a component of accumulated other comprehensive income (loss).

NOTE 25.   Financial Data of Business Segments

The financial data presented below conforms to SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information, and depicts the profitability, financial position and capital expenditures of each of GATX’s continuing business segments.

GATX leases, operates and manages long-lived, widely used assets in the rail, marine and industrial equipment markets. GATX also invests in joint ventures that complement existing business activities. Headquartered in Chicago, Illinois, GATX has three financial reporting segments: Rail, Specialty and ASC.

Rail is principally engaged in leasing tank and freight railcars and locomotives in North America and Europe. Rail primarily provides railcars pursuant to full-service leases, under which it maintains the railcars, pays ad valorem taxes and insurance, and provides other ancillary services. Rail also offers net leases for railcars and most of its locomotives, in which case the lessee is responsible for maintenance, insurance and taxes.

Specialty is primarily focused on providing leasing and related remarketing and asset management services in the marine and industrial equipment markets. The Specialty portfolio consists primarily of operating and direct finance lease assets; joint venture investments; loans; and interests in residual values involving a variety of underlying asset types, including marine, rail, industrial and other equipment.

91

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

ASC operates a fleet of self-unloading marine vessels on the Great Lakes and is exclusively engaged in the waterborne transportation of dry bulk commodities.

Segment profit is an internal performance measure used by the Chief Executive Officer to assess the performance of each segment in a given period. Segment profit includes all revenues, including affiliate earnings, attributable to the segments, as well as ownership and operating costs that management believes are directly associated with the maintenance or operation of the revenue earning assets. Operating costs include maintenance costs, marine operating costs, asset impairment charges and other operating costs such as litigation, provisions for losses, environmental costs, and asset storage costs. Segment profit excludes selling, general and administrative expenses, income taxes and certain other amounts not allocated to the segments. These amounts are included in Other.

GATX allocates debt balances and related interest expense to each segment based upon a pre-determined fixed recourse leverage level expressed as a ratio of recourse debt (including off balance sheet debt) to equity. The leverage levels for Rail, Specialty and ASC are set at 4:1, 3:1 and 1.5:1, respectively. Management believes that by utilizing this leverage and interest expense allocation methodology, each operating segment’s financial performance reflects an appropriate risk-adjusted cost of capital and is presented on a comparable basis.

92

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following tables present certain segment data for the years ended December 31, 2007, 2006 and 2005 (in millions):

										GATX
	Rail		Specialty		ASC		Other			Consolidated
2007 Profitability
Revenues
Lease income	$	839.5	$	51.5	$	4.2	$	—		$	895.2
Marine operating revenue		—		—		228.7		—			228.7
Asset remarketing income		32.2		29.2		—		—			61.4
Other income		59.7		7.0		0.1		0.7			67.5
Total revenues		931.4		87.7		233.0		0.7			1,252.8
Share of affiliates’ earnings		18.8		74.4		—		—			93.2
Total gross income		950.2		162.1		233.0		0.7			1,346.0
Depreciation		165.8		13.0		12.6		—			191.4
Interest expense, net		114.0		15.8		9.9		(11.8	)		127.9
Operating lease expense		153.4		2.7		—		(0.3	)		155.8
Total ownership costs		433.2		31.5		22.5		(12.1	)		475.1
Other operating costs		249.7		13.1		189.8		1.0			453.6
Segment profit		267.3		117.5		20.7		11.8			417.3
SG&A											158.7
Income from continuing operations before taxes											258.6
Income taxes											72.8
Income from continuing operations											185.8
Selected Balance Sheet Data
Investments in affiliated companies		135.4		182.4		—		—			317.8
Identifiable assets		3,768.2		515.6		292.0		149.8			4,725.6
Capital Expenditures
Portfolio investments and capital additions		494.0		141.0		4.4		1.4			640.8

93

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

										GATX
	Rail		Specialty		ASC		Other			Consolidated
2006 Profitability
Revenues
Lease income	$	780.0	$	42.0	$	4.2	$	—		$	826.2
Marine operating revenue		—		—		205.6		—			205.6
Asset remarketing income		19.7		27.9		—		—			47.6
Other income		60.6		12.4		—		0.6			73.6
Total revenues		860.3		82.3		209.8		0.6			1,153.0
Share of affiliates’ earnings		22.7		53.4		—		—			76.1
Total gross income		883.0		135.7		209.8		0.6			1,229.1
Depreciation		146.1		7.0		10.2		—			163.3
Interest expense, net		98.6		16.9		8.1		5.6			129.2
Operating lease expense		163.0		3.9		—		(0.3	)		166.6
Total ownership costs		407.7		27.8		18.3		5.3			459.1
Other operating costs		227.4		9.0		159.5		(0.1	)		395.8
Segment profit (loss)		247.9		98.9		32.0		(4.6	)		374.2
SG&A											146.7
Income from continuing operations before taxes											227.5
Income taxes											76.1
Income from continuing operations											151.4
Selected Balance Sheet Data
Investments in affiliated companies		109.7		182.2		—		—			291.9
Identifiable assets		3,365.6		491.9		302.6		254.7			4,414.8
Capital Expenditures
Portfolio investments and capital additions		533.6		94.1		127.7		7.7			763.1

94

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

										GATX
	Rail		Specialty		ASC		Other			Consolidated
2005 Profitability
Revenues
Lease income	$	729.4	$	31.4	$	2.4	$	—		$	763.2
Marine operating revenue		—		—		135.7		—			135.7
Asset remarketing income		13.3		28.1		—		—			41.4
Other income		65.5		20.8		0.2		2.6			89.1
Total revenues		808.2		80.3		138.3		2.6			1,029.4
Share of affiliates’ earnings		13.7		60.0		—		—			73.7
Total gross income		821.9		140.3		138.3		2.6			1,103.1
Depreciation		132.1		4.2		6.5		—			142.8
Interest expense, net		77.9		16.8		5.1		6.0			105.8
Operating lease expense		176.2		4.1		—		(0.3	)		180.0
Total ownership costs		386.2		25.1		11.6		5.7			428.6
Other operating costs		234.2		9.1		108.3		9.3			360.9
Segment profit (loss)		201.5		106.1		18.4		(12.4	)		313.6
SG&A											141.0
Income from continuing operations before taxes											172.6
Income taxes											66.6
Income from continuing operations											106.0
Selected Balance Sheet Data
Investments in affiliated companies		99.7		184.2		—		—			283.9
Identifiable assets		2,719.4		455.5		165.8		199.8			3,540.5
Capital Expenditures
Portfolio investments and capital additions		402.9		92.6		3.2		4.5			503.2

95

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

NOTE 26.   Selected Quarterly Financial Data (unaudited)

	First			Second			Third			Fourth
	Quarter			Quarter			Quarter			Quarter			Total
	In millions, except per share data
2007
Gross Income	$	274.9		$	347.3		$	379.9		$	343.9		$	1,346.0
Income from continuing operations		37.0			43.5			63.9			41.4			185.8
(Loss) income from discontinued operations		(2.1	)		(1.1	)		21.7			(0.6	)		17.9
Net income	$	34.9		$	42.4		$	85.6		$	40.8		$	203.7
Per Share Data:(a)
Basic:
Income from continuing operations	$	0.71		$	0.86		$	1.31		$	0.87		$	3.73
(Loss) income from discontinued operations		(0.04	)		(0.03	)		0.45			(0.01	)		0.36
Total	$	0.67		$	0.83		$	1.76		$	0.86		$	4.09
Diluted:
Income from continuing operations	$	0.65		$	0.79		$	1.21		$	0.81		$	3.44
(Loss) income from discontinued operations		(0.03	)		(0.02	)		0.41			(0.02	)		0.32
Total	$	0.62		$	0.77		$	1.62		$	0.79		$	3.76
2006
Gross Income	$	271.0		$	303.9		$	336.2		$	318.0		$	1,229.1
Income from continuing operations		38.1			41.0			43.6			28.7			151.4
Income (loss) from discontinued operations		8.3			(0.3	)		(54.2	)		7.4			(38.8	)
Net income (loss)	$	46.4		$	40.7		$	(10.6	)	$	36.1		$	112.6
Per Share Data:(a)
Basic:
Income from continuing operations	$	0.75		$	0.81		$	0.86		$	0.55		$	2.97
Income (loss) from discontinued operations		0.17			(0.01	)		(1.07	)		0.15			(0.76	)
Total	$	0.92		$	0.80		$	(0.21	)	$	0.70		$	2.21
Diluted:
Income from continuing operations	$	0.67		$	0.72		$	0.76		$	0.51		$	2.65
Income (loss) from discontinued operations		0.14			(0.01	)		(0.88	)		0.12			(0.63	)
Total	$	0.81		$	0.71		$	(0.12	)	$	0.63		$	2.02

(a) Quarterly earnings per share results may not be additive, as per share amounts are computed independently for each quarter and the full year is based on the respective weighted average common shares and common stock equivalents outstanding.

96

Item 9.   Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

None.

Item 9A.   Controls and Procedures

Management’s Report Regarding the Effectiveness of Disclosure Controls and Procedures

The Company’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, have conducted an evaluation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”)). Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this annual report, the Company’s disclosure controls and procedures were effective.

Management’s Report Regarding the Effectiveness of Internal Control and Procedures

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act for the Company. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internal control over financial reporting includes those policies and procedures that:

(i)	pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
(ii)	provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
(iii)	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate as a result of changes in conditions, or that the degree of compliance with the applicable policies and procedures may deteriorate.

The Company’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, has conducted an evaluation of the Company’s internal control over financial reporting as of the end of the period covered by this annual report based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Such evaluation included reviewing the documentation of the Company’s internal controls, evaluating the design effectiveness of the internal controls and testing their operating effectiveness.

Based on such evaluation, the Company’s management has concluded that as of the end of the period covered by this annual report, the Company’s internal control over financial reporting was effective.

Ernst & Young LLP, the independent registered public accounting firm that audited the financial statements included in this annual report has issued a report on the Company’s internal control over financial reporting. That report appears below.

97

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of GATX Corporation

We have audited GATX Corporation’s internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). GATX Corporation’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report Regarding the Effectiveness of Internal Control and Procedures. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, GATX Corporation maintained, in all material respects, effective internal control over financial reporting as of December 31, 2007, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the 2007 consolidated financial statements of GATX Corporation and our report dated February 29, 2008 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Chicago, Illinois

February 29, 2008

98

Changes in Internal Control Over Financial Reporting

No change in the Company’s internal control over financial reporting (as defined in Exchange Act Rules 13a-15 (f) and 15d-15(f)) occurred during the fiscal quarter ended December 31, 2007 that materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B.   Other Information

None.

PART III

Item 10.   Directors, Executive Officers and Corporate Governance

Information required by this item regarding directors, the Company’s Code of Ethics, the Audit Committee Financial Expert, compliance with Section 16(a) of the Exchange Act and corporate governance is contained in sections entitled “Nominees For Board of Directors”, “Additional Information Concerning Nominees”, “Board of Directors”, “Board Independence”, “Committees of the Board”, “Process for Identifying and Evaluating Director Nominees”, “Communication with the Board”, “Compensation Committee Report”, “Audit Committee Report” and “Section 16(a) Beneficial Ownership Reporting Compliance” in the GATX Proxy Statement to be filed on or about March 14, 2008, which sections are incorporated herein by reference.

Information regarding executive officers is included in Part I of this Annual Report on Form 10-K.

Item 11.   Executive Compensation

Information required by this item regarding compensation of directors and executive officers of GATX is contained in sections entitled “Director Compensation”, “Compensation of Executive Officers” and “Compensation Committee Report” in the GATX Proxy Statement to be filed on or about March 14, 2008, which sections are incorporated herein by reference.

Item 12.   Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Information required by this item regarding security ownership of certain beneficial owners and management is contained in sections entitled “Security Ownership of Management” and “Beneficial Ownership of Common Stock” in the GATX Proxy Statement to be filed on or about March 14, 2008, which sections are incorporated herein by reference.

Equity Compensation Plan Information (as of December 31, 2007):

	Number of Securities						Number of Securities Remaining
	to be Issued			Weighted-Average			Available for Future Issuance
	Upon Exercise of			Exercise Price of			Under Equity Compensation
	Outstanding Options,			Outstanding Options,			Plans (Excluding Securities
	Warrants and Rights			Warrants and Rights			Reflected in Column (a))
Plan Category	(a)			(b)			(c)
Equity Compensation Plans Approved by Shareholders		1,867,855	(1)	$	35.09	(2)		2,234,434
Equity Compensation Plans Not Approved by Shareholders		—						—
Total		1,867,855						2,234,434

(1) Consists of 1,627,081 stock options outstanding, 125,416 performance shares estimated at target and 115,358 Directors’ phantom stock units.

99

(2) The weighted-average exercise price does not include outstanding performance shares, restricted stock or phantom stock units.

See Note 21 to the Consolidated Financial Statements for further details regarding the Company’s share-based compensation plans.

Item 13.   Certain Relationships and Related Transactions, and Director Independence.

Information required by this item regarding transactions with related persons and director independence is contained in the sections entitled “Related Person Transactions” and “Board Independence” in the GATX Proxy Statement to be filed on or about March 14, 2008, which sections are incorporated herein by reference.

Item 14.   Principal Accounting Fees and Services.

Information required by this item regarding fees paid to Ernst & Young is contained in sections entitled “Audit Fees”, “Audit Related Fees”, “Tax Fees”, “All Other Fees” and “Pre-Approval Policy” in the GATX Proxy Statement to be filed on or about March 14, 2008, which sections are incorporated herein by reference.

PART IV

Item 15.   Exhibits, Financial Statement Schedules.

(a) 1.  Financial Statements

	Page
Documents Filed as Part of this Report:
Report of Independent Registered Public Accounting Firm with respect to the consolidated financial statements		44
Consolidated Balance Sheets — December 31, 2007 and 2006		45
Consolidated Statements of Operations — Years Ended December 31, 2007, 2006, and 2005		46
Consolidated Statements of Cash Flows — Years Ended December 31, 2007, 2006, and 2005		47
Consolidated Statements of Changes in Shareholders’ Equity — December 31, 2007, 2006 and 2005		48
Consolidated Statements of Comprehensive Income (Loss)— Years Ended December 31, 2007, 2006, and 2005		49
Notes to Consolidated Financial Statements		50
Report of Independent Registered Public Accounting Firm with respect to internal controls		98

2.  Financial Statement Schedules:

Schedule I, Condensed Financial Information of Registrant, will be filed as an amendment to this report on or before March 30, 2008. All other schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are inapplicable, and, therefore, have been omitted.

3. Exhibits. See the Exhibit Index included herewith and incorporated by reference hereto.

100

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/  Brian A. Kenney

Brian A. Kenney

Chairman, President and

Chief Executive Officer

February 29, 2008

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the date indicated.

/s/  Brian A. Kenney Brian A. Kenney February 29, 2008		Chairman, President and Chief Executive Officer (Principal Executive Officer)
/s/  Robert C. Lyons Robert C. Lyons February 29, 2008		Senior Vice President and Chief Financial Officer (Principal Financial Officer)
/s/  William M. Muckian William M. Muckian February 29, 2008		Senior Vice President, Controller and Chief Accounting Officer (Principal Accounting Officer)
James M. Denny		Director
Richard Fairbanks		Director
Deborah M. Fretz		Director
Ernst A. Häberli		Director
Mark G. McGrath		Director
Michael E. Murphy		Director
David S. Sutherland		Director
Casey J. Sylla		Director
By	/s/  Deborah A. GoldenDeborah A. Golden (Attorney in Fact) February 29, 2008	Senior Vice President, General Counsel and Secretary (Attorney in Fact)

101

EXHIBIT INDEX

Exhibit
Number			Exhibit Description	Page
Filed with this Report:
	4	.12	Indenture dated February 6, 2008, between GATX Corporation and U.S. Bank National Association, as Trustee.
	10	.27	Amendment to Executive Deferred Income Plan Participation Agreements between GATX Corporation and participating directors and executive officers for Plan Years 1984, 1985 and 1987, effective as of December 7, 2007.*
	10	.28	Amendment of GATX Corporation 1995 Long-Term Incentive Compensation Plan, effective as of December 7, 2007.*
	10	.29	Amendment of GATX Corporation 2004 Equity Incentive Compensation Plan, effective as of December 7, 2007.*
	10	.30	Amendment of GATX Corporation Cash Incentive Compensation Plan, effective as of December 7, 2007.*
	10	.31	Amendment of GATX Corporation Directors’ Phantom Stock Plan, effective as of December 7, 2007.*
	10	.32	Amended and Restated GATX Corporation Directors’ Voluntary Deferred Fee Plan, effective as of December 7, 2007.*
	12		Statement regarding computation of ratios of earnings to combined fixed charges and preferred stock dividends.		107
	21		Subsidiaries of the Registrant.		108
	23		Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.		109
	24		Powers of Attorney with respect to the Annual Report on Form 10-K for the fiscal year ended December 31, 2007.
	31	.1	Certification Pursuant to Exchange Act Rule 13a-14(a) and Rule 15d-14(a) (CEO Certification).		110
	31	.2	Certification Pursuant to Exchange Act Rule 13a-14(a) and Rule 15d-14(a) (CFO Certification).		111
	32		Certification Pursuant to 18 U.S.C. Section 1350 (CEO and CFO Certification).		112
Incorporated by Reference:
	2	.1	Sale and Purchase Agreement dated as of September 28, 2006 between GATX Financial Corporation and Macquarie Aircraft Leasing Limited is incorporated herein by reference to Exhibit 10 to GATX’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2006, file number 1-2328.
	2	.2	Supplemental Agreement dated as of November 30, 2006 between GATX Financial Corporation and Macquarie Aircraft Leasing Limited, incorporated by reference to Exhibit 2.2 to GATX’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006, file number 1-2328.
	2	.3	Second Supplemental Agreement dated as of January 17, 2007 between GATX Financial Corporation and Macquarie Aircraft Leasing Limited, incorporated by reference to Exhibit 2.3 to GATX’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006, file number 1-2328.
	2	.4	Third Supplemental Agreement dated as of January 29, 2007 between GATX Financial Corporation and Macquarie Aircraft Leasing Limited, incorporated by reference to Exhibit 2.4 to GATX’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006, file number 1-2328.
	2	.5	Fourth Supplemental Agreement dated as of January 31, 2007 between GATX Financial Corporation and Macquarie Aircraft Leasing Limited, incorporated by reference to Exhibit 2.5 to GATX’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006, file number 1-2328.

102

Exhibit
Number			Exhibit Description	Page
	2	.6	Fifth Supplemental Agreement dated as of February 6, 2006 between GATX Financial Corporation and Macquarie Aircraft Leasing Limited, incorporated by reference to Exhibit 2.6 to GATX’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006, file number 1-2328.
	2	.7	Sixth Supplemental Agreement dated as of May 16, 2007 between GATX Financial Corporation and Macquarie Aircraft Leasing Limited, incorporated by reference to Exhibit 2.1 to GATX’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2007, file number 1-2328.
	2	.8	Seventh Supplemental Agreement dated as of May 29, 2007 between GATX Financial Corporation and Macquarie Aircraft Leasing Limited, incorporated by reference to Exhibit 2.2 to GATX’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2007, file number 1-2328.
	3	.1	Restated Certificate of Incorporation of GATX Corporation is incorporated herein by reference to Exhibit 4.1 to GATX’s Registration Statement on Form S-8 filed August 20, 2007 (No. 333-145581).
	3	.2	Amended and Restated By-Laws of GATX Corporation are incorporated herein by reference to Exhibit 3.2 to GATX’s Form 8-K dated May 11, 2007, file number 1-2328.
	4	.1	Indenture dated July 31, 1989 between GATX Capital Corporation and The Chase Manhattan Bank is incorporated herein by reference to Exhibit 4(a) to GATX Capital Corporation’s Form S-3, file number 33-30300.
	4	.2	Supplemental Indenture dated as of December 18, 1991 between GATX Capital Corporation and The Chase Manhattan Bank is incorporated herein by reference to Exhibit 4(b) to GATX Capital Corporation’s Form S-3, file number 33-64474.
	4	.3	Second Supplemental Indenture dated as of January 2, 1996 between GATX Capital Corporation and The Chase Manhattan Bank is incorporated herein by reference to Exhibit 4.3 to GATX Capital Corporation’s Form 8-K dated October 15, 1997, file number 1-8319.
	4	.4	Third Supplemental Indenture dated as of October 14, 1997 between GATX Capital Corporation and The Chase Manhattan Bank is incorporated herein by reference to Exhibit 4.4 to GATX Capital Corporation’s Form 8-K dated October 15, 1997, file number 1-8319.
	4	.5	Indenture dated as of October 1, 1987 between General American Transportation Corporation and The Chase Manhattan Bank (National Association) is incorporated herein by reference to General American Transportation Corporation’s Form S-3, file number 33-17692.
	4	.6	First Supplemental Indenture dated as of May 15, 1988 between General American Transportation Corporation and The Chase Manhattan Bank is incorporated herein by reference to General American Transportation Corporation’s Form 10-Q for the quarterly period ended June 30, 1988, file number 2-54754.
	4	.7	Second Supplemental Indenture dated as of March 15, 1990 between General American Transportation Corporation and The Chase Manhattan Bank is incorporated herein by reference to General American Transportation Corporation’s Form 8-K dated March 15, 1990, file number 2-54754.
	4	.8	Third Supplemental Indenture dated as of June 15, 1990 between General American Transportation Corporation and The Chase Manhattan Bank is incorporated herein by reference to General American Transportation Corporation’s Form 8-K dated June 29, 1990, file number 2-54754.
	4	.9	Fourth Supplemental Indenture dated as of June 15, 1996 between General American Transportation Corporation and the Chase Manhattan Bank is incorporated herein by reference to Exhibit 4.1 to General American Transportation’s Form 8-K dated January 26, 1996, file number 2-54754.
	4	.10	Indenture dated as of November 1, 2003 between GATX Financial Corporation and JP Morgan Chase Bank is incorporated herein by reference to Exhibit 4Q to GATX Financial Corporation’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003, file number 1-8319.

103

Exhibit
Number			Exhibit Description	Page
	4	.11	Indenture dated as of August 15, 2003 between GATX Corporation, GATX Financial Corporation and JP Morgan Chase Bank, is incorporated herein by reference to Exhibit 4.3 to Form S-3 dated November 13, 2003, file number 33-110451.
	10	.1	Amended and Restated Five Year Credit Agreement dated as of May 15, 2007 between GATX Corporation, the lenders listed therein, and Citibank, N.A., as Administrative Agent is incorporated herein by reference to GATX’s Form 8-K dated May 16, 2007, file number 1-8319.
	10	.2	GATX Corporation 1995 Long-Term Incentive Compensation Plan is incorporated herein by reference to Exhibit 10A to GATX’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 1995, file number 1-2328.*
			i. Amendment of said Plan effective as of January 31, 1997 is incorporated herein by reference to Exhibit 10B to GATX’s Annual Report on Form 10-K for the fiscal year ended December 31, 1996, file number 1-2328.*
			ii. Amendment of said Plan effective as of December 5, 1997 is incorporated herein by reference to Exhibit 10B to GATX’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999, file number 1-2328.*
			iii. Amendment of said Plan effective as of April 24, 1998, Amendment of said Plan effective June 9, 2000, and Amendment of said Plan effective January 26, 2001, is incorporated herein by reference to Exhibit 10B to GATX’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000, file number 1-2328.*
	10	.3	GATX Corporation Deferred Fee Plan for Directors, as amended and restated July 1, 1998 is incorporated herein by reference to Exhibit 10C to GATX’s Annual Report on Form 10-K for the fiscal year ended December 31, 1999, file number 1-2328.*
	10	.4	1984 Executive Deferred Income Plan Participation Agreement between GATX Corporation and participating directors and executive officers dated September 1, 1984, as amended, is incorporated herein by reference to Exhibit 10F to GATX’s Annual Report on Form 10-K for the fiscal year ended December 31, 1991, file number 1-2328.*
	10	.5	1985 Executive Deferred Income Plan Participation Agreement between GATX Corporation and participating directors and executive officers dated July 1, 1985, as amended, is incorporated herein by reference to Exhibit 10G to GATX’s Annual Report on Form 10-K for the fiscal year ended December 31, 1991, file number 1-2328.*
	10	.6	1987 Executive Deferred Income Plan Participation Agreement between GATX Corporation and participating directors and executive officers dated December 31, 1986, as amended, is incorporated herein by reference to Exhibit 10H to GATX’s Annual Report on Form 10-K for the fiscal year ended December 31, 1991, file number 1-2328.*
	10	.7	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, is incorporated herein by reference to Exhibit 10J to GATX’s Annual Report on Form 10-K for the fiscal year ended December 31, 1989, file number 1-2328.*
	10	.8	Retirement Supplement to Executive Deferred Income Plan Participation Agreements entered into as of January 23, 1990, between GATX and certain participating directors 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 is incorporated herein by reference to Exhibit 10K to GATX’s Annual Report on Form 10-K for the fiscal year ended December 31, 1990, file number 1-2328.*
	10	.9	Amendment to Executive Deferred Income Plan Participation Agreements between GATX and participating executive officers entered into as of April 23, 1993 is incorporated herein by reference to Exhibit 10J to GATX’s Annual Report on Form 10-K for the fiscal year ended December 31, 1993, file number 1-2328.*
	10	.10	Summary of the Directors’ Deferred Stock Plan approved on July 26, 1996, effective as of April 26, 1996 is incorporated herein by reference to Exhibit 10 to GATX’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 1996, file number 1-2328.*

104

Exhibit
Number			Exhibit Description	Page
	10	.11	Amended and Restated Agreements for Continued Employment Following a Change of Control between GATX Corporation and Messrs. Kenney and Earl and Ms. Duddy dated as of August 6, 2004 is incorporated herein by reference to Exhibit 10A to GATX’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2004, file number 1-2328.*
	10	.12	Agreement for Continued Employment Following a Change of Control between GATX Corporation and Mr. Lyons dated as of October 18, 2005 is incorporated herein by reference to Exhibit 10A to GATX’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2005, file number 1-2328.*
	10	.13	Restricted Stock Agreements for the 2004 Equity Incentive Compensation Plan between GATX Corporation and certain executive officers entered into as of January 1, 2004 which provide for vesting based upon achievement of performance goals that qualify the award as performance based compensation under 162(m) of the Internal Revenue Code is incorporated herein by reference to Exhibit 10C to GATX’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2004, file number 1-2328.*
	10	.14	Restricted Stock Agreements for the 2004 Equity Incentive Compensation Plan between GATX Corporation and certain executive officers entered into as of January 1, 2004 which provide for vesting based upon achievement of performance goals is incorporated herein by reference to Exhibit 10D to GATX’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2004, file number 1-2328.*
	10	.15	Restricted Stock Agreements for the 2004 Equity Incentive Compensation Plan between GATX Corporation and certain executive officers which provide for time based vesting is incorporated herein by reference to Exhibit 10E to GATX’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2004, file number 1-2328.*
	10	.16	Non Qualified Stock Option Agreement for awards made under the 2004 Equity Incentive Compensation Plan is incorporated herein by reference to Exhibit 10F to GATX’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2004, file number 1-2328.*
	10	.17	GATX Corporation 2004 Equity Incentive Compensation Plan is incorporated herein by reference to Exhibit C to the Definitive Proxy Statement filed on March 18, 2004 in connection with GATX’s 2004 Annual Meeting of Shareholders, file number 1-2328.*
	10	.18	GATX Corporation Cash Incentive Compensation Plan is incorporated herein by reference to Exhibit D to the Definitive Proxy Statement filed on March 18, 2004 in connection with GATX’s 2004 Annual Meeting of Shareholders, file number 1-2328.*
	10	.19	Performance Stock Agreements for the 2004 Equity Incentive Compensation Plan between GATX Corporation and certain executive officers entered into as of January 1, 2005 which provide for vesting based upon achievement of performance goals is incorporated by reference to Exhibit 10A to GATX’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2005.*
	10	.20	GATX Corporation 2004 Equity Incentive Compensation Plan Stock-Settled Stock Appreciation Right (SSAR) Agreement between GATX Corporation and certain executive officers entered into as of March 10, 2006 is incorporated herein by reference to Exhibit 10.1 to GATX’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2006, file number 1-2328.*
	10	.21	GATX Corporation 2004 Equity Incentive Compensation Plan Performance Share Agreement between GATX Corporation and certain executive officers entered into as of March 10, 2006 is incorporated herein by reference to Exhibit 10.2 to GATX’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2006, file number 1-2328.*
	10	.22	Summary of GATX Corporation Non-Employee Directors’ Compensation is incorporated by reference to GATX’s Form 8-K dated July 21, 2006, file number 1-2328.*
	10	.23	Agreement for Continued Employment following a Change of Control Between GATX Corporation and Ms. Golden dated as of January 9, 2006, incorporated by reference to Exhibit 10.23 to GATX’s Annual Report on Form 10-K for the year ended December 31, 2006.*

105

Exhibit
Number			Exhibit Description	Page
	10	.24	GATX Corporation 2004 Equity Incentive Compensation Plan Stock-Settled Appreciation Right (SAR) Agreement between GATX Corporation and certain eligible grantees entered into as of March 8, 2007, incorporated by reference to Exhibit 10.1 to GATX’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2007.*
	10	.25	GATX Corporation 2004 Equity Incentive Compensation Plan Performance Share Agreement between GATX Corporation and certain executive officers entered into as of March 8, 2007, incorporated by reference to Exhibit 10.2 to GATX’s Quarterly Report on 10-Q for the quarterly period ended March 31, 2007, file number 1-2328.*
	10	.26	GATX Corporation 2004 Equity Incentive Compensation Plan Restricted Common Stock Agreement between GATX Corporation and certain eligible grantees entered into as of March 8, 2007, incorporated by reference to Exhibit 10.3 to GATX’s Quarterly Report on 10-Q for the quarterly period ended March 31, 2007, file number 1-2328.*
	99	.1	Undertakings to the GATX Corporation Salaried Employees’ Retirement Savings Plan is incorporated herein by reference to GATX’s Annual Report on Form 10-K for the fiscal year ended December 31, 1982, file number 1-2328.*
	99	.2	Certain instruments evidencing long-term indebtedness of GATX Corporation are not being filed as exhibits to this Report because the total amount of securities authorized under any such instrument does not exceed 10% of GATX Corporation’s total assets. GATX Corporation will furnish copies of any such instruments upon request of the Securities and Exchange Commission.

*  Compensatory Plans or Arrangements

106

EX-4.12

                                                                    Exhibit 4.12

================================================================================
                                GATX CORPORATION

                                       AND

                     U.S. BANK NATIONAL ASSOCIATION, TRUSTEE

                                 ---------------

                                    INDENTURE

                                 ---------------

                          DATED AS OF FEBRUARY 6, 2008

                                 DEBT SECURITIES

================================================================================



                                    CONTENTS

                                                                           
                                    ARTICLE 1
             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 1.1    Definitions.................................................    1
Section 1.2    Compliance Certificates and Opinions........................    8
Section 1.3    Form of Documents Delivered to Trustee......................    8
Section 1.4    Acts of Holders.............................................    9
Section 1.5    Notices, Etc., to Trustee and Company.......................   10
Section 1.6    Notice to Holders of Securities; Waiver.....................   10
Section 1.7    Language of Notices, Etc....................................   11
Section 1.8    Conflict with Trust Indenture Act...........................   11
Section 1.9    Effect of Headings and Table of Contents....................   11
Section 1.10   Successors and Assigns......................................   11
Section 1.11   Separability Clause.........................................   11
Section 1.12   Benefits of Indenture.......................................   11
Section 1.13   Governing Law...............................................   11
Section 1.14   Legal Holidays..............................................   11

                                    ARTICLE 2
                                 SECURITY FORMS

Section 2.1    Forms Generally.............................................   12
Section 2.2    Form of Trustee's Certificate of Authentication.............   12
Section 2.3    Securities in Global Form...................................   13

                                    ARTICLE 3
                                 THE SECURITIES

Section 3.1    Amount Unlimited; Issuable in Series........................   13
Section 3.2    Denominations...............................................   15
Section 3.3    Execution, Authentication, Delivery and Dating..............   15
Section 3.4    Temporary Securities........................................   17
Section 3.5    Registration, Transfer and Exchange.........................   17
Section 3.6    Mutilated, Destroyed, Lost and Stolen Securities............   20
Section 3.7    Payment of Interest; Interest Rights Preserved..............   21
Section 3.8    Persons Deemed Owners.......................................   22
Section 3.9    Cancellation................................................   22
Section 3.10   Computation of Interest.....................................   23

                                    ARTICLE 4
                           SATISFACTION AND DISCHARGE

Section 4.1    Satisfaction and Discharge of Indenture.....................   23
Section 4.2    Application of Trust Money..................................   24




                                       -i-



                                    CONTENTS

                                                                           
                                    ARTICLE 5
                                    REMEDIES

Section 5.1    Events of Default...........................................   24
Section 5.2    Acceleration of Maturity; Rescission and Annulment..........   25
Section 5.3    Collection of Indebtedness and Suits for Enforcement by
                  Trustee..................................................   27
Section 5.4    Trustee May File Proofs of Claim............................   27
Section 5.5    Trustee May Enforce Claims Without Possession of Securities.   28
Section 5.6    Application of Money Collected..............................   28
Section 5.7    Limitation on Suits.........................................   29
Section 5.8    Unconditional Right of Holders to Receive Principal,
                  Premium and Interest.....................................   29
Section 5.9    Restoration of Rights and Remedies..........................   30
Section 5.10   Rights and Remedies Cumulative..............................   30
Section 5.11   Delay or Omission Not Waiver................................   30
Section 5.12   Control by Holders of Securities............................   30
Section 5.13   Waiver of Past Defaults.....................................   31
Section 5.14   Undertaking for Costs.......................................   31

                                    ARTICLE 6
                                   THE TRUSTEE

Section 6.1    Certain Duties and Responsibilities.........................   32
Section 6.2    Notice of Defaults..........................................   33
Section 6.3    Certain Rights of Trustee...................................   33
Section 6.4    Not Responsible for Recitals or Issuance of Securities......   34
Section 6.5    May Hold Securities.........................................   35
Section 6.6    Money Held in Trust.........................................   35
Section 6.7    Compensation and Reimbursement..............................   35
Section 6.8    Disqualifications; Conflicting Interests....................   36
Section 6.9    Corporate Trustee Required; Eligibility.....................   36
Section 6.10   Resignation and Removal; Appointment of Successor...........   36
Section 6.11   Acceptance of Appointment by Successor......................   37
Section 6.12   Merger, Conversion, Consolidation or Succession to
                  Business.................................................   39
Section 6.13   Preferential Collection of Claims Against Company...........   39
Section 6.14   Appointment of Authenticating Agent.........................   42

                                    ARTICLE 7
                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

Section 7.1    Company To Furnish Trustee Names and Addresses of Holders...   44
Section 7.2    Preservation of Information; Communications to Holders......   44
Section 7.3    Reports by Trustee..........................................   46
Section 7.4    Reports by the Company......................................   47




                                      -ii-



                                    CONTENTS

                                                                           
                                    ARTICLE 8
                CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE

Section 8.1    Consolidations and Mergers of Company and Sales, Leases and
                  Conveyances Permitted Subject to Certain Conditions......   48
Section 8.2    Rights and Duties of Successor Corporation..................   48
Section 8.3    Officers' Certificate and Opinion of Counsel................   49

                                    ARTICLE 9
                             SUPPLEMENTAL INDENTURE

Section 9.1    Supplemental Indentures without Consent of Holders..........   49
Section 9.2    Supplemental Indentures with Consent of Holders.............   50
Section 9.3    Execution of Supplemental Indentures........................   51
Section 9.4    Effect of Supplemental Indentures...........................   51
Section 9.5    Conformity with Trust Indenture Act.........................   51
Section 9.6    Reference in Securities to Supplemental Indentures..........   51

                                   ARTICLE 10
                                    COVENANTS

Section 10.1   Payment of Principal, Premium, if any, and Interest.........   52
Section 10.2   Maintenance of Office or Agency.............................   52
Section 10.3   Money for Securities Payments To Be Held in Trust...........   52
Section 10.4   Additional Amounts..........................................   54
Section 10.5   Statement as to Compliance; Notice of Certain Defaults......   54
Section 10.6   Limitation on Liens.........................................   55
Section 10.7   Waiver of Certain Covenants.................................   57

                                   ARTICLE 11
                            REDEMPTION OF SECURITIES

Section 11.1   Applicability of Article....................................   58
Section 11.2   Election to Redeem; Notice to Trustee.......................   58
Section 11.3   Selection by Trustee of Securities To Be Redeemed...........   58
Section 11.4   Notice of Redemption........................................   59
Section 11.5   Deposit of Redemption Price.................................   59
Section 11.6   Securities Payable on Redemption Date.......................   60
Section 11.7   Securities Redeemed in Part.................................   60

                                   ARTICLE 12
                                  SINKING FUNDS

Section 12.1   Applicability of Article....................................   60
Section 12.2   Satisfaction of Sinking Fund Payments with Securities.......   61




                                      -iii-



                                    CONTENTS

                                                                           
Section 12.3   Redemption of Securities for Sinking Fund...................   61




                                      -iv-



                         Reconciliation and tie between
                           Trust Indenture Act of 1939
                                  and Indenture



Trust Indenture Act Section                                    Indenture Section
- ---------------------------                                   ------------------
                                                           
Section 310 (a)(1).........................................                  6.9
(a)(2).....................................................                  6.9
(a)(3).....................................................       Not Applicable
(a)(4).....................................................       Not Applicable
(a)(5).....................................................                  6.9
(b)........................................................            6.8, 6.10
Section 311 (a)............................................         6.13(a), (c)
(b)........................................................         6.13(b), (c)
(b)(2).....................................................   7.3(a)(ii), 7.3(b)
Section 312 (a)............................................          7.1, 7.2(a)
(b)........................................................               7.2(b)
(c)........................................................               7.2(c)
Section 313 (a)............................................               7.3(a)
(b)(1).....................................................       Not Applicable
(b)(2).....................................................               7.3(b)
(c)........................................................               7.3(c)
(d)........................................................               7.3(d)
Section 314 (a)............................................            7.4, 10.5
(b)........................................................       Not Applicable
(c)(1).....................................................                  1.2
(c)(2).....................................................                  1.2
(c)(3).....................................................                  1.3
(d)........................................................       Not Applicable
(e)........................................................                  1.2
(f)........................................................       Not Applicable
Section 315 (a)............................................               6.1(a)
(b)........................................................       6.2, 7.3(a)(6)
(c)........................................................               6.1(b)
(d)........................................................               6.1(c)
(d)(1).....................................................    6.1(a)(i), (c)(i)
(d)(2).....................................................           6.1(c)(ii)
(d)(3).....................................................          6.1(c)(iii)
(e)........................................................                 5.14
Section 316 (a)............................................                  1.1
(a)(1)(A)..................................................                 5.12
(a)(1)(B)..................................................                 5.13
(a)(2).....................................................       Not Applicable
(b)........................................................                  5.8
Section 317 (a)(1).........................................                  5.3
(a)(2).....................................................                  5.4
(b)........................................................                 10.3
Section 318 (a)............................................                  1.8





                                    CONTENTS

- ----------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
      part of the Indenture.


                                       -2-



          INDENTURE, dated as of February 6, 2008, between GATX Corporation, a
New York corporation (hereinafter called the "Company"), having its principal
office at 500 West Monroe Street, Chicago, Illinois 60661, and U.S. Bank
National Association, a national banking association duly organized and existing
under the laws of the United States of America, as Trustee (hereinafter called
the "Trustee").

                             RECITALS OF THE COMPANY

          The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured and
unsubordinated debentures, notes or other evidences of indebtedness, unlimited
as to principal amount, to bear such rates of interest, to mature at such time
or times, to be issued in one or more series and to have such other provisions
as shall be fixed as hereinafter provided.

          The Company has duly authorized the execution and delivery of this
Indenture and all things necessary to make this Indenture a valid agreement of
the Company, in accordance with its terms, have been done.

          NOW, THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of
the premises and the purchase of the Securities by the Holders thereof, it is
mutually covenanted and agreed, for the equal and proportionate benefit of all
Holders of the Securities or of series thereof, as follows:

                                    ARTICLE 1

             DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

          Section 1.1 Definitions.

          For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:

          (a) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;

          (b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;

          (c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as are
generally accepted at the date of such computation; and

          (d) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.



          Certain terms, used principally in Article Six, are defined in that
Article.

          "Act" when used with respect to any Holders has the meaning specified
in Section 1.4.

          "Additional Amounts" means any additional amounts which are required
by a Security or by or pursuant to a Board Resolution, under circumstances
specified therein, to be paid by the Company in respect of certain taxes imposed
on certain Holders and which are owing to such Holders.

          "Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have the meanings correlative to
the foregoing.

          "Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
Securities of one or more series.

          "Authorized Newspaper" means a newspaper, in an official language of
the country of publication or in the English language, customarily published on
each Business Day, whether or not published on Saturdays, Sundays or holidays,
and of general circulation in the place in connection with which the term is
used or in the financial community of such place. Where successive publications
are required to be made in Authorized Newspapers, the successive publications
may be made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any Business Day.

          "Board of Directors" means the Board of Directors of the Company or
any duly authorized committee thereof.

          "Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.

          "Business Day," except as may otherwise be provided in the form of
Securities of any particular series pursuant to the provisions of this
Indenture, with respect to any Place of Payment means each Monday, Tuesday,
Wednesday, Thursday and Friday which is neither a legal holiday nor a day on
which banking institutions or trust companies in that Place of Payment are
authorized or obligated by law to close.

          "Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, or
if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.


                                        2



          "Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.

          "Company Request" and "Company Order" mean, respectively, a written
request or order signed in the name of the Company by the Chairman, the
President, any Executive or Senior Vice President or the Treasurer, and by the
Secretary, an Assistant Treasurer or an Assistant Secretary of the Company, and
delivered to the Trustee.

          "Corporate Trust Office" means the principal office or agency of the
Trustee, at which at any particular time this Indenture shall be administered,
which office at the date of original execution of this Indenture is located at
225 Asylum Street, 23rd Floor, Hartford, CT 06103, Attention: Corporate Trust
Services (GATX Corporation 2008 Indenture), except that, with respect to
presentation of Securities for payment or registration of transfers and
exchanges and the location of the registrar, such term also includes the office
or agency of the Trustee located in the Borough of Manhattan, The City of New
York, which at the date of original execution of this Indenture is located at
U.S. Bank Trust National Association, 100 Wall Street, Suite 1600, New York, NY
10005, Attention: Corporate Trust Services.

          "corporation" means corporations, associations, partnerships, limited
liability companies and business trusts.

          "Defaulted Interest" has the meaning specified in Section 3.7.

          "Depositary" means with respect to the Securities of any series
issuable or issued in whole or in part in global form, the Person designated as
Depositary by the Company pursuant to Section 3.1(c) until a successor
Depositary shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter "Depositary" shall mean or include each Person who is
then a Depositary hereunder, and if at any time there is more than one such
Person, "Depositary" as used with respect to the Securities of any such series
shall mean the "Depositary" with respect to the Securities of that series.

          "Dollars" or "$" or any similar reference shall mean currency of the
United States which at the time shall be legal tender for the payment of public
and private debts.

          "Event of Default" has the meaning specified in Section 5.1

          "Holder" or "Holders" when used with respect to any Security means the
Person or Persons in whose name the Security is, or Securities are, registered
in the Security Register.

          "Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.

          "Information Technology Assets" means any and all information
technology equipment owned by the Company, including (but not limited to)
personal computers, servers, mainframes, midrange and communication equipment.


                                        3



          "Interest" when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity means interest
payable after Maturity, and, when used with respect to a Security which provides
for the payment of Additional Amounts pursuant to Section 10.4, includes such
Additional Amounts.

          "Interest Payment Date" means the Stated Maturity of an installment of
interest on the applicable Securities.

          "Maturity" when used with respect to any Security means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption or otherwise.

          "Net Tangible Assets" at any date means the total assets of the
Company as they appear on the most recently prepared consolidated balance sheet
as of the end of a fiscal quarter, less (i) all liabilities shown on such
consolidated balance sheet that are classified and accounted for as current
liabilities or that otherwise would be considered current liabilities under
generally accepted accounting principles and (ii) all assets shown on such
consolidated balance sheet that are classified and accounted for as intangible
assets of the Company or that otherwise would be considered intangible assets
under generally accepted accounting principles, including, without limitation,
franchises, patents and patent applications, trademarks, brand names and
goodwill.

          "Officers' Certificate" means a certificate signed by the Chairman of
the Board, the President, any Executive or Senior Vice President or the
Treasurer, and by the Secretary or an Assistant Secretary of the Company, and
delivered to the Trustee. Each such certificate shall include the statements
provided for in Section 1.2.

          "Opinion of Counsel" means a written opinion of counsel, who may
(except as otherwise expressly provided in this Indenture) be an employee of or
counsel for the Company, or other counsel who shall be reasonably acceptable to
the Trustee. Each such opinion shall include the statements provided for in
Section 1.2.

          "Original Issue Discount Security" means a Security issued pursuant to
this Indenture which provides for declaration of an amount less than the
principal thereof to be due and payable upon acceleration pursuant to Section
5.2.

          "Outstanding" when used with respect to Securities means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:

               (i) Securities theretofore cancelled by the Trustee or delivered
     to the Trustee for cancellation;

               (ii) Securities for whose payment or redemption money in the
     necessary amount has been theretofore deposited with the Trustee or any
     Paying Agent (other than the Company) in trust or set aside and segregated
     in trust by the Company (if the Company shall act as its own Paying Agent)
     for the Holders of such Securities provided that, if such Securities are to
     be redeemed, notice of such redemption has been


                                        4



     duly given pursuant to this Indenture or provision therefor satisfactory to
     the Trustee has been made; and

               (iii) Securities which have been paid pursuant to Section 3.6 or
     in exchange for or in lieu of which other Securities have been
     authenticated and delivered pursuant to this Indenture, other than any such
     Securities in respect of which there shall have been presented to the
     Trustee proof satisfactory to it that such Securities are held by a bona
     fide purchaser in whose hands such Securities are valid obligations of the
     Company;

provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, the principal
amount of an Original Issue Discount Security that may be counted in making such
determination and that shall be deemed to be outstanding for such purposes shall
be equal to the amount of the principal thereof that could be declared to be due
and payable pursuant to the terms of such Original Issue Discount Security at
the time the taking of such action by the Holders of such requisite principal
amount is evidenced to the Trustee as provided in Section 1.4(a), and, provided
further, that Securities owned beneficially by the Company or any other obligor
upon the Securities or any Affiliate (other than officers or directors of the
Company) of the Company or such other obligor, shall be disregarded and deemed
not to be outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities which the Trustee knows to be so
owned shall be so disregarded. Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other obligor. In the case of
a dispute as to such right, the advice of counsel shall be full protection in
respect of any decision made by the Trustee in accordance with such advice. Upon
request of the Trustee, the Company shall furnish to the Trustee promptly an
Officers' Certificate listing and identifying all securities known by the
Company to be owned or held by or for the account of any of the above-described
persons; and, subject to the terms of this Indenture, the Trustee shall be
entitled to accept such Officer's Certificate as conclusive evidence of the
facts therein set forth and of the fact that all Securities not listed therein
are outstanding for the purpose of any such determination.

          "Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company.

          "Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.

          "Place of Payment" when used with respect to the Securities of any
series means the place or places where, subject to the provisions of Section
10.2, the principal of (and premium, if any) and interest on the Securities of
that series are payable as specified as provided pursuant to Section 3.1.


                                        5



          "Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.6 in exchange for or in lieu of a
lost, destroyed, mutilated or stolen Security shall be deemed to evidence the
same debt as the lost, destroyed, mutilated or stolen Security.

          "Redemption Date" when used with respect to any Security to be
redeemed means the date fixed for such redemption by or pursuant to this
Indenture.

          "Redemption Price" when used with respect to any Security to be
redeemed means the price at which it is to be redeemed as determined pursuant to
the provisions of this Indenture.

          "Registered Security" means any Security established pursuant to
Section 2.1 which is registered in the Security Register.

          "Regular Record Date" for the interest payable on a Security on any
Interest Payment Date means the date, if any, specified in such Security as the
"Regular Record Date."

          "Responsible Officer" when used with respect to the Trustee means any
officer in the Corporate Trust Office of the Trustee and also means, with
respect to a particular corporate trust matter, any other officer of the Trustee
to whom such matter is referred because of his knowledge of and familiarity with
the particular subject.

          "Restricted Subsidiary" means any subsidiary which is a consolidated
subsidiary, in accordance with generally accepted accounting principles, in the
consolidated financial statements of the Company.

          "Security" or "Securities" means any Security or Securities, as the
case may be, authenticated and delivered under this Indenture.

          "Security Register" and "Security Registrar" have the respective
meanings specified in Section 3.5.

          "Special Record Date" for the payment of any Defaulted Interest on the
Securities of any series means a dated fixed by the Trustee pursuant to Section
3.7.

          "Stated Maturity" when used with respect to any Security or any
installment of principal thereof or interest thereon means the date specified in
such Security as the fixed date on which the principal of such Security or such
installment of principal or interest is due and payable.

          "Subsidiary" means any corporation of which at the time of
determination the Company and/or one or more Subsidiaries owns or controls
directly or indirectly more than 50% of the shares of Voting Stock.

          "Transportation Assets" means (i) any and all rail equipment owned by
the Company, including (but not limited to) railcars, locomotives, shipping
containers, chassis and


                                        6



trailers, (ii) any and all marine equipment owned by the Company, including (but
not limited to) ships, vessels, boats, ferries, inland and offshore barges,
offshore rigs and floating storage facilities, (iii) any and all
transportation-related containers owned by the Company, and (iv) all
accessories, equipment, parts and appurtenances appertaining to, attached to or
used in connection with any of such rail equipment, marine equipment or
transportation-related containers.

          "Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
with respect to one or more series of Securities pursuant to the applicable
provisions of this Indenture, and thereafter "Trustee" shall mean each Person
who is then a Trustee hereunder, and if at any time there is more than one such
Person, "Trustee" shall mean each such Person and as used with respect to the
Securities of any series shall mean the Trustee with respect to the Securities
of that series.

          "Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.

          "United States" or "U.S." means the United States of America
(including the states and the District of Columbia), its territories and
possessions and other areas subject to its jurisdiction.

          "United States Alien" means any Person who, for United States Federal
income tax purposes, is a foreign corporation, a non-resident alien individual,
a non-resident alien fiduciary of a foreign estate or trust, or a foreign
partnership one or more of the members of which is, for United States Federal
income tax purposes, a foreign corporation, a non-resident alien individual or a
non-resident alien fiduciary of a foreign estate or trust.

          "U.S. Government Obligations" means securities that are (i) direct
obligations of the United States for the payment of which its full faith and
credit is pledged or (ii) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States the timely
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States, that, in either case under clauses (i) or (ii),
are not callable or redeemable at the option of the issuer thereof, and shall
also include a depository receipt issued by a bank or trust company as custodian
with respect to any such U.S. Government Obligation or a specific payment of
interest on or principal of any such U.S. Government Obligation held by such
custodian for the account of the holder of a depository receipt; provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of interest on or principal of the U.S.
Government Obligation evidenced by such depository receipt.

          "Voting Stock" means stock of the class or classes having general
voting power under ordinary circumstances to elect at least a majority of the
board of directors, managers or trustees of a corporation; provided that, for
the purposes hereof, stock which carries only the


                                        7



right to vote conditionally on the happening of an event shall not be considered
voting stock whether or not such event shall have happened.

          Section 1.2 Compliance Certificates and Opinions.

          Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee (i) an Officers' Certificate stating that all conditions precedent,
if any, provided for in this Indenture relating to the proposed action have been
complied with, (ii) an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished, and (iii) in the case of conditions precedent
compliance with which is subject to verification by accountants, a certificate
or opinion of an accountant that satisfies Section 314(c)(3) of the Trust
Indenture Act.

          Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:

          (a) a statement that each individual signing such certificate or
opinion has read such condition or covenant and the definitions herein relating
thereto;

          (b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;

          (c) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such condition or covenant has been
complied with; and

          (d) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.

          Section 1.3 Form of Documents Delivered to Trustee.

          In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents. Any
certificate or opinion of an officer of the Company may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the matters upon which his certificate or opinion is based are erroneous. Any
such certificate or Opinion of Counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Company, unless such counsel


                                        8



knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.

          Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

          Any certificate, statement or opinion of an officer of the Company or
of counsel may be based insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by a firm of accountants or an
accountant in the employ of the Company, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.

          Any certificate or opinion of any independent firm of public
accountants filed with the Trustee shall contain a statement that such firm is a
registered independent public accounting firm.

          Section 1.4 Acts of Holders.

          (a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing. Except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments are delivered to the
Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent, or of the holding by any Person of a
Security, shall be sufficient for any purpose of this Indenture and (subject to
Section 6.1) conclusive in favor of the Trustee and the Company and any agent of
the Trustee or the Company, if made in the manner provided in this Section.

          (b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any reasonable manner which the Trustee
deems sufficient and in accordance with such reasonable rules as the Trustee may
determine; and the Trustee may in any instance require further proof with
respect to any of the matters referred to in this Section.

          (c) The ownership of Securities and the principal amount and serial
numbers of Securities held by any Person, and the date of holding the same,
shall be proved by the Security Register.

          (d) If the Company shall solicit from the Holders of any Securities
any request, demand, authorization, direction, notice, consent, waiver or other
Act, the Company may, at its option, by Board Resolution, fix in advance a
record date for the determination of Holders of Securities entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the Company shall have no obligation to do so. If such a record


                                        9



date is fixed, such request, demand, authorization, direction, notice, consent,
waiver or other Act may be given before or after such record date, but only the
Holders of Securities of record at the close of business on such record date
shall be deemed to be Holders for the purposes of determining whether Holders of
the requisite proportion of Outstanding Securities have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the Outstanding Securities shall be
computed as of such record date; provided that no such authorization, agreement
or consent by the Holders on such record date shall be deemed effective unless
it shall become effective pursuant to the provisions of this Indenture not later
than six months after the record date.

          (e) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done or suffered to be done by the Trustee, any Security
Registrar, any Paying Agent or the Company in reliance thereon, whether or not
notation of such action is made upon such Security.

          Section 1.5 Notices, Etc., to Trustee and Company.

          Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,

          (a) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing to or
with the Trustee at its Corporate Trust Office, Attention: Corporate Trust
Administration Division, or

          (b) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to the Company addressed to the
attention of its Treasurer at the address of its principal office specified in
the first paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by the Company.

          Section 1.6 Notice to Holders of Securities; Waiver.

          Except as otherwise expressly provided herein or in the form of
Securities of any particular series pursuant to the provisions of this
Indenture, where this Indenture provides for notice to Holders of Securities of
any event, such notice shall be sufficiently given to Holders of Securities if
in writing and mailed, first-class postage prepaid, to each Holder of a Security
affected by such event, at his address as it appears in the Security Register,
not later than the latest date, and not earlier than the earliest date,
prescribed for the giving of such notice.

          In any case where notice to Holders of Securities is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Holder of a Security shall affect the sufficiency of such
notice with respect to other Holders of Securities. In the case by reason of the
suspension of regular mail service or by reason of any other cause it shall be
impracticable to give such notice by mail, then such notification as shall be
made with the approval of the Trustee shall constitute a sufficient notification
for every purpose hereunder.


                                       10



          Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders of Securities shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.

          Section 1.7 Language of Notices, Etc.

          Any request, demand, authorization, direction, notice, consent,
election or waiver required or permitted under this Indenture shall be in the
English language, except that, if the Company so elects, any published notice
may be in an official language of the country of publication.

          Section 1.8 Conflict with Trust Indenture Act.

          If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Indenture by any of
the provisions of the Trust Indenture Act, such latter provisions shall control.

          Section 1.9 Effect of Headings and Table of Contents.

          The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.

          Section 1.10 Successors and Assigns.

          All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.

          Section 1.11 Separability Clause.

          In case any provision in this Indenture shall be invalid, illegal or
unenforceable, the validity, legality or enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

          Section 1.12 Benefits of Indenture.

          Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto, any Security Registrar,
any Paying Agent, any Authenticating Agent and their successors hereunder and
the Holders of Securities, any benefit or any legal or equitable right, remedy
or claim under this Indenture.

          Section 1.13 Governing Law.

          This Indenture and the Securities shall be governed by and construed
in accordance with the laws of the State of New York.


                                       11



          Section 1.14 Legal Holidays.

          In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or the Securities
other than a provision in the Securities which specifically states that such
provision shall apply in lieu of this Section) payment of interest or any
Additional Amounts or principal (and premium, if any) need not be made at such
Place of Payment on such date, but may be made on the next succeeding Business
Day at such Place of Payment with the same force and effect as if made on the
Interest Payment Date or Redemption Date, or at the Stated Maturity, and no
interest shall accrue on the amount so payable for the period from and after
such Interest Payment Date, Redemption Date or Stated Maturity, as the case may
be.

                                    ARTICLE 2

                                 SECURITY FORMS

          Section 2.1 Forms Generally.

          The Securities, if any, of each series and Securities in global form,
if any, shall be in the form established by or pursuant to a Board Resolution or
in one or more indentures supplemental hereto, shall have appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture or any indenture supplemental hereto and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by the
officers of the Company executing such Securities, as evidenced by their
execution of such Securities. If the forms of the Securities of any series are
established by action taken pursuant to a Board Resolution, a copy of an
appropriate record of such action shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Company Order contemplated by Section 3.3 for the
authentication and delivery of such Securities.

          Unless otherwise provided as contemplated by Section 3.1 with respect
to any series of Securities, the Securities of each series shall be issuable in
registered form without coupons.

          The definitive Securities shall be printed, lithographed or engraved
or produced by any combination of these methods on a steel engraved border or
steel engraved borders or may be produced in any other manner, all as determined
by the officers of the Company executing such Securities, as evidenced by their
execution of such Securities.

          Section 2.2 Form of Trustee's Certificate of Authentication.

          The Trustee's Certificate of Authentication shall be in substantially
the following form:


                                       12



          This is one of the Securities of the series designated therein
referred to in the within mentioned Indenture.

                                        U.S. BANK NATIONAL ASSOCIATION,
                                        as Trustee


                                        By
                                           -------------------------------------
                                           Authorized Signatory

          Section 2.3 Securities in Global Form.

          If Securities of a series are issuable in whole or in part in global
form, any such Security may provide that it shall represent the aggregate amount
of Outstanding Securities from time to time endorsed thereon and may also
provide that the aggregate amount of Outstanding Securities represented thereby
may from time to time be reduced to reflect exchanges or increased to reflect
the issuance of additional Securities. Any endorsement of a Security in global
form to reflect the amount, or any increase or decrease in the amount, of
Outstanding Securities represented thereby shall be made in such manner and by
such Person or Persons, as shall be specified therein or in the Company Order
delivered to the Trustee pursuant to Section 3.3.

                                    ARTICLE 3

                                 THE SECURITIES

          Section 3.1 Amount Unlimited; Issuable in Series.

          The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.

          The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto prior
to the issuance of Securities of any series:

          (a) the title of the Securities and the series in which such
Securities shall be included;

          (b) the limit, if any, upon the aggregate principal amount of the
Securities of such title and the Securities of such series which may be
authenticated and delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Securities of the series pursuant to Section 3.4, 3.5,
3.6, 9.6 or 11.7);

          (c) whether Securities of the series may be issued in whole or in part
in global form and, if so, the identity of the Depositary for such Securities in
global form, and the terms and conditions, if any, upon which interests in such
Securities in global form may be exchanged, in whole or in part, for the
individual Securities represented thereby;


                                       13



          (d) the date or dates on which the principal of such Securities is
payable;

          (e) the rate or rates at which such Securities shall bear interest, if
any, or method by which such rate or rates are determined, the date or dates
from which such interest shall accrue, the Interest Payment Dates on which such
interest shall be payable and the Regular Record Date for the interest payable
on Registered Securities on any Interest Payment Date, whether and under what
circumstances Additional Amounts on such securities shall be payable in respect
of specified taxes, assessments or other governmental charges withheld or
deducted and, if so, whether the Company has the option to redeem the affected
Securities rather than pay such Additional Amounts, and the basis upon which
interest shall be calculated if other than that of a 360-day year of twelve
30-day months;

          (f) the place or places, if any, in addition to or other than the
Borough of Manhattan, The City of New York, where the principal of (and premium,
if any) and interest on or Additional Amounts, if any, payable in respect of
such Securities shall be payable, where such Securities may be surrendered for
registration of transfer, where such Securities may be surrendered for exchange
and where notice and demands to or upon the Company, in respect of such
Securities and this Indenture, may be served and where notices to Holders
pursuant to Section 1.6 will be published;

          (g) the period or periods within which, the price or prices at which
and the terms and conditions upon which such Securities may be redeemed, in
whole or in part, at the option of the Company or a Holder;

          (h) the obligation, if any, of the Company to redeem such Securities
pursuant to any sinking fund and the period or periods within which, the price
or prices at which and the terms and conditions upon which such Securities shall
be redeemed in whole or in part, pursuant to such obligation;

          (i) the denominations in which Securities of the series, if any, shall
be issuable if other than denominations of $1,000 and any integral multiple
thereof;

          (j) if other than the principal amount thereof, the portion of the
principal amount of such Securities which shall be payable upon declaration of
acceleration of the Maturity thereof pursuant to Section 5.2;

          (k) if the amount of payments of principal of (and premium, if any) or
interest, if any, on, and Additional Amounts in respect of such Securities may
be determined with reference to an index, formula or other method other than
that in which the Securities are stated to be payable, the manner in which such
amounts shall be determined;

          (l) if the Securities of such series are to be issuable in definitive
form (whether upon original issue or upon exchange of a temporary Security of
such series) only upon receipt of certain certificates or other documents or
satisfaction of other conditions, then the form and terms of such certificates,
documents or conditions;

          (m) whether, and under what conditions, Additional Amounts will be
payable to Holders of Securities of such series pursuant to Section 10.4;


                                       14



          (n) any Events of Default with respect to Securities of such series,
if not otherwise set forth herein; and

          (o) any other terms of such Securities (which terms shall not be
inconsistent with the provisions of this Indenture).

          All Securities of any one series shall be substantially identical
except as to denomination and the rate or rates of interest, if any, redemption
dates and sinking fund dates, if any, and Stated Maturity, the date from which
interest, if any, shall accrue, the amount that shall be payable upon the
declaration of acceleration and except as may otherwise be provided in or
pursuant to such Board Resolution and set forth in such Officers' Certificate or
in any such indenture supplemental hereto. All Securities of any one series need
not be issued at the same time and, unless otherwise provided, a series may be
reopened for issuances of additional Securities of such series.

          If any of the terms of the Securities of any series were established
by action taken pursuant to a Board Resolution, a copy of an appropriate record
of such action shall be certified by the Secretary or an Assistant Secretary of
the Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of such series.

          Section 3.2 Denominations.

          Unless other denominations and amounts may from time to time be fixed
by or pursuant to a Board Resolution, the Registered Securities of each series,
if any, shall be issuable in registered form without coupons in denominations of
$1,000 and any integral multiple thereof.

          Section 3.3 Execution, Authentication, Delivery and Dating.

          The Securities shall be executed on behalf of the Company by its
Chairman of the Board, President, any Executive or Senior Vice President or its
Treasurer under its corporate seal reproduced thereon and attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile. The seal of the Company
may be in the form of a facsimile thereof and may be impressed, affixed,
imprinted or otherwise reproduced on the Securities. Typographical and other
minor errors or defects in any such reproduction of the seal or any such
signature shall not affect the validity or enforceability of any Security that
has been duly authenticated and delivered by the Trustee.

          Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.

          At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series, executed by
the Company, to the Trustee for authentication, together with the Board
Resolution and Officers' Certificate or supplemental indenture with respect to
such Securities referred to in Section 3.1 and a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order and subject to the provisions hereof shall authenticate
and deliver such


                                       15



Securities. In authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to Section 6.1) shall be
fully protected in relying upon, an Opinion of Counsel stating,

          (a) that the form and terms of such Securities have been established
in conformity with the provision of this Indenture;

          (b) that all conditions precedent set forth in this Indenture to the
authentication and delivery of such Securities have been complied with and that
such Securities, when authenticated and delivered by the Trustee and issued by
the Company in the manner and subject to any conditions specified in such
Opinion of Counsel, will constitute valid and legally binding obligations of the
Company, enforceable against the Company in accordance with their terms, subject
to bankruptcy, insolvency, moratorium, reorganization and other laws of general
applicability relating to or affecting the enforcement of creditors' rights and
to general equity principles; and

          (c) as to such other matters as the Trustee may reasonably request;

provided, however, that if all the Securities of any series are not to be issued
at one time, it shall not be necessary to deliver an Opinion of Counsel at the
time of issuance of each Security, but such Opinion of Counsel, with appropriate
modifications, may instead be delivered at or prior to the time of the first
issuance of Securities of such series.

          The Trustee shall not be required to authenticate such Securities if
the issue of such Securities pursuant to this Indenture will affect the
Trustee's own rights, duties or immunities under the Securities and this
Indenture or otherwise in a manner which is not reasonably acceptable to the
Trustee or if the Trustee, being advised by counsel, determines that such action
may not lawfully be taken.

          If the Company shall establish pursuant to Section 3.1 that Securities
of a series may be issued in whole or in part in global form, then the Company
shall execute and the Trustee shall, in accordance with this Section and the
Company Order with respect to such series, authenticate and deliver one or more
Securities in global from that (i) shall represent and shall be denominated in
an authorized aggregate amount equal to the aggregate principal amount of the
Outstanding Securities of such series and tenor to be represented by one or more
Securities in global form, (ii) shall be registered, in the name of the
Depositary for such Security or Securities in global form or the nominee of such
Depositary, (iii) shall be delivered to such Depositary or pursuant to such
Depositary's instruction and (iv) shall bear a legend substantially to the
following effect: "Unless and until it is exchanged in whole or in part for
Notes in certificated form, this Note may not be transferred except as a whole
by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary. Unless this certificate is presented by an authorized
representative of the Depository Trust Company (55 Water Street, New York, New
York) to the issuer or its agent for registration of transfer, exchange or
payment, and any certificate issued is registered in the name of CEDE & CO. or
such other name as requested by an authorized representative of the Depository
Trust Company and any payment is made to CEDE & CO., any transfer, pledge or


                                       16



other use hereof for value or otherwise by or to any person is wrongful since
the registered owner hereof, CEDE & CO., has an interest herein." Each
Depositary designated pursuant to Section 3.1 for a Security in global form
must, at the time of its designation and at all times while it serves as
Depositary, be a clearing agency registered under the Securities Exchange Act of
1934 and any other applicable statute or regulation.

          Each Security shall be dated the date of its authentication.

          No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose, unless there appears on such Security a
certificate of authentication substantially in the form provided for in Section
2.2 or 6.14 executed by or on behalf of the Trustee by the manual signature of
one of its authorized signatories, and such certificate upon any Security shall
be conclusive evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder.

          Section 3.4 Temporary Securities.

          Pending the preparation of definitive Securities of any series, the
Company may execute and deliver to the Trustee, and upon Company Order the
Trustee shall authenticate and deliver, in the manner provided in Section 3.3,
temporary Securities of such series which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued, in registered form without coupons and with such appropriate
insertions, omissions, substitutions and other variations as the officers of the
Company executing such Securities may determine, as evidenced by their execution
of such Securities. In the case of Securities of any series, such temporary
Securities may be in global form, representing all of the Outstanding Securities
of such series and tenor.

          Except in the case of temporary Securities in global form, which shall
be exchanged in accordance with the provisions thereof, if temporary Securities
of any series are issued, the Company will cause definitive Securities of that
series to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities of such series shall be
exchangeable upon request for definitive Securities of such series containing
identical terms and provisions upon surrender of the temporary Securities of
such series at an office or agency of the Company maintained for such purpose
pursuant to Section 10.2, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities of any series, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Securities of authorized
denominations of the same series containing identical terms and provisions.
Unless otherwise specified as contemplated by Section 3.1 with respect to a
temporary Security in global form, until so exchanged the temporary Securities
of any series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of such series.

          Section 3.5 Registration, Transfer and Exchange.

          With respect to the Securities of each series, if any, the Company
shall cause to be kept, at an office or agency of the Company maintained
pursuant to Section 10.2, a register


                                       17



(herein sometimes referred to as the "Security Register") in which, subject to
such reasonable regulations as it may prescribe, the Company shall provide for
the registration of the Securities of each series and of transfers of the
Securities of each series. The Trustee is hereby appointed "Security Registrar"
for the purpose of registering Securities and transfers and exchanges of
Securities as herein provided; provided that the Company may, from time to time,
designate (or change any designation of) any other Person or Persons to act as
Security Registrar or co-Security Registrars with respect to the Securities of
one or more series, with notice to the Trustee and as provided in Section 1.6 to
the Holders. At all reasonable times the Security Register shall be open for
inspection by the Company. In the event that the Trustee shall not be the
Security Registrar, it shall have the right to examine the Security Register at
all reasonable times.

          Upon surrender for registration of transfer of any Security of any
series at any office or agency of the Company maintained for that series
pursuant to Section 10.2, the Company shall execute, and the Trustee, at the
direction of the Company, shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Securities of the same
series of an authorized denomination, of a like aggregate principal amount
bearing a number not contemporaneously outstanding and containing identical
terms and provisions.

          Notwithstanding any other provision of this Section, unless and until
it is exchanged in whole or in part for the individual Securities represented
thereby, in definitive form, a Security in global form representing all or a
portion of the Securities of a series may not be transferred except as a whole
by the Depositary for such series to a nominee of such Depositary or by a
nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any such nominee to a successor Depositary
for such series or a nominee of such successor Depositary.

          At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series containing identical terms and
provisions, in any authorized denominations, and of a like aggregate principal
amount, upon surrender of the Securities to be exchanged at any such office or
agency of the Company maintained for that series pursuant to Section 10.2.
Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee, at the direction of the Company, shall authenticate
and deliver, the Securities which the Holder making the exchange is entitled to
receive.

          If at any time the Depositary for the Securities of a series notifies
the Company that it is unwilling or unable to continue as Depositary for the
Securities of such series or if at any time the Depositary for the Securities of
such series shall no longer be eligible under Section 3.3, the Company, by
Company Order, shall appoint a successor Depositary with respect to the
Securities of such series. If a successor Depositary for the Securities of such
series is not appointed by the Company within 90 days after the Company receives
such notice or becomes aware of such ineligibility, the Company's election
pursuant to Section 3.1(c) shall no longer be effective with respect to the
Securities of such series and the Company will execute, and the Trustee, upon
receipt of a Company Order for the authentication and delivery of definitive
Securities of such series, will authenticate and deliver, Securities of such
series in definitive form in an aggregate principal amount and of like terms and
tenor equal to the principal amount of the Security or Securities in global form
representing such series in exchange for such Security or Securities in global
form.


                                       18



          The Company may at any time and in its sole discretion determine that
individual Securities of any series issued in global form shall no longer be
represented by such Security or Securities in global form. In such event the
Company will execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of individual definitive Securities of such series
and of the same terms and tenor, will authenticate and deliver individual
Securities of such series in definitive form in authorized denominations and in
an aggregate principal amount equal to the principal amount of the Security or
Securities in global form representing such series in exchange for such Security
or Securities in global form.

          If specified by the Company pursuant to Section 3.1 with respect to a
series of Securities, the Depositary for such series of Securities may surrender
a Security in global form for such series of Securities in exchange in whole or
in part for individual Securities of such series in definitive form and of like
terms and tenor on such terms as are acceptable to the Company, the Trustee and
such Depositary. Thereupon, the Company shall execute, and the Trustee upon
receipt of a Company Order for the authentication and delivery of individual
definitive Securities of such series, shall authenticate and deliver, without
service charge:

          (a) to the Depositary or to each Person specified by such Depositary a
new individual Security or Securities of the same series and of the same tenor,
of authorized denominations, in aggregate principal amount equal to and in
exchange for such Person's beneficial interest in the Security in global form;
and

          (b) to such Depositary a new Security in global form in a denomination
equal to the difference, if any, between the principal amount of the surrendered
Security in global form and the aggregate principal amount of the individual
Securities delivered to Holders thereof.

          In any exchange provided for in any of the preceding three paragraphs,
the Company will execute and the Trustee pursuant to a Company Order will
authenticate and deliver individual Securities in definitive registered form in
authorized denominations.

          Upon the exchange of a Security in global form for Securities in
definitive form, at the direction of the Company, such Security in global form
shall be cancelled by the Trustee. Securities issued in exchange for a Security
in global form pursuant to this Section shall be registered in such names and in
such authorized denominations as the Depositary for such Security in global
form, pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee in writing. The Trustee shall deliver such
Securities to the persons in whose names such Securities are so registered or to
the Depositary.

          Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee, at the direction of the Company, shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.

          All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.


                                       19



          Every Security presented or surrendered for registration of transfer
or for exchange or redemption shall (if so required by the Company or the
Security Registrar for such series of Security presented) be duly endorsed, or
be accompanied by a written instrument of transfer in form satisfactory to the
Company and such Security Registrar duly executed by the Holder thereof or his
attorney duly authorized in writing.

          No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 3.4, 9.6 or 11.7 not involving any transfer.

          The Company shall not be required (i) to issue, register the transfer
of or exchange any Securities of any series during a period beginning at the
opening of business 15 days before the day of the selection for redemption of
Securities of that series under Section 11.3 and ending at the close of business
on the day of such selection, or (ii) to register the transfer of or exchange
any Security so selected for redemption in whole or in part, except in the case
of any Security to be redeemed in part, the portion thereof not to be redeemed.

          Section 3.6 Mutilated, Destroyed, Lost and Stolen Securities.

          If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee, at the direction of the Company, shall
authenticate and deliver in exchange therefor a new Security of the same series
containing identical terms and of like principal amount and bearing a number not
contemporaneously outstanding.

          If there be delivered to the Company and to the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security, and
(ii) such security or indemnity as may be required by them to save each of them
and any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in exchange for or in lieu of any such destroyed, lost
or stolen Security, a new Security of the same series containing identical terms
and of like principal amount and bearing a number not contemporaneously
outstanding.

          In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.

          Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.

          Every new Security of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time


                                       20



enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any all other Securities of that
series duly issued hereunder.

          The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.

          Section 3.7 Payment of Interest; Interest Rights Preserved.

          Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall, if so provided in such
Security, be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered as of the close of business on the Regular
Record Date for such interest.

          Any interest on any Security of any series which is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date for such
Security (herein called "Defaulted Interest") shall forthwith cease to be
payable to the Holder on the relevant Regular Record Date by virtue of having
been such Holder; and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in clause (a) or (b) below:

          (a) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities affected (or their respective
Predecessor Securities) are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each such Security and the
date of the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this clause provided.
Thereupon the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less than 10
days prior to the date of the proposed payment and not less than 10 days after
the receipt by the Trustee of the notice of the proposed payment. The Trustee
shall promptly notify the Company of such Special Record Date and, in the name
and at the expense of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor to be mailed, first
class postage prepaid, to each Holder of such Securities at his address as it
appears in the Security Register not less than 10 days prior to such Special
Record Date. The Trustee may, in its discretion, in the name and at the expense
of the Company, cause a similar notice to be published at least once in a
newspaper, customarily published in the English language on each Business Day
and of general circulation in the Borough of Manhattan, The City of New York,
but such publication shall not be a condition precedent to the establishment of
such Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been mailed as aforesaid,
such Defaulted Interest shall be paid to the Persons in whose names such
Securities (or their respective Predecessor Securities) are registered at the
close of business on such Special Record Date and shall no longer be payable
pursuant to the following clause (b).


                                       21



          (b) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which such Securities may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the Company to the Trustee
of the proposed payment pursuant to this clause, such payment shall be deemed
practicable by the Trustee.

          Interest on Securities of any series that bear interest may be paid by
mailing a check to the address of the person entitled thereto as such address
shall appear in the Security Register.

          Subject to the foregoing provisions of this Section and Section 3.5,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.

          Section 3.8 Persons Deemed Owners.

          Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of (and premium, if
any), and (subject to Sections 3.5 and 3.7) interest on and Additional Amounts
with respect to, such Security and for all other purposes whatsoever, whether or
not such Security be overdue, and neither the Company, the Trustee nor any agent
of the Company or the Trustee shall be affected by notice to the contrary.

          None of the Company, the Trustee, any Authenticating Agent, any Paying
Agent, the Security Registrar or any co-Security Registrar will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of a Security in
global form or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests and each of them may act or refrain from
acting without liability on any information relating to such records provided by
the Depositary.

          Section 3.9 Cancellation.

          All Securities surrendered for payment, redemption, repayment,
registration of transfer or exchange or for credit against any sinking fund
payment, if surrendered to any Person other than the Trustee, shall be delivered
to the Trustee, and any such Securities and Securities surrendered directly to
the Trustee for any such purpose shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Securities so delivered shall be
promptly cancelled by the Trustee at the direction of the Company. No securities
shall be authenticated in lieu of or in exchange for any Securities cancelled as
provided in this Section, except as expressly permitted by this Indenture. All
cancelled Securities held by the Trustee shall be destroyed by it unless by a
Company Order the Company directs their return to it.


                                       22



          Section 3.10 Computation of Interest.

          Except as otherwise contemplated by Section 3.1 for Securities of any
series, interest on the Securities of each series shall be computed on the basis
of a 360-day year of twelve 30-day months.

                                    ARTICLE 4

                           SATISFACTION AND DISCHARGE

          Section 4.1 Satisfaction and Discharge of Indenture.

          Upon the direction of the Company by a Company Order, this Indenture
shall cease to be of further effect (except as to any surviving rights of
registration of transfer or exchange of Securities herein expressly provided
for, rights, obligations, duties and immunities of the Trustee set forth in the
last paragraph of this Section and any right to receive Additional Amounts, as
provided in Section 10.4), and the Trustee, pursuant to a Company Order and at
the expense of the Company, shall execute proper instructions acknowledging
satisfaction and discharge of this Indenture, when

          (a) either

               (i) all Securities theretofore authenticated and delivered (other
     than (A) Securities which have been destroyed, lost or stolen and which
     have been replaced or paid as provided in Section 3.6, and (B) Securities
     for whose payment money has theretofore been deposited in trust or
     segregated and held in trust by the Company and thereafter repaid to the
     Company or discharged from such trust, as provided in Section 10.3) have
     been delivered to the Trustee for cancellation; or

               (ii) all such Securities not theretofore delivered to the Trustee
     for cancellation

                    (1) have become due and payable, or

                    (2) will become due and payable at their Stated Maturity
          within one year, or

                    (3) if redeemable at the option of the Company, are to be
          called for redemption within one year under arrangements satisfactory
          to the Trustee for the giving of notice of redemption by the Trustee
          in the name, and at the expense, of the Company,

and the Company, in the case of (1), (2) or (3) above, has irrevocably deposited
or caused to be deposited with the Trustee as trust funds in trust for the
purpose an amount sufficient to pay and discharge, or U.S. Government
Obligations, maturing as to principal and paying interest in such amounts and at
such times as will insure the availability of cash sufficient to pay and
discharge, the entire indebtedness on such Securities not theretofore delivered
to the Trustee for cancellation, for principal (and premium, if any) and
interest, and any Additional Amounts with


                                       23



respect thereto, to the date of such deposit (in the case of Securities which
have become due and payable) or to the Stated Maturity or Redemption Date, as
the case may be;

          (b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and

          (c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with.

          In the event there are Securities of two or more series hereunder, the
Trustee shall be required to execute an instrument acknowledging satisfaction
and discharge of this Indenture only if requested to do so by Company Order with
respect to Securities of all series as to which it is Trustee and if the other
conditions thereto are met. In the event there are two or more Trustees
hereunder, then the effectiveness of any such instrument shall be conditioned
upon receipt of such instruments from all Trustees hereunder.

          Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7 and, if money shall
have been deposited with the Trustee pursuant to subclause (ii) of clause (a) of
this Section, the obligations of the Trustee under Section 4.2 and the last
paragraph of Section 10.3 shall survive.

          Section 4.2 Application of Trust Money.

          Subject to the provisions of the last paragraph of Section 10.3, all
money deposited with the Trustee pursuant to Section 4.1 shall be held in trust
and applied by it, in accordance with the provisions of the Securities, and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and any interest and Additional Amounts for whose payment such money has
been deposited with the Trustee; but such money need not be segregated from
other funds except to the extent required by law.

                                    ARTICLE 5

                                    REMEDIES

          Section 5.1 Events of Default.

          "Event of Default," wherever used herein with respect to Securities of
any series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):

          (a) default in the payment of any interest on or any Additional
Amounts payable in respect of any of the Securities of such series as and when
such interest or Additional Amounts becomes due and payable, and continuance of
such default for a period of 30 days; or


                                       24



          (b) default in the payment of all or any part of the principal of (and
premium, if any, on) any of the Securities of such series as and when the same
becomes due and payable at Maturity, or default in the deposit of any sinking
fund payment, when and as due by the terms of any of the Securities of such
series; or

          (c) default in the performance, or breach, of any covenant or
agreement of the Company in the Securities of such series or this Indenture
(other than a covenant or agreement a default in whose performance or whose
breach is elsewhere in this Section specifically dealt with), and continuance of
such default or breach for a period of 90 days after there has been given, by
registered or certified mail, return receipt requested, to the Company by the
Trustee or to the Company and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities to which covenant or agreement
relates a written notice specifying such default or breach and requiring it to
be remedied and stating that such notice is a "Notice of Default" hereunder; or

          (d) a court having jurisdiction in the premises shall enter a decree
or order for relief in respect of the Company in an involuntary case or
proceeding under any applicable bankruptcy, insolvency, reorganization or other
similar law now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of the Company
or for any substantial part of its property, or ordering the winding-up or
liquidation of its affairs, and such decree or order shall remain unstayed and
in effect for a period of 90 consecutive days; or

          (e) the Company shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself or
its debts under any bankruptcy, insolvency, reorganization or other similar law
now or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian, sequestrator or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing; or

          (f) any other Event of Default provided with respect to Securities of
that series.

          Section 5.2 Acceleration of Maturity; Rescission and Annulment.

          If an Event of Default described in clause (a), (b) or (c) above (if
the Event of Default under clause (c) above is with respect to less than all
series of Securities then outstanding) occurs and is continuing, then, and in
each and every case, unless the principal of all of the Securities of such
series shall have already become due and payable, either the Trustee or the
Holders of not less than 25% in aggregate principal amount of the Outstanding
Securities of such series (each such series voting as a separate class in the
case of an Event of Default under clause (a) or (b) and all such series voting
as one class in the case of an Event of Default under clause (c)), by notice in
writing to the Company (and to the Trustee if given by such Holders), may
declare the entire principal of all Securities of such series, or such lesser
amount as may be


                                       25



provided for in the Securities of that series, and the interest accrued thereon
to be due and payable immediately, and upon any such declaration the same shall
become immediately due and payable.

          If an Event of Default described in clause (c) above with respect to
all series of Outstanding Securities, or any Event of Default described in
clause (d) or (e) above occurs and is continuing, then, and in each and every
such case, unless the principal of all the Securities shall have already become
due and payable, either the Trustee or the Holders of not less than 25% in
aggregate principal amount of all the Outstanding Securities (treated as one
class), by notice in writing to the Company (and to the Trustee if given by such
Holders), may declare the entire principal of all the Outstanding Securities, or
such lesser amount as may be provided for in the Securities, and interest
accrued thereon to be due and payable immediately, and upon any such declaration
the same shall become immediately due and payable.

          At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, each series voting as a separate class
(or of all Securities, as the case may be, voting as a single class), by written
notice to the Company and the Trustee, may waive all defaults with respect to
such series (or with respect to all Securities, as the case may be) and rescind
and annul such declaration and its consequences if:

          (a) the Company has paid or deposited with the Trustee a sum
sufficient to pay:

               (i) all overdue installments of interest on and any Additional
     Amounts payable in respect of all Securities of that series (or upon all
     the Securities, as the case may be),

               (ii) the principal of (and premium, if any, on) any Securities of
     that series (or upon all the Securities, as the case may be) which have
     become due otherwise than by such declaration of acceleration and interest
     thereon at the rate or rates borne by or provided for in such Securities,

               (iii) to the extent that payment of such interest is lawful,
     interest upon overdue installments of interest and Additional Amounts at
     the rate or rates borne by or provided for in such Securities, and

               (iv) all sums paid or advanced by the Trustee hereunder and the
     reasonable compensation, expenses, disbursements and advances of the
     Trustee, its agents and counsel; and

          (b) all Events of Default with respect to Securities, other than the
non-payment of the principal of Securities which has become due solely by such
declaration of acceleration, have been cured or waived as provided in Section
5.13.


                                       26



          No such rescission shall affect any subsequent default or impair any
right consequent thereon.

          Section 5.3 Collection of Indebtedness and Suits for Enforcement by
Trustee.

          The Company covenants that if

          (a) default is made in the payment of any installment of interest on
or any Additional Amounts payable in respect of any Security when such interest
or Additional Amounts shall have become due and payable and such default
continues for a period of 30 days, or

          (b) default is made in the payment of the principal of (or premium, if
any, on) any Security at its Maturity,

the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest and Additional
Amounts, if any, with interest upon the overdue principal (and premium, if any)
and, to the extent that payment of such interest shall be legally enforceable,
upon overdue installments of interest or any Additional Amounts, at the rate or
rates borne by or provided for in such Securities, and, in addition thereto,
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.

          If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Securities, wherever
situated.

          If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.

          Section 5.4 Trustee May File Proofs of Claim.

          In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue


                                       27



principal or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise,

          (a) to file and prove a claim for the whole amount, or such lesser
amount as may be provided for in the Securities of that series, of principal
(and premium, if any) and interest and any Additional Amounts owing and unpaid
in respect of the Securities and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents or counsel) and of the Holders allowed in such
judicial proceeding, and

          (b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;

and any receiver, assignee, trustee, liquidator, sequestrator (or other similar
official) in any such judicial proceeding is hereby authorized by each Holder of
Securities to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders of
Securities, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel and any other amounts due the Trustee under Section 6.7.

          Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee to
vote in respect of the claim of any Holder of a Security in any such proceeding.

          Section 5.5 Trustee May Enforce Claims Without Possession of
Securities.

          All rights of action and claims under this Indenture or any of the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery or judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.

          Section 5.6 Application of Money Collected.

          Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (and premium,
if any), interest or any Additional Amounts, upon presentation of the Securities
and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:

          First: To the payment of all amounts due the Trustee under Section
6.7; and


                                       28



          Second: To the payment of the amounts then due and unpaid upon the
Securities for principal (and premium, if any) and interest and any Additional
Amounts payable in respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind, according
to the aggregate amounts due and payable on such Securities for principal (and
premium, if any), interest and Additional Amounts, respectively; and

          Third: The balance, if any, to the Person or Persons entitled thereto.

          Section 5.7 Limitation on Suits.

          No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless

          (a) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that series;

          (b) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;

          (c) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;

          (d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and

          (e) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;

it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other such
Holders or Holders of any other series, or to obtain or to seek to obtain
priority or preference over any other Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all such Holders.

          Section 5.8 Unconditional Right of Holders to Receive Principal,
Premium and Interest.

          Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Sections 3.5 and 3.7) interest on and any Additional Amounts in respect of such
Security on the respective Stated Maturity or Maturities expressed in such
Security (or, in the case of redemption, on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder.


                                       29



          Section 5.9 Restoration of Rights and Remedies.

          If the Trustee or any Holder of a Security has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case the Company, the Trustee and the Holders of Securities shall, subject to
any determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.

          Section 5.10 Rights and Remedies Cumulative.

          Except as provided in Section 5.7 and except as otherwise provided
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Securities in the last paragraph of Section 3.6, no right or remedy
herein conferred upon or reserved to the Trustee or to the Holders of Securities
is intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.

          Section 5.11 Delay or Omission Not Waiver.

          No delay or omission of the Trustee or of any Holder of any Security
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders of Securities may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or by the Holders
of Securities.

          Section 5.12 Control by Holders of Securities.

          The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee with respect to the
Securities of such series, provided that

          (a) such direction shall not be in conflict with any rule of law or
with this Indenture,

          (b) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and

          (c) such direction is not unduly prejudicial to the rights of other
Holders of Securities of such series.


                                       30



          Section 5.13 Waiver of Past Defaults.

          Prior to a declaration of acceleration of the Maturity of the
Securities of any series as provided in Section 5.2, the Holders of not less
than a majority in principal amount of Outstanding Securities of any series
(each series voting as a separate class) may on behalf of the Holders of all the
Securities of such series waive any past default or Event of Default described
in clause (c) of Section 5.1 which relates to less than all of the series of
Outstanding Securities, or the Holders of not less than a majority in principal
amount of all Outstanding Securities (voting as one class) may on behalf of all
Holders waive any past default or Event of Default described in said clause (c)
(which relates to all series of Outstanding Securities) or in clause (d) or (e)
of Section 5.1, except a default

          (a) in the payment of the principal of (and premium, if any) or
interest on or Additional Amounts payable in respect of any Security of such
series, or

          (b) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.

          Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.

          Section 5.14 Undertaking for Costs.

          All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit, other than the Trustee, of an undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, including
the Trustee, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this Section shall
not apply to any suit instituted by the Company, the Trustee or by any Holder,
or group of Holders, holding in the aggregate more than 10% in principal amount
of the Outstanding Securities of any series, or to any suit instituted by any
Holder of any Security for the enforcement of the payment of the principal of
(and premium, if any) or interest on or any Additional Amounts in respect of any
Security on or after the respective Stated Maturity or Maturities expressed in
such Security (or, in the case of redemption, on or after the Redemption Date)
or interest on any overdue principal of any Security.


                                       31



                                    ARTICLE 6

                                   THE TRUSTEE

          Section 6.1 Certain Duties and Responsibilities.

          (a) Except during the continuance of an Event of Default known to the
Trustee,

               (i) the Trustee undertakes to perform such duties, and only such
     duties, as are specifically set forth in this Indenture, and no implied
     covenants or obligations shall be read into this Indenture against the
     Trustee; and

               (ii) in the absence of bad faith on its part, the Trustee may
     conclusively rely, as to the truth of the statements and the correctness of
     the opinions expressed therein, upon certificates or opinions furnished to
     the Trustee and conforming to the requirements of this Indenture; but in
     the case of any such certificates or opinions which by any provisions
     hereof are specifically required to be furnished to the Trustee, the
     Trustee shall be under a duty to examine the same to determine whether or
     not they conform to the requirements of this Indenture.

          (b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.

          (c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that

               (i) this subsection shall not be construed to limit the effect of
     subsection (a) of this Section;

               (ii) the Trustee shall not be liable for any error of judgment
     made in good faith by a Responsible Officer, unless it shall be proved that
     the Trustee was negligent in ascertaining the pertinent facts;

               (iii) the Trustee shall not be liable with respect to any action
     taken or omitted to be taken by it in good faith in accordance with the
     direction of the Holders of a majority in principal amount of the
     Outstanding Securities of any series, relating to the time, method and
     place of conducting any proceeding for any remedy available to the Trustee,
     or exercising any trust or power conferred upon the Trustee, under this
     Indenture with respect to the Securities of such series; and

               (iv) no provision of this Indenture shall require the Trustee to
     expend or risk its own funds or otherwise incur any financial liability in
     the performance of any of its duties hereunder, or in the exercise of any
     of its rights or powers, if it shall have


                                       32



     reasonable grounds for believing that repayment of such funds or adequate
     indemnity against such risk or liability is not reasonably assured to it.

          (d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.

          Section 6.2 Notice of Defaults.

          Within 90 days after the occurrence of any default hereunder with
respect to the Securities of any series, the Trustee shall transmit by mail to
all Holders of Securities of such series entitled to receive reports pursuant to
Section 7.3(c), notice of such default hereunder known to a Responsible Officer
of the Trustee, unless such default shall have been cured or waived; provided,
however, that, except in the case of a default in the payment of the principal
of (and premium, if any) or interest on, or any Additional Amounts with respect
to, any Security of such series or in the payment of any sinking fund
installment with respect to Securities of such series, the Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors and responsible
officers of the Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders of Securities of such series; and
provided further, that in the case of any default of the character specified in
Section 5.1(c) with respect to Securities of such series, no such notice to
Holders shall be given until at least 30 days after the occurrence thereof. For
the purpose of this Section, the term "default" means any event which is, or
after notice or lapse of time or both would become, an Event of Default, with
respect to Securities of such series. A default shall not be considered known to
a Responsible Officer of the Trustee unless it is a default in the payment of
principal (and premium, if any) or interest when due under Section 5.1(a) or (b)
or a Responsible Officer of the Trustee shall have received written notice
thereof, in accordance with this Indenture, from the Company or from the holders
of a majority in principal amount of the outstanding Securities of the series to
which the default relates.

          Section 6.3 Certain Rights of Trustee.

          Except as otherwise provided in Section 6.1:

          (a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, or other paper or document reasonably believed by it to be genuine and to
have been signed or presented by the proper party or parties;

          (b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order (other than
delivery of any Security to the Trustee for authentication and delivery pursuant
to Section 3.3, 3.5 or 3.6 which shall be sufficiently evidenced as provided
therein) and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;

          (c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the


                                       33



absence of bad faith on its part, request and rely upon an Officers'
Certificate, an Opinion of Counsel, or both;

          (d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;

          (e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders of Securities of any series pursuant to this Indenture,
unless such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be incurred by
it in compliance with such request or direction;

          (f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture or
other paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney;

          (g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder;

          (h) the Trustee shall not be liable for interest on or the investment
of any money received by it except as the Trustee may agree with the Company;

          (i) the permissive rights of the Trustee to do things enumerated in
this Indenture shall not be construed as a duty, and the Trustee shall not be
answerable for other than its negligence or willful misconduct; and

          (j) the rights, privileges, protections, immunities and benefits given
to the Trustee, including, but not limited to, its right to be indemnified, are
extended to, and shall be enforceable by, the Trustee in each of its capacities
hereunder, whether as agent or otherwise, and to each agent, custodian and other
person employed to act hereunder.

          Section 6.4 Not Responsible for Recitals or Issuance of Securities.

          The recitals contained herein and in the Securities, except the
Trustee's certificate of authentication, shall be taken as the statements of the
Company, and the Trustee or any Authenticating Agent assumes no responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities. The Trustee or any
Authenticating Agent shall not be accountable for the use or application by the
Company of Securities or the proceeds thereof.


                                       34



          Section 6.5 May Hold Securities.

          The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
6.8 and 6.13, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Authenticating Agent, Paying Agent, Security
Registrar or such other agent.

          Section 6.6 Money Held in Trust.

          Money held by the Trustee or any Paying Agent in trust hereunder need
not be segregated from other funds except to the extent required by law. Neither
the Trustee nor any Paying Agent shall be under any liability for interest on
any money received by it hereunder except as otherwise agreed with the Company.

          Section 6.7 Compensation and Reimbursement.

          The Company agrees

          (a) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust);

          (b) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad faith; and

          (c) to indemnify the Trustee and its directors, officers, employees
and agents for, and to hold them harmless against, any loss, liability or
expense incurred without negligence or willful misconduct on their part, arising
out of or in connection with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses of defending themselves
against any claim or liability in connection with the exercise or performance of
any of their powers or duties hereunder.

          As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a lien prior to the Securities of any
series upon all property and funds held or collected by the Trustee as such,
except funds held in trust for the payment of principal of (or premium, if any)
or interests on or any Additional Amounts with respect to the Securities.


                                       35



          Section 6.8 Disqualifications; Conflicting Interests. If the Trustee
has or shall acquire a conflicting interest within the meaning of the Trust
Indenture Act, the Trustee shall either eliminate such interest or resign, to
the extent and in the manner provided by, and subject to the provisions of, the
Trust Indenture Act and this Indenture.

          Section 6.9 Corporate Trustee Required; Eligibility.

          There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State or the District of Columbia, authorized under such laws to
exercise corporate trust powers, having (or, in the case of a subsidiary of a
bank holding company, its parent shall have) a combined capital and surplus of
at least $50,000,000 and subject to supervision or examination by Federal or
State authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article. Neither the Company nor any
Affiliate of the Company may serve as Trustee.

          Section 6.10 Resignation and Removal; Appointment of Successor.

          (a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.

          (b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 6.11 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to such
series.

          (c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series, delivered to the Trustee and to
the Company.

          (d) If at any time:

               (i) the Trustee shall fail to comply with Section 6.8 after
     written request therefor by the Company or by any Holder of a Security who
     has been a bona fide Holder of a Security for at least six months, or

               (ii) the Trustee shall cease to be eligible under Section 6.9 and
     shall fail to resign after written request therefor by the Company or by
     any such Holder of a Security, or


                                       36



               (iii) The Trustee shall become incapable of acting or shall be
     adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
     property shall be appointed or any public officer shall take charge or
     control of the Trustee or of its property or affairs for the purpose of
     rehabilitation, conservation or liquidation,

then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee with respect to all Securities, or (ii) subject to Section 5.14, any
Holder of a Security who has been a bona fide Holder of a Security of any series
for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Trustee with respect to all Securities of such series and the appointment of a
successor Trustee or Trustees. Such courts may thereupon, after such notice, if
any, as it may deem proper, remove the Trustee and appoint a successor Trustee
with respect to such Securities.

          (e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, with
respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or more
or all of such series and that at any time there shall be only one Trustee with
respect to the Securities of any particular series) and shall comply with the
applicable requirements of Section 6.11. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall have been
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
6.11, become the successor Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee appointed by the Company. If
no successor Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Holders of Securities and accepted
appointment in the manner required by Section 6.11, any Holder of a Security who
has been a bona fide Holder of a Security of such series for at least six months
may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such series. Such court may thereupon, after such
notice, if any, as it may deem proper, remove the Trustee and appoint a
successor Trustee with respect to such Securities.

          (f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first class mail, postage prepaid, to the
Holders of Securities of such series as their names and addresses appear in the
Security Register. Each notice shall include the name of the successor Trustee
with respect to the Securities of such series and the address of its Corporate
Trust Office.

          Section 6.11 Acceptance of Appointment by Successor.

          (a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment,


                                       37



and thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; but, on the request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder.

          (b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust, that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee and that no Trustee shall be responsible for any notice
given to, or received by, or any act or failure to act on the part of any other
Trustee hereunder, and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein, such retiring Trustee shall with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates have no further responsibility for the exercise
of rights and powers or for the performance of the duties and obligations vested
in the Trustee under this Indenture other than as hereinafter expressly set
forth, and each such successor Trustee without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee, to the extent contemplated by
such supplemental indenture, the property and money held by such retiring
Trustee hereunder with respect to the Securities of that or those series to
which the appointment of such successor Trustee relates.

          (c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.

          (d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.


                                       38



          Section 6.12 Merger, Conversion, Consolidation or Succession to
Business.

          Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, including the administration of this Indenture, by sale
or otherwise, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.

          Section 6.13 Preferential Collection of Claims Against Company.

          (a) Subject to Subsection (b) of this Section, if the Trustee shall be
or shall become a creditor, directly or indirectly, secured or unsecured, of the
Company within four months prior to a default, as defined in Subsection (c) of
this Section, or subsequent to such a default, then, unless and until such
default shall be cured, the Trustee shall set apart and hold in a special
account for the benefit of the Trustee individually, the Holders of the
Securities and the holders of other indenture securities (as defined in
Subsection (c) of this Section):

               (i) an amount equal to any and all reductions in the amount due
     and owing upon any claim as such creditor in respect of principal or
     interest, effected after the beginning of such four month period and valid
     as against the Company and its other creditors, except any such reduction
     resulting from the receipt or disposition of any property described in
     paragraph (ii) of this Subsection, or from the exercise of any right of
     set-off which the Trustee could have exercised if a petition in bankruptcy
     had been filed by or against the Company upon the date of such default; and

               (ii) all property received by the Trustee in respect of any claim
     as such creditor, either as security therefor, or in satisfaction or
     composition thereof, or otherwise, after the beginning of such four-month
     period, or an amount equal to the proceeds of any such property, if
     disposed of, subject, however, to the rights, if any, of the Company and
     its other creditors in such property or such proceeds.

          Nothing herein contained, however, shall affect the right of the
Trustee:

               (i) to retain for its own account (i) payments made on account of
     any such claim by any Person (other than the Company) who is liable
     thereon, and (ii) the proceeds of the bona fide sale of any such claim by
     the Trustee to a third person, and (iii) distributions made in cash,
     securities or other property in respect of claims filed against the Company
     in bankruptcy or receivership or in proceedings for reorganization pursuant
     to the Bankruptcy Act (as used in Section 311 of the Trust Indenture Act)
     or applicable state law;


                                       39



               (ii) to realize, for its own account, upon any property held by
     it as security for any such claim, if such property was so held prior to
     the beginning of such four-month period;

               (iii) to realize, for its own account, but only to the extent of
     the claim hereinafter mentioned, upon any property held by it as security
     for any such claim, if such claim was created after the beginning of such
     four month period and such property was received as security therefor
     simultaneously with the creation thereof, and if the Trustee shall sustain
     the burden of proving that at the time such property was so received the
     Trustee had no reasonable cause to believe that a default, as defined in
     Subsection (c) of this Section, would occur within four months; or

               (iv) to receive payment on any claim referred to in paragraph
     (ii) or (iii), against the release of any property held as security for
     such claim as provided in paragraph (ii) or (iii), as the case may be, to
     the extent of the fair value of such property.

          For the purposes of paragraphs (ii), (iii) and (iv) immediately above,
property substituted after the beginning of such four-month period for property
held as security at the time of such substitution shall, to the extent of the
fair value of the property released, have the same status as the property
released, and, to the extent that any claim referred to in any of such
paragraphs is created in renewal of or in substitution for or for the purpose of
repaying or refunding any pre-existing claim of the Trustee as such creditor,
such claim shall have the same status as such pre-existing claim.

          If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned
between the Trustee, the Holders of Securities and the holders of other
indenture securities in such manner that the Trustee, the Holders of Securities
and the holders of other indenture securities realize, as a result of payments
from such special account and payments of dividends on claims filed against the
Company in bankruptcy or receivership or in proceedings for reorganization
pursuant to the Federal Bankruptcy Code or applicable State law, the same
percentage of their respective claims, figured before crediting to the claim of
the Trustee anything on account of the receipt by it from the Company of the
funds and property in such special account and before crediting to the
respective claims of the Trustee and the Holders of Securities and the holders
of other indenture securities dividends on claims filed against the Company in
bankruptcy or receivership or in proceedings for reorganization pursuant to the
Federal Bankruptcy Code or applicable State law, but after crediting thereon
receipts on account of the indebtedness represented by their respective claims
from all sources other than from such dividends and from funds and property so
held in such special account. As used in this paragraph, with respect to any
claim, the term "dividends" shall include any distribution with respect to such
claim, in bankruptcy or receivership or proceedings for reorganization pursuant
to the Federal Bankruptcy Code or applicable State law, whether such
distribution is made in cash, securities or other property, but shall not
include any such distribution with respect to the secured portion, if any, of
such claim. The court in which such bankruptcy, receivership or proceedings for
reorganization is pending shall have jurisdiction (i) to apportion between the
Trustee and the Holders of Securities and the holders of other indenture
securities, in accordance with the provisions of this paragraph, the funds and
property held in such special account and proceeds thereof, or (ii) in lieu of
such apportionment, in whole or in


                                       40



part, to give to the provisions of this paragraph due consideration in
determining the fairness of the distributions to be made to the Trustee and the
Holders of Securities and the holders of other indenture securities with respect
to their respective claims, in which event it shall not be necessary to
liquidate or to appraise the value of any securities or other property held in
such special account or as security for any such claim, or to make a specific
account or as security for any such claim, or to make a specific allocation of
such distributions as between the secured and unsecured portions of such claims,
or otherwise to apply the provisions of this paragraph as a mathematical
formula.

          Any Trustee which has resigned or been removed after the beginning of
such four-month period shall be subject to the provisions of this Subsection as
though such resignation or removal had not occurred. If any Trustee has resigned
or been removed prior to the beginning of such four-month period, it shall be
subject to the provisions of this Subsection if and only if the following
conditions exist:

                    (1) the receipt of property or reduction of claim, which
          would have given rise to the obligation to account, if such Trustee
          had continued as Trustee, occurred after the beginning of such four
          month period; and

                    (2) such receipt of property or reduction of claim occurred
          within four months after such resignation or removal.

          (b) There shall be excluded from the operation of Subsection (a) of
this Section a creditor relationship arising from:

               (i) the ownership or acquisition of securities issued under any
     indenture, or any security or securities having a maturity of one year or
     more at the time of acquisition by the Trustee;

               (ii) advances authorized by a receivership or bankruptcy court of
     competent jurisdiction, or by this Indenture, for the purpose of preserving
     any property which shall at any time be subject to the lien of this
     Indenture or of discharging tax liens or other prior liens or encumbrances
     thereon, if notice of such advances and of the circumstances surrounding
     the making thereof is given to the Holders of Securities at the time and in
     the manner provided in this Indenture;

               (iii) disbursements made in the ordinary course of business in
     the capacity of trustee under an indenture, transfer agent, registrar,
     custodian, paying agent, fiscal agent or depositary, or other similar
     capacity;

               (iv) an indebtedness created as a result of services rendered or
     premises rented; or an indebtedness created as a result of goods or
     securities sold in a cash transaction, as defined in Subsection (c) of this
     Section;

               (v) the ownership of stock or of other securities of a
     corporation organized under the provisions of Section 25(a) of the Federal
     Reserve Act (as used in Section 311 of the Trust Indenture Act), as
     amended, which is directly or indirectly a creditor of the Company; or


                                       41



               (vi) the acquisition, ownership, acceptance or negotiation of any
     drafts, bills of exchange, acceptances or obligations which fall within the
     classification of self-liquidating paper as defined in Subsection (c) of
     this Section.

          (c) For the purpose of this Section only:

               (i) the term "default" means any failure to make payment in full
     of the principal of or interest on any of the Securities or upon the other
     indenture securities when and as such principal or interest becomes due and
     payable;

               (ii) the term "other indenture securities" means securities upon
     which the Company is an obligor outstanding under any other indenture (i)
     under which indenture and as to which securities the Trustee is also
     trustee, (ii) which contains provisions substantially similar to the
     provisions of this Section, and (iii) under which a default exists at the
     time of the apportionment of the funds and property held in such special
     account;

               (iii) the term "cash transaction" means any transaction in which
     full payment for goods or securities sold is made within seven days after
     delivery of the goods or securities in currency or in checks or other
     orders drawn upon banks or bankers and payable upon demand;

               (iv) the term "self-liquidating paper" means any draft, bill of
     exchange, acceptance or obligation which is made, drawn, negotiated or
     incurred by the Company for the purpose of financing the purchase,
     processing, manufacture, shipment, storage or sale of goods, wares or
     merchandise and which is secured by documents evidencing title to,
     possession of, or lien upon, the goods, wares or merchandise or the
     receivables or proceeds arising from the sale of the goods, wares or
     merchandise previously constituting the security, provided the security is
     received by the Trustee simultaneously with the creation of the creditor
     relationship with the Company arising from the making, drawing, negotiating
     or incurring of the draft, bill of exchange, acceptance or obligation;

               (v) the term "Company" means any obligor upon the Securities; and

               (vi) the term "Federal Bankruptcy Code" means the Bankruptcy Code
     of 1978, as amended, or Title 11 of the United States Code.

          Section 6.14 Appointment of Authenticating Agent

          The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities which shall be authorized to act on behalf
of the Trustee to authenticate Securities of such series issued upon original
issue or exchange, registration of transfer or partial redemption thereof or
pursuant to Section 3.6, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf


                                       42



of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, any State thereof
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.

          Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, by sale or otherwise, shall
continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating Agent.

          An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities, if any, of the series with respect to which such Authenticating
Agent will serve, as their names and addresses appear in the Security Register.
Any successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.

          The Trustee agrees to pay each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 6.7.

          The provisions of Sections 3.8, 6.4 and 6.5 shall be applicable to
each Authenticating Agent.

          If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternate
certificate of authentication in the following form:


                                       43



          This is one of the Securities of the series designated therein
referred to in the within mentioned Indenture.

                                        U.S. BANK NATIONAL ASSOCIATION,
                                        as Trustee


                                        By
                                           -------------------------------------
                                           As Authenticating Agent


                                        By
                                           -------------------------------------
                                           Authorized Signatory

          If all of the Securities of any series may not be originally issued at
one time, and if the Trustee does not have an office capable of authenticating
Securities upon original issuance located in a Place of Payment where the
Company wishes to have Securities of such series authenticated upon original
issuance, the Trustee, if so requested in writing (which writing need not comply
with Section 1.2) by the Company, shall appoint in accordance with this Section
6.14 an Authenticating Agent having an office in a Place of Payment designated
by the Company with respect to such series of Securities.

                                    ARTICLE 7

                HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY

          Section 7.1 Company To Furnish Trustee Names and Addresses of Holders.

          The Company will furnish or cause to be furnished to the Trustee:

          (a) semi-annually, not later than June 15 and December 15 each year, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders of Securities of such series as of the June 1 and
December 1 preceding such June 15 or December 15;

          (b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished;

          provided, however, that, in each case, so long as the Trustee is the
Security Registrar, no such list shall be required to be furnished.

          Section 7.2 Preservation of Information; Communications to Holders.

          (a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders of Securities (i) contained in
the most recent list furnished to the Trustee for each series as provided in
Section 7.1, and (ii) received by the Trustee for each series in the capacity of
Security Registrar if the Trustee is then acting in such


                                       44



capacity. The Trustee may destroy any list furnished to it as provided in
Section 7.1 upon receipt of a new list so furnished.

          (b) If three or more Holders of Securities of any series (hereinafter
referred to as "applicants") apply in writing to the Trustee, and furnish to the
Trustee reasonable proof that each such applicant has owned a Security of such
series for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other Holders of Securities of such series or with the Holders
of all Securities with respect to their rights under this Indenture or under the
Securities and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee shall,
within five business days after the receipt of such application, at its
election, either

               (i) afford such applicants access to the information preserved at
     the time by the Trustee in accordance with Section 7.2(a), or

               (ii) inform such applicants as to the approximate number of
     Holders of Securities whose names and addresses appear in the information
     preserved at the time by the Trustee in accordance with Section 7.2(a), and
     as to the approximate cost of mailing to such Holders the form of proxy or
     other communication, if any, specified in such application.

          If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon written request of such applicants,
mail to each Holder of Securities whose name and address appears in the
information preserved at the time by the Trustee in accordance with Section
7.2(a), a copy of the form of proxy or other communication which is specified in
such request, with reasonable promptness after a tender to the Trustee of the
material to be mailed and of payment, or provision for the payment, of the
reasonable expenses of mailing, unless within five days after such tender the
Trustee shall mail to such applicants and file with the Commission, together
with a copy of the material to be mailed, a written statement to the effect
that, in the opinion of the Trustee, such mailing would be contrary to the best
interests of the Holders of Securities or would be in violation of applicable
law. Such written statement shall specify the basis of such opinion. If the
Commission, after opportunity for a hearing upon the objections specified in the
written statement so filed, shall enter an order refusing to sustain any of such
objections or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for hearing,
that all the objections so sustained have been met and shall enter an order so
declaring, the Trustee shall mail copies of such material to all such Holders of
Securities with reasonable promptness after the entry of such order and the
renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.

          (c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any Paying Agent nor any Security Registrar shall be held accountable by
reason of the disclosure of any such information as to the names and addresses
of the Holders of Securities in accordance with Section 7.2(b), regardless of
the source from which such information was derived, and that the


                                       45



Trustee shall not be held accountable by reason of mailing any material pursuant
to a request made under Section 7.2(b).

          Section 7.3 Reports by Trustee.

          (a) Within 60 days after May 15 of each year commencing with the year
2008, the Trustee shall transmit by mail to all Holders of Securities, if
required by Section 313(a) of the Trust Indenture Act and as provided in
Subsection (c) of this Section, a brief report dated as of such May 15 with
respect to:

               (i) any change to its eligibility under Section 6.9 and its
     qualifications under Section 6.8, or in lieu thereof, if to the best of its
     knowledge it has continued to be eligible and qualified under said
     Sections, a written statement to such effect;

               (ii) the creation of any material change to a relationship
     specified in paragraphs (1) through (10) of Section 310(b) of the Trust
     Indenture Act;

               (iii) the character and amount of any advances (and if the
     Trustee elects so to state, the circumstances surrounding the making
     thereof) made by the Trustee (as such) which remain unpaid on the date of
     such report, and for the reimbursement of which it claims or may claim a
     lien or charge, prior to that of the Securities, on any property or funds
     held or collected by it as Trustee, except that the Trustee shall not be
     required (but may elect) to report such advances if such advances so
     remaining unpaid aggregate not more than 1/2 of 1% of the principal amount
     of the Securities Outstanding on the date of such report;

               (iv) any change to the amount, interest rate and maturity date of
     all other indebtedness owing by the Company (or by any other obligor on the
     Securities) to the Trustee in its individual capacity, on the date of such
     report, with a brief description of any property held as collateral
     security therefor, except an indebtedness based upon a creditor
     relationship arising in any manner described in Section 6.13(b)(ii), (iii),
     (iv) or (vi);

               (v) the property and funds, if any, physically in the possession
     of the Trustee as such on the date of such report;

               (vi) any additional issue of Securities which the Trustee has not
     previously reported; and

               (vii) any action taken by the Trustee in the performance of its
     duties hereunder which it has not previously reported and which in its
     opinion materially affects the Securities, except action in respect of a
     default, notice of which has been or is to be withheld by the Trustee in
     accordance with Section 6.2, provided however, that if the Trust Indenture
     Act is amended subsequent to the date hereof to eliminate the requirement
     of the Trustee's brief report, the report required by this Section need not
     be transmitted to any Holders.


                                       46



          (b) The Trustee shall transmit by mail to all Holders of Securities,
as provided in subsection (c) to this Section, a brief report with respect to
the character and amount of any advances (and if the Trustee elects so to state,
the circumstances surrounding the making thereof) made by the Trustee (as such)
since the date of the last report transmitted pursuant to subsection (a) of this
Section (or if no such report has yet been so transmitted, since the date of
execution of this instrument) for the reimbursement of which it claims or may
claim a lien or charge, prior to that of the Securities, on property or funds
collected by it as Trustee, and which it has not previously reported pursuant to
this subsection, except that the Trustee shall not be required (but may elect)
to report such advances if such advances remaining unpaid at any time aggregate
10% or less of the principal amount of the Securities Outstanding at such time,
such report to be transmitted within 90 days after such time.

          (c) Reports pursuant to this Section and Section 6.2 shall be
transmitted by mail:

               (i) to all Holders of Securities, as the names and addresses of
     such Holders appear in the Security Register;

               (ii) to such holders of indenture securities that have within the
     two years preceding such transmission, filed their names and addresses with
     the Trustee for that purpose; and

               (iii) except in the case of reports pursuant to subsection (b) of
     this Section, to each Holder of a Security whose name and address is
     preserved at the time by the Trustee, as provided in Section 7.2(a).

          (d) A copy of each such report shall, at the time of such transmission
to Holders of Securities, be filed by the Trustee with any stock exchange upon
which the Securities are listed, with the Commission and with the Company. The
Company will notify the Trustee when any Securities are listed on any stock
exchange.

          Section 7.4 Reports by the Company.

          The Company shall:

          (a) file with the Trustee, within 30 days after the Company is
required to file the same with the Commission, copies of the annual reports and
of the information, documents and other reports (or copies of such portions of
any of the foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Company may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934; or, if the Company is not required to file information, documents
or reports pursuant to either of said Sections, then it shall file with the
Trustee and the Commission, in accordance with rules and regulations prescribed
from time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to Section 13
of the Securities Exchange Act of 1934 in respect of a security listed and
registered on a national securities exchange as may be prescribed from time to
time in such rules and regulations;


                                       47



          (b) file with the Trustee and Commission, in accordance with rules and
regulations prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by the Company
with the conditions and covenants of this Indenture as may be required from time
to time by such rules and regulations; and

          (c) transmit within 30 days after the filing thereof with the Trustee,
in the manner and to the extent provided in Section 7.3(c) with respect to
reports pursuant to Section 7.3(a), such summaries of any information, documents
and reports required to be filed by the Company pursuant to paragraphs (a) and
(b) of this Section as may be required by rules and regulations prescribed from
time to time by the Commission.

                                    ARTICLE 8

                CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE

          Section 8.1 Consolidations and Mergers of Company and Sales, Leases
and Conveyances Permitted Subject to Certain Conditions.

          The Company covenants that it will not merge or consolidate with any
other corporation or sell or convey all or substantially all of its assets to
any Person, unless (i) either the Company shall be the continuing corporation,
or the successor corporation or the Person which acquires by sale or conveyance
substantially all the assets of the Company (if other than the Company) shall be
a corporation organized under the laws of the United States of America or any
State thereof and shall expressly assume the due and punctual payment of the
principal of and interest on all the Securities, according to their tenor, and
the due and punctual performance and observance of all of the covenants and
conditions of this Indenture to be performed or observed by the Company, by
supplemental indenture satisfactory to the Trustee, executed and delivered to
the Trustee by such corporation, and (ii) the Company or such successor
corporation, as the case may be, shall not, immediately after such merger or
consolidation, or such sale or conveyance, be in default in the performance of
any such covenant or condition.

          Section 8.2 Rights and Duties of Successor Corporation.

          In case of any such consolidation, merger, sale, lease or conveyance
and upon any such assumption by the successor corporation, such successor
corporation shall succeed to and be substituted for the Company, with the same
effect as if it had been named herein as the party of the first part, and the
predecessor corporation shall be relieved of any further obligation under this
Indenture and the Securities. Such successor corporation thereupon may cause to
be signed, and may issue either in its own name or in the name of the Company,
any or all of the Securities issuable hereunder which theretofore shall not have
been signed by the Company and delivered to the Trustee; and, upon the order of
such successor corporation, instead of the Company, and subject to all the
terms, conditions and limitations in this Indenture prescribed, the Trustee
shall authenticate and shall deliver any Securities which previously shall have
been signed and delivered by the officers of the Company to the Trustee for
authentication, and any Securities which such successor corporation thereafter
shall cause to be signed and delivered to the Trustee for that purpose. All the
Securities so issued shall in all respects have the same legal rank and


                                       48



benefit under this Indenture as the Securities theretofore or thereafter issued
in accordance with the terms of this Indenture as though all of such Securities
had been issued at the date of the execution hereof.

          In case of any such consolidation, merger, sale, lease or conveyance,
such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.

          Section 8.3 Officers' Certificate and Opinion of Counsel.

          The Trustee, subject to the provisions of Sections 6.1 and 6.3, may
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, lease or conveyance, and any
such assumption and any such supplemental indenture, if any, complies with the
provisions of this Article and that all conditions precedent herein provided
relating to such transactions have been complied with.

                                    ARTICLE 9

                             SUPPLEMENTAL INDENTURE

          Section 9.1 Supplemental Indentures without Consent of Holders.

          Without the consent of any Holders of Securities, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:

          (a) to evidence the succession of another Person to the Company, and
the assumption by any such successor of the covenants of the Company herein and
in the Securities contained; or

          (b) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be for
the benefit of less than all series of Securities, stating that such covenants
are expressly being included solely for the benefit of such series) or to
surrender any right or power herein conferred upon the Company; or

          (c) to change or eliminate any restrictions on the payment of
principal (or premium, if any) on Securities or to permit or facilitate the
issuance of Securities in uncertificated form, provided any such action shall
not adversely affect the interests of the Holders of Securities of any series in
any material respect; or

          (d) to change or eliminate any provision of this Indenture, provided
that any such change or elimination (i) shall become effective only when there
is no Security Outstanding of any series created prior to the execution of such
supplemental indenture which is entitled to the benefit of such provision or
(ii) shall not apply to any Security Outstanding; or

          (e) to establish the form or terms of Securities of any series as
permitted by Sections 2.1 and 3.1; or


                                       49



          (f) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or more
series and to add to or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements of Section
6.11(b); or

          (g) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision herein,
or to make any other provisions with respect to matters or questions arising
under this Indenture which shall not adversely affect the interest of the
Holders of Securities of any series in any material respect; or

          (h) to add to, delete from or revise the conditions, limitations and
restrictions on the authorized amount, terms or purposes of issue,
authentication and delivery of Securities, as herein set forth; or

          (i) to add any additional Events of Default (and if such Events of
Default are to be applicable to less than all series of Securities stating that
such Events of Default are expressly being included solely to be applicable to
such series); or

          (j) to add to or change or eliminate any provision of this Indenture
as shall be necessary or desirable in accordance with any amendments to the
Trust Indenture Act, provided such action shall not adversely affect the
interest of the Holders of the Securities of any series in any material respect;
or

          (k) to secure the Securities pursuant to Section 10.6.

          Section 9.2 Supplemental Indentures with Consent of Holders.

          With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture, or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided, however,
that no such supplemental Indenture shall, without the consent of the Holder of
each Outstanding Security affected thereby,

          (a) change the Stated Maturity of the principal of, or any installment
of interest on, any Security, or reduce the principal amount thereof or the rate
of interest thereon or any Additional Amounts payable in respect thereof, or any
premium payable upon the redemption thereof, or change the obligation of the
Company to pay Additional Amounts pursuant to Section 10.4 (except as
contemplated by Section 8.1 and permitted by Section 9.1(a)), or reduce the
amount of the principal of an Original Issue Discount Security that would be due
and payable upon a declaration of acceleration of the maturity thereof pursuant
to Section 5.2, or change any Place of Payment where, or the coin or currency in
which, any Security or any premium or the interest thereon is payable, or impair
the right to institute suit for the enforcement of any such payment on or after
the Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date), or


                                       50



          (b) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture, or

          (c) modify any of the provisions of this Section, or Section 5.13, or
Section 10.7, except to increase any such percentage or to provide that certain
other provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Security affected thereby, or

          (d) adversely affect the right to repayment, if any, of Securities of
any series at the option of the Holders thereof.

          A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.

          It shall not be necessary for any Act of Holders of Securities under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.

          Section 9.3 Execution of Supplemental Indentures.

          In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trust created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 6.1) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.

          Section 9.4 Effect of Supplemental Indentures.

          Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.

          Section 9.5 Conformity with Trust Indenture Act.

          Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.


                                       51



          Section 9.6 Reference in Securities to Supplemental Indentures.

          Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Trustee and the Company, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.

                                   ARTICLE 10

                                   COVENANTS

          Section 10.1 Payment of Principal, Premium, if any, and Interest.

          The Company covenants and agrees for the benefit of the Holders of
each series of Securities that it will duly and punctually pay the principal of
(and premium, if any), interest on and any Additional Amounts payable in respect
of the Securities of that series in accordance with the terms of such series of
Securities and this Indenture.

          Section 10.2 Maintenance of Office or Agency.

          The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.

          The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in each Place of Payment for Securities of any series for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency. Unless otherwise set forth in a Board Resolution or indenture
supplemental hereto with respect to a series of Securities, the Company hereby
designates as the Place of Payment for each series of Securities the Borough of
Manhattan, The City of New York, and initially appoints U.S. Bank Trust National
Association, an Affiliate of the Trustee, at its Corporate Trust Office as the
Company's office or agency for each of such purposes in such city.


                                       52



          Section 10.3 Money for Securities Payments To Be Held in Trust.

          If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any), or interest on, any of the Securities of
that series, segregate and hold in trust for the benefit of the Person entitled
thereto a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided, and will promptly notify the Trustee of its
action or failure so to act.

          Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, on or prior to each due date of the principal of
(and premium, if any), or interest on, any Securities of that series, deposit
with a Paying Agent a sum sufficient to pay the principal (and premium, if any)
or interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action
or failure so to act.

          The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will

          (a) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest on Securities of that series in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided;

          (b) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities of that series) in the making of any payment
of principal (and premium, if any) or interest on the Securities of that series;
and

          (c) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent.

          The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same terms as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.

          Except as otherwise provided in the form of Securities of any
particular series pursuant to the provisions of this Indenture, any money
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of (and premium, if any) or interest on
any Security of any series and remaining unclaimed for two years after such
principal (and premium, if any) or interest has become due and payable shall be
paid to the Company on Company Request, or (if then held by the Company) shall
be discharged from such trust; and the Holder of such Security shall thereafter,
as an unsecured general creditor, look only


                                       53



to the Company for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the Company
as trustee thereof, shall thereupon cease; provided, however, that the Trustee
or such Paying Agent, before being required to make any such repayment, may at
the expense of the Company cause to be published once, in an Authorized
Newspaper in each Place of Payment or to be mailed to Holders of Securities, or
both, notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication
or mailing, any unclaimed balance of such money then remaining will be repaid to
the Company. In the absence of a written request from the Company to return
unclaimed funds to the Company, the Trustee shall from time to time deliver all
unclaimed funds to or as directed by applicable escheat authorities, as
determined by the Trustee in its sole discretion, in accordance with the
customary practices and procedures of the Trustee. Any unclaimed funds held by
the Trustee pursuant to this section shall be held uninvested and without any
liability for interest.

          Section 10.4 Additional Amounts.

          If the Securities of a series provide for the payment of Additional
Amounts, the Company will pay to the Holder of any Security of any series
Additional Amounts as provided therein. Whenever in this Indenture there is
mentioned, in any context, the payment of the principal of (or premium, if any)
or interest on, or in respect of, any Security of any series or the net proceeds
received on the sale or exchange of any Security of any series, such mention
shall be deemed to include mention of the payment of Additional Amounts provided
for in the terms of such Security and this Section to the extent that, in such
context, Additional Amounts are, were or would be payable in respect thereof
pursuant to the provisions of this Section and express mention of the payment of
Additional Amounts (if applicable) in any provisions hereof shall not be
construed as excluding Additional Amounts in those provisions hereof where such
express mention is not made.

          If the Securities of a series provide for the payment of Additional
Amounts, at least 10 days prior to the first Interest Payment Date with respect
to that series of Securities (or if the Securities of that series will not bear
interest prior to Maturity, the first day on which a payment of principal (and
premium, if any) is made, and at least 10 days prior to each date of payment of
principal (and premium, if any) or interest, if there has been any change with
respect to the matters set forth in the below-mentioned Officers' Certificate),
the Company will furnish the Trustee and the Company's principal Paying Agent or
Paying Agents, if other than the Trustee, with an Officers' Certificate
instructing the Trustee and such Paying Agent or Paying Agents whether such
payment of principal (and premium, if any) or interest on the Securities of that
series shall be made to Holders of Securities of that series who are United
States Aliens without withholding for or on account of any tax, assessment or
other governmental charge described in the Securities of that series. If any
such withholding shall be required, then such Officers' Certificate shall
specify by country the amount, if any, required to be withheld on such payments
to such Holders of Securities and the Company will pay to the Trustee or such
Paying Agent the Additional Amounts required by the terms of such Security and
the first paragraph of this Section. The Company covenants to indemnify the
Trustee and any Paying Agent for, and to hold them harmless against, any loss,
liability or expense reasonably incurred without negligence or bad faith on
their part arising out of or in connection with actions taken or omitted by any
of them in reliance on any Officers' Certificate furnished pursuant to this
Section.


                                       54



          Section 10.5 Statement as to Compliance; Notice of Certain Defaults.

          (a) The Company will deliver to the Trustee, within 120 days after the
end of each fiscal year (which on the date hereof ends on December 31), a
written statement, which need not comply with Section 1.2, signed by the
principal executive officer, the principal financial officer or the principal
accounting officer of the Company, stating that

               (i) a review of the activities of the Company and its
     subsidiaries during such year and of performance under this Indenture has
     been made under his supervision, and

               (ii) to the best of his knowledge, based on such review, (a) the
     Company has fulfilled all of its obligations under this Indenture
     throughout such year, or, if there has been a default in the fulfillment of
     any such obligation, specifying each such default known to him and the
     nature and status thereof, and (b) no event has occurred and is continuing
     which is, or after notice or lapse of time or both would become, an Event
     of Default, or, if such event has occurred and is continuing, specifying
     each such event known to him and the nature and status thereof.

          (b) The Company will deliver to the Trustee within five days after the
occurrence thereof, written notice of any event which after notice or lapse of
time or both would become an Event of Default pursuant to clause (d) of Section
5.1.

          Section 10.6 Limitation on Liens

          Except as provided below the Company will not, and will not permit any
Restricted Subsidiary to, at any time pledge or otherwise subject to any lien
any of its or such Restricted Subsidiary's property, tangible or intangible,
real or personal (hereinafter "property"), without thereby expressly securing
the Securities (together, if the Company so chooses, with any other securities
entitled to the benefit of a similar covenant) equally and ratably with any and
all other obligations and indebtedness secured by such pledge or other lien, so
long as any such other obligations and indebtedness shall be so secured, and the
Company covenants that if and when any such pledge or other lien is created, the
Securities will be so secured thereby; provided, that, this restriction shall
not apply to any lien or charge on any property existing as of the date of this
Indenture or to any of:

                    (1) Any lien or charge on any property; provided, that the
          creditor has no recourse against the Company or any Restricted
          Subsidiary except recourse to such property or to the proceeds of any
          sale or lease of such property or both;

                    (2) Any lien or charge on any property existing at the time
          of acquisition of such property (including acquisition through merger
          or consolidation) or given to secure the payment of all or any part of
          the purchase price or the cost of construction or improvement thereof
          or to secure any indebtedness incurred prior thereto, at the time of,
          or within 180 days (18 months in the case of Transportation Assets and
          Information Technology Assets) after, the acquisition, construction or
          improvement thereof for the purpose of financing


                                       55



          all or part of the purchase price or the cost of construction or
          improvement thereof;

                    (3) Any of the following liens or charges: (a) liens for
          taxes, assessments or other governmental charges or levies which are
          not yet due or are payable without penalty or of which the amount,
          applicability or validity is being contested by the Company or such
          Restricted Subsidiary in good faith by appropriate proceedings and the
          Company or such Restricted Subsidiary shall have set aside on its
          books reserves which it deems to be adequate with respect thereto
          (segregated to the extent required by generally accepted accounting
          principles), (b) undetermined liens or charges incident to
          construction or to property under construction, (c) carrier's,
          workmen's, warehousemen's, landlord's, repairmen's or other like liens
          arising in the ordinary course of business in respect of obligations
          which are not overdue or which are being contested by the Company or
          such Restricted Subsidiary in good faith by appropriate proceedings,
          or deposits to obtain the release of such liens, or (d) any
          encumbrances consisting of zoning restrictions, exceptions,
          encroachments, leases, licenses, easements, covenants and other like
          restrictions on the use of real property and minor defects and
          irregularities in the title thereto, which do not materially impair
          the use of such property by the Company or such Restricted Subsidiary
          in the operation of its business or the value of such property for the
          purpose of such business;

                    (4) Mortgages and pledges, liens or charges by a Restricted
          Subsidiary as security for indebtedness owed to the Company or any
          Restricted Subsidiary;

                    (5) Deposits made with or security given in the ordinary
          course of business to any governmental agency or other body created or
          approved by law or governmental regulation in order to enable the
          Company or such Restricted Subsidiary to maintain self-insurance, or
          to participate in any fund in connection with workmen's compensation,
          unemployment insurance, old-age pensions, or other social security, or
          to share in any privileges or other benefits available to corporations
          participating in any such arrangement, or for any other purpose at any
          time required by law or regulation promulgated by any governmental
          agency or office as a condition to the transaction of any business or
          the exercise of any privilege or license, or deposits of assets of the
          Company or such Restricted Subsidiary with any surety company or clerk
          of any court, or in escrow, as collateral in connection with, or in
          lieu of, any bond on appeal by the Company or such Restricted
          Subsidiary from any judgment or decree against it, or in connection
          with any other proceedings in actions at law or suits in equity by or
          against the Company or such Restricted Subsidiary; provided, that,
          such judgment, decree or other proceedings are being contested in good
          faith; and provided, further, that the Company or such Restricted
          Subsidiary shall have set aside on its books reserves which its
          independent certified accountants shall have deemed to be adequate
          with respect thereto (segregated to the extent required by generally
          accepted accounting principles);


                                       56



                    (6) Liens or charges incurred or deposits made in the
          ordinary course of business to secure performance of letters of
          credit, bids, tenders, appeal and performance bonds not incurred in
          connection with the borrowing of money, the obtaining of advances or
          payment of the deferred price of property;

                    (7) A banker's lien or right of offset of the holder of such
          indebtedness in favor of any lender of moneys or holder of commercial
          paper of the Company or a Restricted Subsidiary in the ordinary course
          of business on moneys of the Company or a Restricted Subsidiary
          deposited with such lender or holder in the ordinary course of
          business;

                    (8) Any inchoate liens arising under the Employee Retirement
          Income Security Act of 1974, as amended, to secure any contingent
          liability of the Company;

                    (9) Any lien or charge on the Company's interest as
          sublessor in any sublease, which lien or charge is granted in favor of
          the person leasing the property subject to the sublease to the
          Company;

                    (10) Any extension, renewal or replacement (or successive
          extensions, renewals or replacements), in whole or in part, of any
          mortgage or other lien referred to in the foregoing clauses;

                    (11) Other liens incidental to the conduct of its business
          or the ownership of its property and assets which were not incurred in
          connection with the borrowing of money (including purchase money
          indebtedness) or the obtaining of advances or credit, and which do not
          in the aggregate materially detract from the value of its property or
          assets or materially impair the use thereof in the operation of its
          business; and

                    (12) Other liens or charges not permitted by any of
          subsections (1) through (11) above on any property, now owned or
          hereafter acquired; provided, that, no such lien or charge shall be
          incurred pursuant to this subsection (12) if the aggregate amount of
          indebtedness secured by liens or charges incurred pursuant to this
          subsection (12) subsequent to the date of this Indenture, including
          the lien or charge proposed to be incurred, shall exceed 20% of Net
          Tangible Assets.

          Section 10.7 Waiver of Certain Covenants.

          The Company may omit in any particular instance to comply with any
term, provision or condition set forth in Section 10.6 with respect to the
Securities of any series if before the time for such compliance the Holders of
at least a majority in principal amount of the Outstanding Securities of such
series shall, by Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such term, provision or condition,
but no such waiver shall extend to or affect such term, provision or condition
except to the extent so expressly waived, and, until such waiver shall become
effective, the obligations of


                                       57



the Company and the duties of the Trustee in respect of any such term, provision
or condition shall remain in full force and effect.

                                   ARTICLE 11

                            REDEMPTION OF SECURITIES

          Section 11.1 Applicability of Article.

          Securities of any series which are redeemable at the option of the
Company before their Stated Maturity shall be redeemable in accordance with the
terms of such Securities and (except as otherwise specified as contemplated by
Section 3.1 for Securities of any series) this Article. Securities of any series
which are redeemable at the option of the Holder before their Stated Maturity
shall be redeemable in accordance with the terms of such Securities and (except
as otherwise specified as contemplated by Section 3.1 for Securities of any
series) Sections 11.5 and 11.6 of this Article.

          Section 11.2 Election to Redeem; Notice to Trustee

          The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company of the Securities of any series, the Company shall, at least 60 days
prior to the Redemption Date fixed by the Company (unless a shorter notice shall
be satisfactory to the Trustee), notify the Trustee of such Redemption Date, the
principal amount of Securities of such series to be redeemed and the relevant
terms of the Securities to be redeemed. The election of a Holder to redeem any
Securities shall be evidenced by a writing by a Holder sent to the Trustee and
the Company at least 60 days prior to the Redemption Date fixed by the Holder in
such notice (unless a shorter notice period shall be satisfactory to the
Trustee). Such notice shall notify the Trustee and the Company of such
Redemption Date, the principal amount of Securities of such series to be
redeemed and any relevant terms of the Securities of such series to be redeemed.

          Section 11.3 Selection by Trustee of Securities To Be Redeemed.

          If less than all the Securities of any series having the same terms
are to be redeemed, the particular Securities to be redeemed shall be selected
not more than 60 days prior to the Redemption Date by the Trustee from the
Outstanding Securities of such series not previously called for redemption, by
such method as the Trustee shall deem fair and appropriate and which may provide
for the selection for redemption of portions (equal to the minimum authorized
denomination for Securities of such series or any integral multiple thereof
which is also an authorized denomination) of the principal amount of Securities
of such series of a denomination larger than the minimum authorized denomination
for Securities of such series.

          The Trustee shall promptly notify the Company and the Security
Registrar (if other than itself) in writing of the Securities selected for
redemption and, in the case of any Securities selected for partial redemption,
the principal amount thereof to be redeemed.

          For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities


                                       58



redeemed or to be redeemed only in part, to the portion of the principal of such
Securities which has been or is to be redeemed.

          Section 11.4 Notice of Redemption.

          Notice of redemption shall be given in the manner provided in Section
1.6, not less than 30 nor more than 60 days prior to the Redemption Date, unless
a shorter period is specified in the Securities to be redeemed (which shorter
period shall be acceptable to the Trustee), to the Holders of Securities to be
redeemed. Failure to give notice by mailing in the manner herein provided to the
Holder of any Securities designated for redemption as a whole or in part, or any
defect in the notice to any such Holder, shall not affect the validity of the
proceedings for the redemption of any other Securities or portion thereof. Any
notice that is mailed to the Holder of any Securities in the manner herein
provided shall be conclusively presumed to have been duly given, whether or not
such Holder receives the notice.

          All notices of redemption shall state:

          (a) the Redemption Date,

          (b) the Redemption Price (or the method of calculating the Redemption
Price) and accrued interest, if any,

          (c) if less than all Outstanding Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amount) of the particular Securities to be redeemed,

          (d) in case any Security is to be redeemed in part only, the notice
which relates to such Security shall state that on and after the Redemption
Date, upon surrender of such Security, the Holder of such Security will receive,
without charge, a new Security or Securities of authorized denominations for the
principal amount thereof remaining unredeemed,

          (e) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed, and, if applicable, that
interest thereon shall cease to accrue on and after said date,

          (f) the Place or Places of Payment where such Securities are to be
surrendered for payment of the Redemption Price, and

          (g) that the redemption is for a sinking fund, if such is the case.

          A notice of redemption published as contemplated by Section 1.6 need
not identify particular Securities to be redeemed.

          Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.


                                       59



          Section 11.5 Deposit of Redemption Price.

          On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 10.3) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on and any Additional
Amounts with respect thereto, all the Securities or portions thereof which are
to be redeemed on that date.

          Section 11.6 Securities Payable on Redemption Date.

          Notice of redemption having been given by the Holder to the Company
and Trustee pursuant to Section 11.2 or to the Holder by the Company or the
Trustee pursuant to Section 11.4, the Securities so to be redeemed shall, on the
Redemption Date, become due and payable at the Redemption Price therein
specified, and from and after such date (unless the Company shall default in the
payment of the Redemption Price and accrued interest) such Securities shall
cease to bear interest. Upon surrender of any such Security for redemption in
accordance with said notice, such Security shall be paid by the Company at the
Redemption Price, together with accrued interest (and any Additional Amounts) to
the Redemption Date; provided, however, that installments of interest on
Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the Regular Record
Dates according to their terms and the provisions of Section 3.7.

          If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.

          Section 11.7 Securities Redeemed in Part.

          Any Security which is to be redeemed only in part shall be surrendered
at any office or agency of the Company maintained for that purpose pursuant to
Section 10.2 (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or his attorney duly authorized
in writing) and the Company shall execute and the Trustee shall authenticate and
deliver to the Holder of such Security, without service charge, a new Security
or Securities of the same series, containing identical terms and provisions, of
any authorized denomination as requested by such Holder in aggregate principal
amount equal to and in exchange for the unredeemed portion of the principal of
the Security so surrendered.

                                   ARTICLE 12

                                  SINKING FUNDS

          Section 12.1 Applicability of Article.

          The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series, except as otherwise specified as
contemplated by Section 3.1


                                       60



for Securities of such series or as otherwise permitted or required by any form
of Security of such series issued pursuant to this Indenture.

          The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment," and any payment in excess of such series is herein referred to as
an "optional sinking fund payment." If provided for by the terms of Securities
of any series, the cash amount of any sinking fund payment may be subject to
reduction as provided in Section 12.2. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.

          Section 12.2 Satisfaction of Sinking Fund Payments with Securities.

          The Company may, in satisfaction of all or any part of any sinking
fund payment with respect to the Securities of a series to be made pursuant to
the terms of such Securities as provided for by the terms of such series, (1)
deliver Outstanding Securities of such series (other than any of such Securities
previously called for redemption) theretofore purchased or receive credit for
Securities (not previously so credited) theretofore purchased by the Company and
delivered to the Trustee for cancellation pursuant to Section 3.9, and (2) apply
as a credit Securities of such series which have been redeemed either at the
election of the Company pursuant to the terms of such series of Securities or
through the application of permitted optional sinking fund payments pursuant to
the terms of such Securities, provided that such Securities have not been
previously so credited. Such Securities shall be received and credited for such
purpose by the Trustee at the Redemption Price specified in such Securities for
redemption through operation of the sinking fund and the amount of such sinking
fund payment shall be reduced accordingly. If, as a result of the delivery or
credit of Securities of any series in lieu of cash payments pursuant to this
Section 12.2, the principal amount of Securities of such series to be redeemed
in order to exhaust the aforesaid cash payment shall be less than $100,000, the
Trustee need not call Securities of such series for redemption, except upon
Company Request, and such cash payment shall be held by the Trustee or a Paying
Agent and applied to the next succeeding sinking fund payment, provided,
however, that the Trustee or such Paying Agent shall at the request of the
Company from time to time pay over and deliver to the Company any cash payment
so being held by the Trustee or such Paying Agent upon delivery by the Company
to the Trustee of Securities of that series purchased by the Company having an
unpaid principal amount equal to the cash payment requested to be released to
the Company.

          Section 12.3 Redemption of Securities for Sinking Fund.

          Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting of
Securities of that series pursuant to Section 12.2, and the optional amount, if
any, to be added in cash to the next ensuing mandatory sinking fund payment, and
will also deliver to the Trustee any Securities to be so credited and not
theretofore delivered. If such Officers' Certificate shall specify an optional
amount to be added in cash to the next ensuing mandatory sinking fund payment,
the


                                       61



Company shall thereupon be obligated to pay the amount therein specified. Not
less than 30 days before each such sinking fund payment date the Trustee shall
select the Securities to be redeemed upon such sinking fund payment date in the
manner specified in Section 11.3 and cause notice of the redemption thereof to
be given in the name of and at the expense of the Company in the manner provided
in Section 11.4. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Sections
11.6 and 11.7.

                                    * * * * *

          This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.


                                       62



          IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.

                                        GATX CORPORATION


                                        BY /s/ WILLIAM J. HASEK
                                           -------------------------------------
                                        Name: William J. Hasek
                                        Title: Senior Vice President and
                                               Treasurer


[SEAL]

Attest:


/s/ LISA M. IBARRA
- -------------------------------------


                                        U.S. BANK NATIONAL ASSOCIATION,
                                        as Trustee


                                        BY /s/ KATHY L. MITCHELL
                                           -------------------------------------
                                        Name: Kathy L. Mitchell
                                        Title: Vice President


                                                                       Indenture

EX-10.27

                                                                   Exhibit 10.27

                                  AMENDMENT OF
                 GATX CORPORATION EXECUTIVE DEFERRED INCOME PLAN

     The GATX Corporation Executive Deferred Income Plan for Plan Years
beginning in 1984, 1985, and 1987 (collectively the "Plan") is hereby amended
with respect to each Plan participant (to the extent that the participant
otherwise participates for each such Plan Year) for amounts deferred (as that
term is used in Treas. Reg. Section 1.409A-6) on or after January 1, 2005, by
amending each of the participation agreements reflecting awards under the Plan
(the "Participation Agreements") as set forth below; provided that, except to
the extent otherwise required by Treas. Reg. Section 1.409A-1 through 6, these
amendments (i) shall not apply to an Employee who remained employed by the
Company until age 65 or (if earlier) his Earliest Retirement Date, if the
Employee attained age 65 or (if earlier) his Earliest Retirement Date prior to
January 1, 2005; and (ii) shall not apply to an Employee whose employment
terminated prior to January 1, 2005.

     1. By adding the following immediately prior to the period at the end of
the second sentence of Paragraph 2 of each Participation Agreement:

     "; provided, however, that no payment shall be made in accordance with this
     sentence if the Participant does not survive until age 65"

     2. By substituting the phrase "15 equal" and "10 equal," respectively, for
the phrases "15 substantially equal" and "10 substantially equal" where the
latter phrases appear in the second sentence of Paragraph 2 of each
Participation Agreement.

     3. By substituting the following for Paragraphs 4 and 5 of each
Participation Agreement:

     "4. Beneficiary Payments, Death Prior to Age 65. If the Employee dies prior
to the Employee's 65th birthday while employed by GATX, the Employer shall pay
the beneficiary designated by the Employee, in a lump sum on the date of death
(subject to paragraph 22), the amount actually deferred by the Employee, net of
any amount paid to the Employee under paragraph 2, with interest thereon at the
rate of 20 percent per annum, compounded annually, all as reflected on Schedule
A attached hereto and made a part hereof. The Employee may elect, by written
direction filed with the Compensation Committee prior to his death, to have the
amount otherwise payable under this paragraph 4 (together with interest from the
date of death at the rate of 10 percent per annum, compounded annually) paid in
equal annual installments over a period not in excess of 15 years commencing as
of the July 1st (or January 1 in the case of a Participation Agreement for the
1987 Plan Year) next following the date of the Employee's death; provided that
an election that is filed under this sentence after December 31, 2007 shall be
disregarded and without effect.

     5. Beneficiary Payments, Death After Age 65. If the Employee terminates
employment after the Earliest Retirement Date and survives to age 65 (regardless
of whether the Employee's 65th birthday is before, on, or after termination of
employment), but dies prior to receiving any or all annual installment payments
due to the Employee, the Employer shall continue to pay any



unpaid annual payments to the beneficiary designated by the Employee, in the
same form, at the same time, and in the same amount as those payments would have
been made if the Employee had survived."

     4. By substituting the following for Paragraph 7 of each Participation
Agreement:

     "7. Disability Termination. Subject to paragraph 25, if the Employee's
employment with GATX is terminated prior to the Employee's 65th birthday by
reason of the Employee becoming permanently and totally disabled, the Employer
shall pay the Employee, in a lump sum on the Termination Date (subject to
paragraph 22), the amount actually deferred by the Employee, net of any amount
paid to the Employee under paragraph 2, with interest thereon at the rate of 20
percent per annum, compounded annually, all as reflected on Schedule A attached
hereto and made a part hereof. For purposes of this Participation Agreement,
permanent and total disability shall mean any disability entitling the Employee
to benefits under the GATX Corporation Disability Income Plan. "

     5. By adding the following sentence at the end of Paragraph 10 of each
Participation Agreement:

"However, no amendment under this paragraph 10 or paragraph 16 shall be adopted
or effective if it would result in accelerated recognition of income or
imposition of additional tax under section 409A of the Internal Revenue Code of
1986 or, except as otherwise provided in the amendment, would cause amounts that
were not otherwise subject to section 409A to become subject to section 409A."

     6. By substituting the following for Paragraph 13 of each Participation
Agreement:

     "13. Effect of Transaction. This Participation Agreement shall be binding
on the Employee and the Employee's heirs and legal representatives and on the
Employer and its successors and assigns. If, as a result of a sale of assets,
sale of stock, spin-off, or through any other means (a "Transaction"), GATX
Corporation ceases to be the owner, directly or indirectly, of 80 percent or
more of the voting stock of the Employer or if the Employee ceases to be
employed by either GATX Corporation or any company at least 80 percent of the
voting stock of which is directly or indirectly owned by GATX Corporation, then
following the occurrence of the Transaction, all references in this
Participation Agreement to GATX or the Compensation Committee shall mean the
Employee's employer or its successor or assign. Notwithstanding any other
provision of this Participation Agreement, if the Employee's employment with
GATX (or a successor, as applicable) terminates before age 65 or for a reason
other than death, total and permanent disability, competitive involvement or
criminal conduct involving GATX, during the 24-month period next following a
Transaction then, subject to paragraph 25, if the Employee is 55 years or older
on the day of such termination of employment, the Employer (or successor, as
applicable) shall pay the Employee, in a lump sum on the Termination Date
(subject to paragraph 22), the amount actually deferred by the Employee, net of
any amount paid to the Employee under paragraph 2, with interest thereon at the
rate of 20 percent per annum, compounded annually, all as reflected on Schedule
A attached hereto and made a part hereof."


                                       2



     7. By substituting the phrase "before age 65 or for a reason other than"
for the phrase "for a reason other than the Employee's retirement on or after
attainment of the Employee's Earliest Retirement Date," where the latter phrase
appears in the first sentence of paragraph 14 of each Participation Agreement.

     8. By substituting the following for paragraph 14(b) of each Participation
Agreement:

     "(b) subject to paragraph 25, if the Employee is 55 years or older on the
     day of such termination of employment, the Employer shall pay the Employee,
     in a lump sum on the Termination Date (subject to paragraph 22), the amount
     actually deferred by the Employee, net of any amount paid to the Employee
     under paragraph 2, with interest thereon at the rate of 20 percent per
     annum, compounded annually, all as reflected on Schedule A attached hereto
     and made a part hereof."

     9. By adding the following paragraphs 22, 23, 24 and 25 to each
Participation Agreement to follow immediately after paragraph 21 thereof:

     "22. Permitted Date of Distribution. For purposes of Section 409A, a
payment will be considered to be made under this Participation Agreement as of
the date specified herein if it is made no later than the end of the calendar
year in which such date occurs or, if later, by the 15th day of the third
calendar month following that specified date, provided that the Employee is not
permitted, directly or indirectly, to designate the taxable year of the payment.
Payments under this Participation Agreement shall be made on or as soon as
practicable after the date specified for payment under this Participation
Agreement. The foregoing provisions of this paragraph 22 are intended to conform
the payments under this Participation Agreement to the requirements of Section
409A, and shall not be construed to permit delay by the Employer of payment of
amounts due earlier in accordance with this Participation Agreement.

     23. Termination Date. References in this Participation Agreement to the
Employee's termination of employment (including references to an Employee's
employment termination, the Employee's Termination Date, and to the Employee
terminating employment) shall mean the Employee ceasing to be employed by the
Company and the Affiliates, subject to the following:

(i)   The employment relationship will be deemed to have ended at the time the
      Employee and his employer reasonably anticipate that a level of bona fide
      services the Employee would perform for the Company and the Affiliates
      after such date (whether as an Employee or independent contractor, but not
      as a director) would permanently decrease to no more than 20% of the
      average level of bona fide services performed over the immediately
      preceding 36 month period (or the full period of service to the Company
      and the Affiliates if the Employee has performed services for the Company
      and the Affiliates for less than 36 months). In the absence of an
      expectation that the Employee will perform at the above-described level,
      the date of termination of employment will not be delayed solely by reason
      of the Employee continuing to be on the Company's and the Affiliates'
      payroll after such date.

(ii)  The employment relationship will be treated as continuing intact while the
      Employee is on a bona fide leave of absence (determined in accordance with
      Treas. Reg. Section 409A-1(h)).


                                       3



(iii) If a Transaction occurs while the Employee is employed by GATX, the
      determination of whether a Termination Date has occurred will be made in
      accordance with paragraph 13.

(iv)  The term "Affiliates" means all persons with whom the Company is
      considered to be a single employer under section 414(b) of the Internal
      Revenue Code of 1986, as amended and all persons with whom the Company
      would be considered a single employer under section 414(c) thereof.

     24. Delayed Distribution for Specified Employees. If a participant is a
Specified Employee at the time of termination of employment, payments of
benefits under the Plan may not be made before the date that is six months after
the Termination Date or, if earlier, the date of death of the Employee. At the
end of the six-month period described in the preceding sentence, amounts that
could not be paid by reason of the limitation in this paragraph (i) shall be
paid on the first day of the seventh month following the Termination Date. For
purposes of the Plan, the term "Specified Employee" shall be defined in
accordance with Treas. Reg. Section 1.409A-1(i) and such rules as may be
established by the Chief Executive Officer of the Company or his delegate from
time to time.

     25. Distribution Election. Subject to the following provisions of this
paragraph 25, the Employee may elect that if he or she otherwise becomes
eligible to receive a lump sum payment upon termination of employment pursuant
paragraph 7, paragraph 13, or paragraph 14(b), no such lump sum payment shall be
made, and instead this Participation Agreement shall remain in effect and,
unless the Employee dies prior to reaching age 65 (in which case the Employee
shall be deemed to have died while employed by GATX), the Employee (and his
beneficiaries) shall be entitled to the benefits hereunder in the same manner as
if the Employee had remained in the continuous employ of the Employer (or
successor) until the Employee retired on the Employee's Earliest Retirement
Date. An election described in this paragraph 25 that is filed after December
31, 2007 shall be disregarded and without effect.

     10. By cancelling the terms of the Retirement Supplement to Executive
Deferred Income Plan Participation Agreements.


                                       4

EX-10.28

                                                                   Exhibit 10.28

                      AMENDMENT OF 1995 LONG TERM INCENTIVE
                       COMPENSATION PLAN AND EQUITY AWARDS

     The GATX Corporation 1995 Long Term Incentive Compensation Plan (the "1995
Plan") is hereby amended in the particulars set forth below, with such
amendments effective January 1, 2005 with respect to awards granted under the
1995 Plan ("Awards") that were outstanding on or after January 1, 2005, but
excluding Awards to the extent that they were vested on December 31, 2004, and
excluding Non-Qualified Stock Options and Stock Appreciation Rights to the
extent that they were exercisable on December 31, 2004. Capitalized terms used
in this amendment and not defined herein shall have the meaning set forth in the
1995 Plan.

1.   By adding the following at the end of paragraph I-2 of the 1995 Plan:

     "Nothing in the Plan shall be construed to permit a modification of an
     award, or to permit the payment of a dividend or dividend equivalent, if
     such actions would result in accelerated recognition of taxable income or
     imposition of additional tax under Code section 409A."

2.   By adding the following sentence at the end of paragraph I-4 of the 1995
     Plan:

     "However, in no event shall this paragraph I-4 be construed to permit a
     modification (including a replacement) of a Non-Qualified Stock Option or
     Stock Appreciation Right if such modification either: (i) would result in
     accelerated recognition of income or imposition of additional tax under
     Code section 409A; or (ii) would cause the Non-Qualified Stock Option or
     Stock Appreciation Right subject to the modification (or cause a
     replacement Non-Qualified Stock Option or Stock Appreciation Right) to be
     subject to Code section 409A."

3.   By adding the following sentence at the end of paragraph I-5 of the 1995
     Plan:

     "No amendment or termination shall be adopted or effective if it would
     result in accelerated recognition of income or imposition of additional tax
     under Code section 409A or, except as otherwise provided in the amendment,
     would cause amounts that were not otherwise subject to Code section 409A to
     become subject to section 409A."

4.   By adding the following at the end of paragraph III-3 of the 1995 Plan:

     "No Non-Qualified Stock Option or Stock Appreciation Right shall condition
     the receipt of dividends with respect to a Non-Qualified Stock Option or
     Stock Appreciation Right on the exercise of such award, or otherwise
     provide for payment of such dividends in a manner that would cause the
     payment to be treated as an offset to or reduction of the exercise price of
     the Non-Qualified Stock Option or Stock Appreciation Right pursuant Treas.
     Reg. Section 1.409A-1(b)(5)(i)(E). This paragraph III-3 shall not be
     construed to permit the deferred settlement of Non-Qualified Stock Options
     or Stock Appreciation Rights, if such settlement would result in deferral
     of compensation under Treas. Reg. Section 1.409A-1(b)(5)(i)(A)(3) (except
     as permitted in paragraphs (i) and (ii) of that section)."



5.   By adding the following paragraph I-8 to the 1995 Plan, to follow
     immediately after paragraph I-7 thereof:

     "2.8. Limitations for 409A. Notwithstanding any provisions of the award
     agreements to the contrary, Stock Appreciation Rights subject to this
     subsection 2.8 are amended to provide that in determining the value to be
     delivered upon the exercise of a Stock Appreciation Right (including,
     without limitation, a Stock Appreciation Right granted in connection with a
     Non-Qualified Stock Option), and the number of shares to be delivered upon
     the exercise of a stock-settled Stock Appreciation Right, and to the extent
     that the award does not specify the manner of determining fair market value
     on the date of exercise, such fair market value shall be determined in a
     manner that is consistent with the definition of "fair market value" set
     forth in the Plan."

6.   By substituting the phrase "Subject to paragraph (f) below, all Stock
     Options then outstanding" for the phrase "All Stock Options then
     outstanding" where the latter phrase appears at the beginning of paragraph
     VIII-2(a) of the Plan.

7.   By substituting the phrase "Except as otherwise specified in paragraphs (a)
     and (b) above, but subject to paragraph (f) below" for the phrase "Except
     as otherwise specified in paragraphs (a) and (b) above" where the latter
     phrase appears at the beginning of paragraph VIII-2(e) of the Plan.

8.   By adding the following at the end of paragraph VIII-2 of the Plan:

     "(f) Notwithstanding the foregoing provisions of the Plan or the provisions
     of the applicable award agreement, a Participant shall not have a right to
     receive, upon exercise of the Non-Qualified Stock Option or Stock
     Appreciation Right with respect to a share of Common Stock, an amount
     (including Common Stock having a fair market value at the time of exercise)
     greater than the excess of (i) the fair market value of a share of Common
     Stock at the time of exercise over (ii) the exercise price with respect to
     a share covered by the award (with the application of this provision to
     include, without limitation, the elimination of the right to receive such
     greater amount upon or following a Special Acceleration), provided that
     this sentence shall not be construed to permit distribution of cash rather
     than Common Stock upon the exercise of a Stock Option or Stock Appreciation
     Right, to the extent not otherwise provided in the award. Notwithstanding
     the foregoing provisions of the Plan or the provisions of the applicable
     award agreement, a Participant shall not have a right to receive any rights
     otherwise provided upon a Special Acceleration if such rights it would
     result in accelerated recognition of income or imposition of additional tax
     under Code section 409A."


                                       2

EX-10.29

                                                                   Exhibit 10.29

                       AMENDMENT OF 2004 EQUITY INCENTIVE
                       COMPENSATION PLAN AND EQUITY AWARDS

     The GATX Corporation 2004 Equity Incentive Compensation Plan (the "2004
Plan") is hereby amended in the particulars set forth below, with such
amendments effective January 1, 2005 with respect to Awards that were
outstanding on or after January 1, 2005, but excluding Awards to the extent that
they were vested on December 31, 2004, and excluding Options and SARs to the
extent that they were exercisable on December 31, 2004. Capitalized terms used
in this amendment and not defined herein shall have the meaning set forth in the
2004 Plan.

1.   By deleting the following phrase where it appears in subsection 2.2 of the
     2004 Plan:

     "; provided, however, that the Committee, in its discretion, may establish
     an Exercise Price of an Option or SAR granted under this Section 2 that
     varies based on the stock price of a comparator group of companies or such
     other index as is selected by the Committee (resulting in an Exercise Price
     that may at times be less than the Fair Market Value of a share of Stock on
     the date of grant); and further provided that such a variable price shall
     not be used if the Committee intends that the Options or SARs would be
     Performance-Based Compensation, and the use of such variable pricing would
     preclude such treatment"

2.   By adding the following subsection 2.8 at the end of Section 2 of the Plan:

     "2.8. Limitations for 409A. Options and SARs are subject to the following,
     notwithstanding any provisions of the Award Agreements to the contrary:

     (a)  Options and SARs are amended to eliminate the Participant's right to
          receive, upon exercise of the Option or SAR with respect to a share of
          Stock, an amount (including Stock having a Fair Market Value at the
          time of exercise) greater than the excess of (i) the Fair Market Value
          of a share of Stock at the time of exercise over (ii) the exercise
          price with respect to a share covered by the Award (with the
          application of this provision to include, without limitation, the
          elimination of the right to receive such greater amount following a
          Change in Control), provided that this sentence shall not be construed
          to permit distribution of cash rather than stock upon the exercise of
          an option or SAR.

     (b)  SARs are amended to provide that in determining the value to be
          delivered upon the exercise of an SAR (including, without limitation,
          an SAR granted in connection with an Option), and the number of shares
          to be delivered upon the exercise of a stock-settled SAR, and to the
          extent that the Award does not specify the manner of determining fair
          market value on the date of exercise, such fair market value shall be
          determined in a manner that is consistent with the definition of "Fair
          Market Value" set forth in the Plan.

3.   By adding the following sentence at the end of paragraph 4.2(f) of the 2004
     Plan:



     "However, in no event shall this paragraph (f) be construed to permit a
     modification (including a replacement) of an Option or SAR if such
     modification either: (i) would result in accelerated recognition of income
     or imposition of additional tax under Code section 409A; or (ii) would
     cause the Option or SAR subject to the modification (or cause a replacement
     Option or SAR) to be subject to Code section 409A, provided that the
     restriction of this clause (ii) shall not apply to any Option or SAR that,
     at the time it is granted or otherwise, is designated as being deferred
     compensation subject to Code section 409A."

4.   By adding the following paragraph (d) at the end of paragraph 4.5 of the
     2004 Plan:

     "(d) This subsection 4.5 and subsection 4.6 shall be subject to the
          following:

     (i)   This subsection 4.5 shall not be construed to permit the grant of an
           Option or SAR if such action would cause the Option or SAR being
           granted or the option or stock appreciation right being replaced to
           be subject to Code section 409A, provided that this paragraph (i)
           shall not apply to any Option or SAR (or option or stock appreciation
           right granted under another plan) being replaced that, at the time it
           is granted or otherwise, is designated as being deferred compensation
           subject to Code section 409A.

     (ii)  Except with respect to an Option or SAR that, at the time it is
           granted or otherwise, is designated as being deferred compensation
           subject to Code section 409A, no Option or SAR shall condition the
           receipt of dividends with respect to an Option or SAR on the exercise
           of such Award, or otherwise provide for payment of such dividends in
           a manner that would cause the payment to be treated as an offset to
           or reduction of the exercise price of the Option or SAR pursuant
           Treas. Reg. Section 1.409A-1(b)(5)(i)(E).

     (iii) Neither this subsection 4.5 nor subsection 4.6 shall be construed to
           permit a modification of an Award, or to permit the payment of a
           dividend or dividend equivalent, if such actions would result in
           accelerated recognition of taxable income or imposition of additional
           tax under Code section 409A."

5.   By adding the following sentence at the end of Section 4.6 of the 2004
     Plan:

     "Except for Options and SARs designated at the time of grant or otherwise
     as intended to be subject to Code section 409A, this subsection 4.6 shall
     not be construed to permit the deferred settlement of Options or SARs, if
     such settlement would result in deferral of compensation under Treas. Reg.
     Section 1.409A-1(b)(5)(i)(A)(3) (except as permitted in paragraphs (i) and
     (ii) of that section)."

6.   By adding the following sentence at the end of Section 7 of the 2004 Plan:

     "No amendment or termination shall be adopted or effective if it would
     result in accelerated recognition of income or imposition of additional tax
     under Code section 409A or, except as otherwise provided in the amendment,
     would cause amounts that were not otherwise subject to Code section 409A to
     become subject to section 409A."


                                        2

EX-10.30

                                                                   Exhibit 10.30

                                GATX CORPORATION
                        CASH INCENTIVE COMPENSATION PLAN

                          (as amended January 1, 2005)

                                    SECTION 1
                                     GENERAL

     1.1. Purpose. The purpose of the GATX Corporation Cash Incentive
Compensation Plan (the "Plan") is to promote the long term financial interest of
GATX Corporation (the "Company") by (i) attracting and retaining executive
personnel possessing outstanding ability; (ii) further motivating such
individuals by means of cash incentives to achieve long-range goals; and (iii)
providing cash incentive compensation opportunities which are competitive with
those of other major corporations.

     1.2. Participation. Subject to the terms and conditions of the Plan, the
Committee shall determine and designate, from time to time, from among the
Eligible Employees, those persons who will be granted one or more Cash Incentive
Awards under the Plan, and thereby become "Participants" in the Plan.

     1.3. Operation, Administration, and Definitions. The operation and
administration of the Plan, including the Cash Incentive Awards made under the
Plan, shall be subject to the provisions of Section 4 (relating to operation and
administration). Capitalized terms in the Plan shall be defined as set forth in
the Plan (including the definition provisions of Section 8).

                                    SECTION 2
                              CASH INCENTIVE AWARD

     2.1. Designation. The Committee, from time to time in its discretion, shall
designate from among the Eligible Employees those individuals who will have an
opportunity to receive Cash Incentive Awards under the Plan for any Performance
Period, together with the amounts to be distributed in accordance with Section
3. Except as otherwise provided by the Committee, Cash Incentive Awards are
intended to be Performance-Based Compensation. Any Cash Incentive Awards
intended to be Performance-Based Compensation shall comply with the requirements
of this Section 2 to the extent such compliance is determined by the Committee
to be required for the Cash Incentive Awards to be treated as Performance-Based
Compensation. To the extent that the provisions of this Section 2 reflect the
requirements applicable to Performance-Based Compensation, such provisions shall
not apply to the portion of any Cash Incentive Award that is not intended to be
Performance-Based Compensation.

     2.2. Determination of Cash Incentive Awards. Each Cash Incentive Award that
is intended to be Performance-Based Compensation shall be determined in
accordance with the following:


                                       1



(a)  The Cash Incentive Award for each Participant for any Performance Period
     shall equal 0.75% of the Company's Total Gross Income Less Total Ownership
     Costs (as defined in Section 8) for the Performance Period.

(b)  At any time prior to the payment of a Cash Incentive Award, the Committee
     may, in its discretion, reduce the amount of such award based on such
     factors as the Committee determines appropriate.

(c)  No payment shall be made of any Cash Incentive Award that is intended to be
     Performance-Based Compensation until achievement of the applicable
     performance objectives set forth in paragraph (a) above has been certified
     by the Committee.

Any Cash Incentive Awards that are not intended to be Performance-Based
Compensation may be conditioned on any performance goals, factors, or criteria
as the Committee shall determine.

                                    SECTION 3
                                  DISTRIBUTIONS

Subject to subsection 2.2, a Participant's Cash Incentive Award for a
performance period ending in a calendar year shall be distributed to the
Participant in the following calendar year but not later than March 15 of the
following calendar year; provided, however, that for purposes of determining
compliance with Code section 409A, a payment will be considered to satisfy the
requirements of this Section3 if it is made no later than the end of the
calendar year following the end of the applicable performance period."

                                    SECTION 4
                          OPERATION AND ADMINISTRATION

     4.1. Effective Date. Subject to the approval of the stockholders of the
Company at the Company's 2004 annual meeting of its stockholders, the Plan shall
be effective as of January 1, 2004 (the "Effective Date"); provided, however,
that to the extent that Cash Incentive Awards are granted under the Plan prior
to its approval by stockholders, the Cash Incentive Awards shall be contingent
on approval of the Plan by the stockholders of the Company at such annual
meeting.

     4.2. Tax Withholding. All distributions under the Plan are subject to
withholding of all applicable taxes, and the Committee may condition the
delivery of any benefits under the Plan on satisfaction of the applicable
withholding obligations.

     4.3. Transferability. Except as otherwise provided by the Committee, Cash
Incentive Awards under the Plan are not transferable except as designated by the
Participant by will or by the laws of descent and distribution.

     4.4. Heirs and Successors. The Plan shall be binding upon, and inure to the
benefit of, the Company and its successors and assigns, and upon any person
acquiring, whether by merger, consolidation, purchase of assets or otherwise,
all or substantially all of the Company's assets and business. If any benefits
deliverable to a Participant under the Plan have not been delivered


                                       2



at the time of the Participant's death, such benefits shall be delivered to the
Designated Beneficiary in accordance with the provisions of the Plan. The
"Designated Beneficiary" shall be the beneficiary or beneficiaries designated by
a Participant in a writing filed with the Committee in such form and at such
time as the Committee shall require. If a deceased Participant fails to
designate a beneficiary, or if the Designated Beneficiary does not survive the
Participant, any benefits distributable to the Participant shall be distributed
to the legal representative of the estate of the Participant. If a deceased
Participant designates a beneficiary and the Designated Beneficiary survives the
Participant but dies before the complete distribution of benefits to the
Designated Beneficiary under the Plan, then any benefits distributable to the
Designated Beneficiary shall be distributed to the legal representative of the
estate of the Designated Beneficiary.

     4.5. Agreement With Company. A Cash Incentive Award under the Plan may be
subject to such terms and conditions, not inconsistent with the Plan, as the
Committee shall, in its sole discretion, prescribe. The terms and conditions of
any Cash Incentive Award to any Participant may be reflected in such form of
written document as is determined by the Committee. A copy of such document
shall be provided to the Participant, and the Committee may, but need not
require that the Participant sign a copy of such document. Such document is
referred to in the Plan as an "Award Agreement" regardless of whether any
Participant signature is required.

     4.6. Action by Company or Subsidiary. Any action required or permitted to
be taken by the Company or any Subsidiary shall be by resolution of its board of
directors, or by action of one or more members of the board (including a
committee of the board) who are duly authorized to act for the board, or (except
to the extent prohibited by applicable law or applicable rules of any stock
exchange) by a duly authorized officer of such company.

     4.7. Gender and Number. Where the context admits, words in any gender shall
include any other gender, words in the singular shall include the plural and the
plural shall include the singular.

     4.8. Limitation of Implied Rights.

(a)  Neither a Participant nor any other person shall, by reason of
     participation in the Plan, acquire any right in or title to any assets,
     funds or property of the Company or any Subsidiary whatsoever, including,
     without limitation, any specific funds, assets, or other property which the
     Company or any Subsidiary, in its sole discretion, may set aside in
     anticipation of a liability under the Plan. A Participant shall have only a
     contractual right to the amounts, if any, payable under the Plan, unsecured
     by any assets of the Company or any Subsidiary, and nothing contained in
     the Plan shall constitute a guarantee that the assets of the Company or any
     Subsidiary shall be sufficient to pay any benefits to any person.

(b)  The Plan does not constitute a contract of employment, and selection as a
     Participant will not give any participating employee or other individual
     the right to be retained in the employ of the Company or any Subsidiary or
     the right to continue to provide services to


                                       3



     the Company or any Subsidiary, nor any right or claim to any benefit under
     the Plan, unless such right or claim has specifically accrued under the
     terms of the Plan.

     4.9. Evidence. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person acting on
it considers pertinent and reliable, and signed, made or presented by the proper
party or parties.

                                    SECTION 5
                         SOURCE OF BENEFIT DISTRIBUTIONS

     An Employer shall be liable for distribution of benefits under the Plan
with respect to any Participant to the extent that such benefits are
attributable to services rendered by the Participant to that Employer. Any
disputes relating to liability of Employers for benefit distributions shall be
resolved by the Committee.

                                    SECTION 6
                                    COMMITTEE

     6.1. Administration. The authority to control and manage the operation and
administration of the Plan shall be vested in the Compensation Committee of the
Board (the "Committee") in accordance with this Section 6, Section 303A.05 of
the NYSE Listed Company Manual and section 162(m) of the Code. The Committee
shall consist solely of three members of the Board who are not employees of the
Company or any Subsidiary. If the Committee does not exist, or for any other
reason determined by the Board, the Board may take any action under the Plan
that would otherwise be the responsibility of the Committee.

     6.2. Powers of Committee. The Committee's administration of the Plan shall
be subject to the following:

(a)  Subject to the provisions of the Plan, the Committee will have the
     authority and discretion to select from among the Eligible Employees those
     persons who shall be eligible to participate in the Plan.

(b)  The Committee will have the authority and discretion to interpret the Plan,
     to establish, amend, and rescind any rules and regulations relating to the
     Plan, and to make all other determinations that may be necessary or
     advisable for the administration of the Plan.

(c)  Any interpretation of the Plan by the Committee and any decision made by it
     under the Plan is final and binding on all persons.

     6.3. Delegation by Committee. Except to the extent prohibited by applicable
law, the Committee may allocate all or any portion of its responsibilities and
powers to any one or more of its members and may delegate all or any part of its
responsibilities and powers to any person or persons selected by it. Any such
allocation or delegation may be revoked by the Committee at any time.


                                       4



     6.4. Information to be Furnished to Committee. The Company and Subsidiaries
shall furnish the Committee with such data and information as it determines may
be required for it to discharge its duties. The records of the Company and
Subsidiaries as to an employee's or Participant's employment, termination of
employment, leave of absence, reemployment and compensation shall be conclusive
on all persons unless determined to be incorrect. Participants and other persons
entitled to benefits under the Plan must furnish the Committee such evidence,
data or information as the Committee considers desirable to carry out the terms
of the Plan.

                                    SECTION 7
                            AMENDMENT AND TERMINATION

     The Board may, at any time, amend or terminate the Plan, provided that no
amendment or termination may, in the absence of written consent to the change by
the affected Participant (or, if the Participant is not then living, the
affected beneficiary), adversely affect the rights of any Participant or
beneficiary under any Cash Incentive Award granted under the Plan prior to the
date such amendment is adopted by the Board.

                                    SECTION 8
                                  DEFINED TERMS

     In addition to the other definitions contained herein, the following
definitions shall apply:

(a)  Board. The term "Board" means the Board of Directors of the Company.

(b)  Cash Incentive Award. The term "Cash Incentive Award" means an award
     determined in accordance with Section 2 and distributable in accordance
     with Section 3.

(c)  Code. The term "Code" means the Internal Revenue Code of 1986, as amended.
     A reference to any provision of the Code shall include reference to any
     successor provision of the Code.

(d)  Eligible Employee. The term "Eligible Employee" means any key employee of
     the Company or a Subsidiary.

(e)  Employer. The term "Employer" means the Company and each of the
     Subsidiaries whose employees the Committee includes in the Plan as
     Participants.

(f)  Participant. The term "Participant" means an individual who has been
     designated by the Committee as eligible to participate in the Plan.

(g)  Performance-Based Compensation. The term "Performance-Based Compensation"
     shall have the meaning ascribed to it in section 162(m) of the Code and the
     regulations thereunder.

(h)  Performance Period. The term "Performance Period" shall mean the Company's
     fiscal year, or such other period as may be established by the Committee
     from time to time as the Performance Period.


                                       5



(i)  Subsidiary. The term "Subsidiary" means any company during any period in
     which it is a "subsidiary corporation" (as that term is defined in Code
     section 424(f)) with respect to the Company, and any other business venture
     designated by the Committee in which the Company (or any entity that is a
     successor to the Company) has a significant interest, as determined in the
     discretion of the Committee.

(j)  Total Gross Income Less Total Ownership Costs. The term "Total Gross Income
     Less Total Ownership Costs" means the Company's "Total Gross Income" less
     "Total Ownership Costs" as reported in the Company's consolidated statement
     of income (or if such amounts are not reported in the Company's statement
     of income, the line items in the Company's statement of income determined
     by the Committee to correspond thereto).


                                       6

EX-10.31

                                                                   Exhibit 10.31

                                GATX CORPORATION
                          DIRECTORS' PHANTOM STOCK PLAN

SECTION 1. PURPOSE AND EFFECTIVE DATE.

The purpose of the Directors' Phantom Stock Plan (the "Plan") is to provide fees
to non-employee directors of GATX Corporation (the "Company") in the form of
common stock of the Company that is delivered on a deferred basis. To conform
the Plan to the requirements of section 409A of the Internal Revenue Code (the
"Code"), the terms of the Directors' Phantom Stock Plan are as set forth below,
effective with respect to amounts that were first accrued and vested under the
Plan after December 31, 2004.

SECTION 2. DEFINITIONS.

Unless the context otherwise requires, the following words as used herein shall
have the following meanings:

(a)  AFFILIATE. The term "Affiliate" means any person with whom the Company is
     considered to be a single employer under section 414(b) of the Code and any
     person with whom the Company would be considered a single employer under
     section 414(c) of the Code.

(b)  BOARD. The term "Board" means the Board of Directors of the Company.

(c)  PARTICIPANT. The term "Participant" means an eligible member of the Board
     who participates in the Plan.

(d)  QUARTER. The term "Quarter" means each of the three calendar month periods
     ending on the last day of January, April, July and October, respectively.

(e)  QUARTERLY PHANTOM STOCK AMOUNT. The term "Quarterly Phantom Stock Amount"
     for any Quarter means the portion of a director's compensation required to
     be paid in phantom stock for that quarter.

(f)  SPECIFIED EMPLOYEE. The term "Specified Employee" shall be defined in
     accordance with Treas. Reg. Section 1.409A-1(i) and such rules as may be
     established by the Chief Executive Officer of the Company or his or her
     delegate from time to time.

(g)  TERMINATION DATE. An individual's "Termination Date" is the date on which
     the individual ceases to serve on the boards of directors of the Company
     and the Affiliates, subject to the following:

     (i) A director will be deemed to have ceased to serve on the board of
     directors of the Company and the Affiliates at the time the director and
     the Company reasonably



     anticipate that a level of bona fide services the individual would perform
     for the Company and the Affiliates as a director after such date would
     permanently decrease to no more than 20% of the average level of bona fide
     services performed over the immediately preceding 36 month period (or the
     full period of service to the Company and the Affiliates if the individual
     has performed services as a director for the Company and the Affiliates for
     less than 36 months).

     (ii) The relationship as a director will be treated as continuing intact
     while the individual is on a bona fide leave of absence (determined in
     accordance with Treas. Reg. Section 1.409A-1(h)).

(h)  UNFORESEEABLE EMERGENCY. The term "Unforeseeable Emergency" shall mean a
     severe financial hardship to the Participant resulting from an illness or
     accident of the Participant, the Participant's spouse, the Participant's
     beneficiary, or the Participant's dependent; loss of the Participant's
     property due to casualty; or other similar extraordinary and unforeseeable
     circumstances arising as a result of events beyond the control of the
     Participant; provided, however, that the determination of Unforeseeable
     Emergency shall be made by the Administrator in a manner that is consistent
     with the meaning of Unforeseeable Emergency set forth in Treas. Reg.
     Section 1.409A-3(i)(3).

SECTION 3. ELIGIBILITY.

Each member of the Board who is not an employee of the Company or the Affiliates
shall participate in the Plan as of the first day he/she begins service on the
Board.

SECTION 4. PHANTOM STOCK ACCOUNT.

The Company will maintain a Phantom Stock Account for each Participant. The
Phantom Stock Account will be credited each Quarter with the number of units of
phantom stock equal to the result obtained by dividing the portion of the
Quarterly Phantom Stock Amount by the average of the high and low price of the
Company's common stock on the New York Stock Exchange on the last trading day of
each Quarter. Until distribution as provided herein, the Participant's Phantom
Stock Account will be credited with additional units of phantom stock
representing dividends declared on the Company's common stock based on the
average of the high and low price of such stock on the New York Stock Exchange
on the date such dividend is paid. The last day of each Quarter shall be a
"Valuation Date" with respect to the Phantom Stock Account.

The Phantom Stock Account will be merely a bookkeeping entry on the Company's
books so that no trust or escrow arrangement will be used and the Participant
will remain a general, unsecured creditor with respect to his or her account. As
promptly as practicable following the end of each Quarter, a statement will be
sent to each Participant reflecting the balance in his or her Phantom Stock
Account as of the end of such Quarter.


                                       2



SECTION 5. DISTRIBUTIONS.

(a)  Generally.

     Subject to the following provisions of this Section 5, including without
     limitation paragraph 5(d)(iii), a Participant's benefits will be
     distributed in a lump sum within 30 days after the Quarter in which the
     Participant's Termination Date occurs.

(b)  Distributions to Specified Employees.

     If a Participant is a Specified Employee at the Participant's Termination
     Date, and distribution is made to the Participant by reason of the
     occurrence of such Termination Date, distributions of benefits under the
     Plan may not be made before the date that is six months after the
     Participant's Termination Date or, if earlier, the date of death of the
     Participant. At the end of the six-month period described in the preceding
     sentence, amounts that could not be paid by reason of the limitation in
     this Section (b) shall be paid on the first day of the seventh month
     following the Termination Date.

(c)  Distributions Upon Occurrence of Unforeseeable Emergency.

     A Participant may request the Administrator to allow withdrawal from the
     Participant's Accounts in the event of an Unforeseeable Emergency.
     Distributions because of an Unforeseeable Emergency shall be limited to the
     amount reasonably necessary to satisfy the emergency need (which may
     include amounts necessary to pay any federal, state, local, or foreign
     income taxes or penalties reasonably anticipated to result from the
     distribution). However, in making the determination of amounts reasonably
     necessary to satisfy the emergency need, the Administrator is not required
     to take into account any additional compensation that due to the
     Unforeseeable Emergency is available under another nonqualified deferred
     compensation plan but has not actually been paid, or that is available due
     to the Unforeseeable Emergency under another plan that would provide for
     deferred compensation except due to the application of the effective date
     provisions under Treas. Reg. Section 1.409A-6.

(d)  General Distribution Rules.

     Distributions of amounts under the Plan are subject to the following:

     (i) Amount of Lump Sum Distributions. Distribution of a Participant's
     benefits under the Plan shall be in shares of the Company's common stock
     equal in amount to the number of units of phantom stock credited to the
     Participant's Phantom Stock Account as of the Valuation Date coincident
     with or immediately preceding the date on which the distribution is in fact
     made. If, after the Valuation Date used to determine the number of shares
     to be distributed, additional phantom units are credited to the
     Participant's Phantom Stock Account, shares of stock with respect to the
     additional phantom units shall be distributed as soon as practicable after
     being credited.


                                       3



     (ii) Deferrals During Year of Termination. For the avoidance of doubt, it
     is recited that phantom units with respect to any calendar year shall be
     allocated to the Participant's Accounts in accordance with the provisions
     of the Plan and shall be distributed in accordance with the terms of the
     Plan, regardless of whether the Participant's Termination Date occurs
     during that year.

     (iii) Permitted Date of Distribution. For purposes of Code section 409A, a
     distribution will be considered to be made under the Plan as of the date
     specified in the Plan if it is made no later than the end of the calendar
     year in which such date occurs or, if later, by the 15th day of the third
     calendar month following that specified date, provided that the Participant
     is not permitted, directly or indirectly, to designate the taxable year of
     the payment. The foregoing provisions of this paragraph (iii) are intended
     to conform the payments under the Plan to the requirements of Code section
     409A, and shall not be construed to permit delay by the Company of payment
     of amounts due earlier in accordance with the Plan.

     (iv) Fractional Shares. Cash shall be paid in lieu of any fractional share
     of Company stock that would otherwise be distributed with respect to the
     Phantom Stock Account.

     (v) Application of Section 5. Distributions from a Participant's Phantom
     Stock Account may only be made pursuant to the provisions of this Section
     5.

SECTION 6. PARTICIPANT'S RIGHTS UNSECURED

No fund is to be created to meet payment obligations under this Plan, and the
right of a Participant to receive any unpaid portion of any amounts credited to
the Participant's Phantom Stock Account shall be an unsecured claim against the
general assets of the Company.

SECTION 7. NON-ASSIGNABILITY.

The right of a Participant to receive any unpaid portion of any amounts credited
to his or her Phantom Stock Account shall not be assigned, transferred, pledged
or encumbered or be subject in any manner to alienation or anticipation, except
that a Participant may designate, on forms provided by the Company, a
beneficiary to receive benefits under the Plan in the event of such
Participant's death.

SECTION 8. ADMINISTRATION.

The "Administrator" of this Plan shall be the Senior Vice President, Human
Resources of the Company, who shall have authority to adopt rules and
regulations for carrying out the Plan and to interpret and implement the
provisions hereof.


                                       4



SECTION 9. AMENDMENT AND TERMINATION

This Plan may at any time be amended, modified or terminated by the Board. No
amendment, modification or termination shall, without the consent of a
Participant, adversely affect such Participant's rights with respect to amounts
credited to the Participant's Phantom Stock Account. No amendment, modification,
or termination shall be adopted or effective if it would result in accelerated
recognition of income or imposition of additional tax under Code section 409A
or, except as otherwise provided in the amendment, would cause amounts that were
not otherwise subject to Code section 409A to become subject to section 409A."

SECTION 10. EXECUTION AND ADOPTION.

The Plan as set forth herein is hereby adopted by the undersigned officer of the
Company, on ______________, 2007.

                                       GATX CORPORATION


                                       By:
                                          -------------------------------------
                                          Senior Vice President, Human Resources


                                       5

EX-10.32

                                                                   Exhibit 10.32

                                GATX CORPORATION
                     DIRECTORS' VOLUNTARY DEFERRED FEE PLAN
                              AMENDED AND RESTATED
                              AS OF JANUARY 1, 2005

SECTION 1. PURPOSE AND EFFECTIVE DATE.

The purpose of the Directors' Voluntary Deferred Fee Plan is to provide to
non-employee directors of GATX Corporation (the "Company") an opportunity to
receive that portion of their cash annual retainer and meeting attendance fees
on a deferred basis, and to provide investment alternatives with respect
thereto.

The Directors' Deferred Fee Plan was amended and restated effective July 1,
1998. The Directors' Deferred Fee Plan is further amended, restated, and
continued in the form set forth herein. The Plan (as so amended and restated) is
effective with respect to amounts that were first accrued and vested under the
Plan after December 31, 2004.

SECTION 2. DEFINITIONS.

Unless the context otherwise requires, the following words as used herein shall
have the following meanings:

(a)  AFFILIATE. The term "Affiliate" means any person with whom the Company is
     considered to be a single employer under section 414(b) of the Internal
     Revenue Code (the "Code") and any person with whom the Company would be
     considered a single employer under section 414(c) of the Code.

(b)  BOARD. The term "Board" means the Board of Directors of the Company.

(c)  CHANGE IN CONTROL EVENT. The term "Change in Control Event" shall have the
     meaning ascribed to it under Treas. Reg. Section 1.409A-3(i)(5).

(d)  DEFERRAL ELECTION. The term "Deferral Election" means the deferral election
     form attached hereto as Exhibit A (subject to such modification as the
     Administrator may make from time to time) that is filed with the
     Administrator or his or her delegate or filed in accordance with such
     procedure as may be specified by the Administrator from time to time,
     whereby a Participant may elect to defer the Director's Fees under the
     Plan. The Deferral Election shall indicate (i) the percentage of the
     Director's Fees to be deferred, and (ii) whether the amount so deferred
     shall be credited to a Deferred Fee Account and bear interest as provided
     in Section 5 or invested in units of phantom stock to be held in a Phantom
     Stock Account as provided in Section 6, or the extent to which the
     Director's Fees should be divided between the Deferred Fee Account and the
     Phantom Stock Account.



(e)  DEFERRED FEE. The term "Deferred Fee" means that part of the Director's
     Fees elected to be deferred hereunder.

(f)  DIRECTOR'S FEES. An individual's "Director's Fees" means the portion of the
     annual retainer and Board and committee meeting attendance fees paid to
     each director who is not an employee of the Company or the Affiliates,
     that, in the absence of deferral under this Plan, would be paid in cash.
     Director's Fees for any calendar year shall mean the Participant's fees
     payable by the Company with respect to services performed during that
     calendar year.

(g)  DISTRIBUTION ELECTION. The term "Distribution Election" means the form
     filed with the Administrator in accordance with such procedure as may be
     specified by the Administrator from time to time, whereby a Participant may
     elect the time at which amounts are to be paid under the Plan, subject to
     the provisions of Section 7.

(h)  PARTICIPANT. The term "Participant" means an eligible member of the Board
     who elects to participate in the Plan.

(i)  PERFORMANCE PERIOD. The term "Performance Period" means the period of
     service for which the right to the compensation arises.

(j)  QUARTER. The term "Quarter" means each of the three calendar month periods
     ending on the last day of January, April, July and October, respectively.

(k)  QUARTERLY DEFERRAL AMOUNT. The term "Quarterly Deferral Amount" means the
     amount of the Deferred Fee that would otherwise be payable to a
     participating director each Quarter during the term hereof.

(l)  RELATED PLANS. The term "Related Plans" means this Plan and any other
     account balance plan providing for the deferral of compensation at the
     election of the director that is required to be aggregated with this Plan
     pursuant to Treas. Reg. Section 1.409A-1(c)(2)(A).

(m)  SPECIFIED EMPLOYEE. The term "Specified Employee" shall be defined in
     accordance with Treas. Reg. Section 1.409A-1(i) and such rules as may be
     established by the Chief Executive Officer of the Company or his or her
     delegate from time to time.

(n)  TERMINATION DATE. An individual's "Termination Date" is the date on which
     the individual ceases to serve on the boards of directors of the Company
     and the Affiliates, subject to the following:

     (i) A director will be deemed to have ceased to serve on the board of
     directors of the Company and the Affiliates at the time the director and
     the Company reasonably anticipate that a level of bona fide services the
     individual would perform for the Company and the Affiliates as a director
     after such date would permanently decrease to


                                       2



     no more than 20% of the average level of bona fide services performed over
     the immediately preceding 36 month period (or the full period of service to
     the Company and the Affiliates if the individual has performed services as
     a director for the Company and the Affiliates for less than 36 months).

     (ii) The relationship as a director will be treated as continuing intact
     while the individual is on a bona fide leave of absence (determined in
     accordance with Treas. Reg. Section 1.409A-1(h)).

(o)  UNFORESEEABLE EMERGENCY. The term "Unforeseeable Emergency" shall mean a
     severe financial hardship to the Participant resulting from an illness or
     accident of the Participant, the Participant's spouse, the Participant's
     beneficiary, or the Participant's dependent; loss of the Participant's
     property due to casualty; or other similar extraordinary and unforeseeable
     circumstances arising as a result of events beyond the control of the
     Participant; provided, however, that the determination of Unforeseeable
     Emergency shall be made by the Administrator in a manner that is consistent
     with the meaning of Unforeseeable Emergency set forth in Treas. Reg.
     1.409A-3(i)(3).

SECTION 3. ELIGIBILITY.

Each member of the Board who is not an employee of the Company or the Affiliates
shall be eligible to participate in the Plan as of the first day he/she begins
service on the Board, by electing to defer the Board member's Directors Fees in
accordance with the following provisions of the Plan.

SECTION 4. ELECTION TO DEFER COMPENSATION.

(a)  In General. Subject to the following provisions of this Section 4, any
     election by an eligible individual to defer Director's Fees for services
     performed during any calendar year may be deferred under the Plan only if
     the Deferral Election is filed no later than the last day of the preceding
     calendar year.

(b)  Initial Participation. For the first calendar year in which an individual
     becomes eligible to participate in any of the Related Plans, the individual
     may make an initial Deferral Election to participate in this Plan, provided
     that such election must be made by filing a Deferral Election to defer the
     Director's Fees within 30 days after the date the individual initially
     becomes eligible to participate in any of the Related Plans, and may only
     apply with respect to the Director's Fees paid for services to be performed
     after the election is filed. If an election is filed after the beginning of
     a Performance Period, the election may apply to no more than an amount
     equal to the total amount of the Director's Fees for that Performance
     Period multiplied by the ratio of the number of days remaining in the
     Performance Period after the election over the total number of days in the
     Performance Period.


                                       3



(c)  Date of Filing. For purposes of this Section 4, a Deferral Election will be
     deemed to be filed on the later of the date it is filed with the
     Administrator or the date on which it becomes irrevocable. In the case of a
     Deferral Election described in paragraph (b) above that is with respect to
     the date an individual initially becomes eligible to participate in any of
     the Related Plans, and in the absence of provisions in the Deferral
     Election to the contrary, (i) if the Deferral Election is filed on or
     before such initial eligibility date, it will be considered to become
     irrevocable on the date such individual initially becomes eligible to
     participate in any of the Related Plans, and (ii) if the Deferral Election
     is filed after such initial eligibility date, it will be considered to
     become irrevocable on the 30th day after such initial eligibility date. An
     election shall be considered to be irrevocable for any year as of the date
     it can no longer be changed with respect to Director's Fees for that year.

(d)  Determination of Eligibility. For purposes of paragraph (b) above, an
     individual is deemed to be eligible to participate in any of the Related
     Plans at any time during which, under the respective plan's terms and
     without further amendment or action by the plan sponsor, the individual is
     eligible to accrue an amount of deferred compensation (as that term is used
     in Treas. Reg. Section 1.409A-2(a)(7)) under the plan other than earnings
     on amounts previously deferred, even if the individual has elected not to
     accrue (or has not elected to accrue) an amount of deferred compensation
     under that plan.

(e)  Withdrawal From Plan for Future Director's Fees. A Participant's Deferral
     Election for any calendar year shall remain in effect for each subsequent
     calendar year unless it is modified or revoked prior to the first day of
     calendar year as to which the modification or revocation applies. Such
     modification or revocation may be effected by submitting a completed notice
     of modification and withdrawal on the election form attached hereto as
     Exhibit A. Elections with respect to any calendar year shall be irrevocable
     during that calendar year.

SECTION 5. DEFERRED FEE ACCOUNT.

A Deferred Fee Account shall be maintained for each Participant electing to
receive interest on his or her Deferred Fees. Cash and interest thereon shall be
credited to a Participant's Deferred Fee Account as set forth in the following
paragraph.

Until the Valuation Date preceding payment of the Deferred Fees to a Participant
in accordance with Section 7, all amounts credited to a Participant's Deferred
Fee Account shall accrue interest at a rate equal to the twenty-year U.S.
Government bond rate in effect on the 15th day of January, April, July and
October of each year. Interest shall be compounded monthly, and shall be accrued
as of the last day of each calendar month (a "Valuation Date" with respect to
the Deferred Fee Account). As promptly as practicable following the close of
each Quarter, a statement will be sent to each Participant reflecting the
balance in his or her Deferred Fee Account as of the end of such Quarter.


                                       4



SECTION 6. PHANTOM STOCK ACCOUNT.

A Participant may elect to invest all or a portion of his or her Deferred Fees
in units of phantom stock. In such case, the Participant's Phantom Stock Account
will be credited each Quarter in which his or her election remains in effect
with the number of units of phantom stock equal to the result obtained by
dividing the portion of the Quarterly Deferral Amount to be invested in phantom
stock by the average of the high and low price of the Company's common stock on
the New York Stock Exchange on the last trading day of each Quarter. Until
distribution as provided herein, the Participant's Phantom Stock Account will be
credited with additional units of phantom stock representing dividends declared
on the Company's common stock based on the average of the high and low price of
such stock on the New York Stock Exchange on the date such dividend is paid. The
last day of each Quarter shall be a "Valuation Date" with respect to the Phantom
Stock Account.

The Phantom Stock Account will be merely a bookkeeping entry on the Company's
books so that no trust or escrow arrangement will be used and the Participant
will remain a general, unsecured creditor with respect to his or her account. As
promptly as practicable following the end of each Quarter, a statement will be
sent to each Participant reflecting the balance in his or her Phantom Stock
Account as of the end of such month.

SECTION 7. PAYMENT OF DEFERRED FEES.

(a)  Distributions Pursuant to Participant's Elections.

     (i) By filing a Distribution Election, a Participant may elect to receive
     distribution of benefits under the Plan in a lump sum in a specified
     calendar year, or in annual installments commencing in a specified calendar
     year, provided that such year of payment or commencement, respectively, may
     not be later than the second calendar year following the calendar year in
     which the Participant's Termination Date occurs, or (B) in a lump sum that
     is made, or annual installments that commence in the calendar year in which
     the Participant's Termination Date occurs, or in the first or second
     calendar year following the calendar year in which the Participant's
     Termination Date occurs. Subject to Section 7(e)(iv) and to the following
     sentence, distribution to be made in any year in accordance with this
     Section 7 shall be made on February 15 of that calendar year; provided that
     if the distribution is to be made in the calendar year in which the
     Participant's Termination Date occurs, distribution shall be made on the
     Participant's Termination Date. A Participant's Distribution Election may
     also specify that distribution of Plan benefits will be accelerated to the
     date of a Change in Control Event.

     (ii) A director may elect a different time of payment for benefits
     attributable to fees for each different calendar year of service, provided
     that the Distribution Election applicable to fees attributable to services
     for any calendar year must be filed no later than the date for filing the
     Deferral Election for such fees.


                                       5



     (iii) In the absence of filing a timely Distribution Election for fees
     deferred under the Plan for any calendar year, distribution of amounts
     attributable to that year shall be paid in a lump sum on the Participant's
     Termination Date.

(b)  Distributions Upon Death of Participant.

     If a Participant's Termination Date occurs on or after January 1, 2005 by
     reason of death, or if a Participant dies prior to having received all
     annual installments otherwise scheduled to be paid to him under this
     Section 7, the Participant's executor or administrator will receive a lump
     sum payment equal to the Account balances determined as of the Valuation
     Date next prior to the date of actual distribution. Subject to Section
     (e)(iv) below, such payment shall be made within 30 days after the date of
     death.

(c)  Distributions Upon Occurrence of Unforeseeable Emergency.

     A Participant may request the Administrator to allow withdrawal from the
     Participant's Accounts in the event of an Unforeseeable Emergency.
     Distributions because of an Unforeseeable Emergency shall be limited to the
     amount reasonably necessary to satisfy the emergency need (which may
     include amounts necessary to pay any federal, state, local, or foreign
     income taxes or penalties reasonably anticipated to result from the
     distribution). However, in making the determination of amounts reasonably
     necessary to satisfy the emergency need, the Administrator is not required
     to take into account any additional compensation that due to the
     Unforeseeable Emergency is available under another nonqualified deferred
     compensation plan but has not actually been paid, or that is available due
     to the Unforeseeable Emergency under another plan that would provide for
     deferred compensation except due to the application of the effective date
     provisions under Treas. Reg. Section 1.409A-6.

(d)  Distributions to Specified Employees.

     If a Participant is a Specified Employee at the Participant's Termination
     Date, and distribution is made to the Participant by reason of the
     occurrence of such Termination Date, distributions of benefits under the
     Plan may not be made before the date that is six months after the
     Participant's Termination Date or, if earlier, the date of death of the
     Participant. At the end of the six-month period described in the preceding
     sentence, amounts that could not be paid by reason of the limitation in
     this Section (d) shall be paid on the first day of the seventh month
     following the Termination Date.

(e)  General Distribution Rules.

     Distributions of amounts under the Plan are subject to the following:

     (i) Amount of Lump Sum Distributions. If a Participant's Account balances
     are to be distributed in a lump sum in accordance with this Section 7, the
     distribution shall be comprised of: (A) a cash payment equal to the amount
     credited to the Participant's


                                       6



     Deferred Fee Account as of the Valuation Date coincident with or
     immediately preceding the date on which the distribution is in fact made;
     plus (B) shares of the Company's common stock equal in amount to the number
     of units of phantom stock credited to the Participant's Phantom Stock
     Account of as of the Valuation Date coincident with or immediately
     preceding the date on which the distribution is in fact made. If, after the
     Valuation Date used to determine the amount of cash and number of shares to
     be distributed, additional amounts of cash or phantom units are credited to
     the Participant's Accounts, such amounts (including shares of stock with
     respect to the Phantom Stock Account) shall be distributed as soon as
     practicable after being credited.

     (ii) Amount of Annual Installment Distributions. If a Participant's Account
     balances are to be distributed in annual installments in accordance with
     this Section 7, each annual installment distribution shall be comprised of:
     (A) a cash payment equal to the amount credited to the Participant's
     Deferred Fee Account of as of the Valuation Date coincident with or
     immediately preceding the date on which the distribution is in fact made,
     multiplied by a fraction, the numerator of which shall be one and the
     denominator of which shall be the total number of annual installments
     elected minus the number of annual installments, if any, previously paid;
     plus (B) shares of the Company's common stock equal in amount to the number
     of units of phantom stock credited to the Participant's Phantom Stock
     Account of as of the Valuation Date coincident with or immediately
     preceding the date on which the distribution is in fact made, multiplied by
     a fraction, the numerator of which shall be one and the denominator of
     which shall be the total number of annual installments elected minus the
     number of annual installments, if any, previously distributed, provided
     that any fractional units of phantom stock shall be paid in cash. If, after
     the Valuation Date used to determine the amount of cash and number of
     shares to be distributed as the final installment, additional amounts of
     cash or phantom units are credited to the Participant's Accounts under the
     Plan, such amounts (including shares of stock with respect to the Phantom
     Stock Account) shall be distributed as soon as practicable after being
     credited.

     (iii) Deferrals During Year of Termination. For the avoidance of doubt, it
     is recited that Director's Fees that are deferred with respect to any
     calendar year shall be allocated to the Participant's Accounts in
     accordance with the provisions of the Plan and shall be distributed in
     accordance with the terms of the Plan, regardless of whether the
     Participant's Termination Date occurs during that year.

     (iv) Permitted Date of Distribution. For purposes of Code section 409A, a
     distribution will be considered to be made under the Plan as of the date
     specified in the Plan if it is made no later than the end of the calendar
     year in which such date occurs or, if later, by the 15th day of the third
     calendar month following that specified date, provided that the Participant
     is not permitted, directly or indirectly, to designate the taxable year of
     the payment. The foregoing provisions of this paragraph (iv) are intended
     to conform the payments under this Plan to the requirements of Code section
     409A, and shall not be construed to permit delay by the Company of payment
     of amounts due earlier in accordance with this Agreement.


                                       7



     (v) Fractional Shares. Cash shall be paid in lieu of any fractional share
     of Company stock that would otherwise be distributed with respect to the
     Phantom Stock Account.

     (vi) Application of Section 7. Distributions from a Participant's Deferred
     Fee Account and/or Phantom Stock Account may only be made pursuant to the
     provisions of this Section 7.

SECTION 8. PARTICIPANT'S RIGHTS UNSECURED.

No fund is to be created to meet payment obligations under this Plan, and the
right of a Participant to receive any unpaid portion of any amounts credited to
the Participant's Deferred Fee Account and/or Phantom Stock Account shall be an
unsecured claim against the general assets of the Company.

SECTION 9. NON-ASSIGNABILITY.

The right of a Participant to receive any unpaid portion of any amounts credited
to his or her Deferred Fee Account and/or Phantom Stock Account shall not be
assigned, transferred, pledged or encumbered or be subject in any manner to
alienation or anticipation, except that a Participant may designate, on forms
provided by the Company, a beneficiary to receive benefits under the Plan in the
event of such Participant's death.

SECTION 10. ADMINISTRATION.

The "Administrator" of this Plan shall be the Senior Vice President, Human
Resources of the Company, who shall have authority to adopt rules and
regulations for carrying out the Plan and to interpret and implement the
provisions hereof.

SECTION 11. AMENDMENT AND TERMINATION

This Plan may at any time be amended, modified or terminated by the Board. No
amendment, modification or termination shall, without the consent of a
Participant, adversely affect such Participant's rights with respect to amounts
credited to the Participant's Deferred Fee Account and/or Phantom Stock Account.
No such amendment, modification, or termination shall be adopted or effective if
it would result in accelerated recognition of income or imposition of additional
tax under Code section 409A or, except as otherwise provided in the amendment,
would cause amounts that were not otherwise subject to Code section 409A to
become subject to section 409A.


                                       8



SECTION 12. EXECUTION AND ADOPTION.

The amended and restated Plan as set forth herein is hereby adopted by the
undersigned officer of the Company, on ______________, 2007.

                                       GATX CORPORATION


                                       By:
                                          --------------------------------------
                                          Senior Vice President, Human Resources


                                        9

EX-12

Exhibit 12

GATX CORPORATION AND SUBSIDIARIES

COMPUTATION OF RATIOS OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS

	Year Ended December 31
	2007			2006			2005			2004			2003
	In millions, except ratios
Earnings available for fixed charges:
Income from continuing operations	$	185.8		$	151.4		$	106.0		$	155.7		$	69.4
Add (deduct):
Income taxes		72.8			76.1			66.6			66.6			19.9
Share of affiliates’ earnings, net of distributions received		(36.3	)		(39.9	)		(33.5	)		(23.3	)		(32.5	)
Interest on indebtedness and amortization of debt discount and expense		127.9			129.2			105.8			126.4			134.2
Interest portion of operating lease expense		89.1			101.0			114.8			112.6			120.5
Total earnings available for fixed charges	$	439.3		$	417.8		$	359.7		$	438.0		$	311.5
Preferred stock dividends	$	0.1		$	0.1		$	0.1		$	0.1		$	0.1
Ratio to convert preferred dividends to pre-tax basis		139	%		150	%		163	%		143	%		126	%
Preferred dividends on pre-tax basis		0.1			0.1			0.1			0.1			0.1
Fixed charges:
Interest on indebtedness and amortization of debt discount and expense	$	127.9		$	129.2		$	105.8		$	126.4		$	134.2
Capitalized interest		0.1			0.1			—			—			—
Interest portion of operating lease expense		89.1			101.0			114.8			112.6			120.5
Combined fixed charges and preferred stock dividends	$	217.2		$	230.4		$	220.7		$	239.1		$	254.8
Ratio of earnings to combined fixed charges and preferred stock dividends(a)		2.02	x		1.81	x		1.63	x		1.83	x		1.22	x

(a) The ratio of earnings to fixed charges represents the number of times “fixed charges” are covered by “earnings.” “Fixed charges” consist of interest on outstanding debt and amortization of debt discount and expense, adjusted for capitalized interest and the interest portion of operating lease expense. “Earnings” consist of income from continuing operations before income taxes and interest portion of fixed charges, less share of affiliates’ earnings, net of distributions received.

107

EX-21

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 would not constitute a significant subsidiary), and the state or country of incorporation of each:

	State or Country
Company Name	of Incorporation
GATX Rail Austria GmbH		Austria
GATX Spanish Holdings Corporation, S.L.		Spain
GATX Terminals Overseas Holding Corporation		Delaware
GATX Third Aircraft Corporation		Delaware

In addition to the above-named subsidiaries, GATX includes 57 domestic subsidiaries, 35 foreign subsidiaries, and interests in 19 domestic affiliates and 39 foreign affiliates.

108

EX-23

Exhibit 23

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statement (Form S-3 No. 333-145521) of GATX Corporation and in the related Prospectus; the Registration Statement (Form S-8 No. 333-116626) pertaining to the 2004 Equity Incentive Compensation Plan, the 1995 Long-Term Incentive Compensation Plan, and the 1985 Long-Term Incentive Compensation Plan; the Registration Statement (Form S-8 No. 333-145581) pertaining to the Salaried Employees Retirement Savings Plan; the Registration Statement (Form S-8 No. 33-41007) pertaining to the Salaried Employees Retirement Savings Plan; the Registration Statement (Form S-8 No. 2-92404) pertaining to the Salaried Employees Savings Plan; and the Registration Statement (Form S-8 No. 333-145583) pertaining to the Hourly Employees Retirement Savings Plan of GATX Corporation of our reports dated February 29, 2008, with respect to the consolidated financial statements of GATX Corporation and the effectiveness of internal control over financial reporting of GATX Corporation, included in this Annual Report (Form 10-K) for the year ended December 31, 2007.

/s/ Ernst & Young LLP

Chicago, Illinois

February 29, 2008

109

EX-24

                                                                      EXHIBIT 24
                                POWER OF ATTORNEY

      The undersigned director of GATX Corporation, a New York corporation, does
hereby constitute and appoint Robert C. Lyons, Deborah A. Golden and William M.
Muckian or any of them, attorneys and agents of the undersigned, with full power
and authority to sign in such director's name, and on behalf of GATX
Corporation, the 2007 Annual Report on Form 10-K under the Securities Exchange
Act of 1934, together with any amendments thereto, hereby ratifying and
confirming all that said attorneys and agents and each of them may do by virtue
hereof.

      IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal.

                                                    /s/  James M. Denny
                                                -------------------------------
                                                         James M. Denny
                                                            Director

Date: 2/28/08



                                POWER OF ATTORNEY

      The undersigned director of GATX Corporation, a New York corporation, does
hereby constitute and appoint Robert C. Lyons, Deborah A. Golden and William M.
Muckian or any of them, attorneys and agents of the undersigned, with full power
and authority to sign in such director's name, and on behalf of GATX
Corporation, the 2007 Annual Report on Form 10-K under the Securities Exchange
Act of 1934, together with any amendments thereto, hereby ratifying and
confirming all that said attorneys and agents and each of them may do by virtue
hereof.

      IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal.

                                                   /s/  Richard Fairbanks
                                                --------------------------------
                                                        Richard Fairbanks
                                                           Director

Date: 2/27/08



                                POWER OF ATTORNEY

      The undersigned director of GATX Corporation, a New York corporation, does
hereby constitute and appoint Robert C. Lyons, Deborah A. Golden and William M.
Muckian or any of them, attorneys and agents of the undersigned, with full power
and authority to sign in such director's name, and on behalf of GATX
Corporation, the 2007 Annual Report on Form 10-K under the Securities Exchange
Act of 1934, together with any amendments thereto, hereby ratifying and
confirming all that said attorneys and agents and each of them may do by virtue
hereof.

      IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal.

                                                   /s/  Deborah M. Fretz
                                                --------------------------------
                                                        Deborah M. Fretz
                                                           Director

Date: 2/28/08



                               POWER OF ATTORNEY

      The undersigned director of GATX Corporation, a New York corporation, does
hereby constitute and appoint Robert C. Lyons, Deborah A. Golden and William M.
Muckian or any of them, attorneys and agents of the undersigned, with full power
and authority to sign in such director's name, and on behalf of GATX
Corporation, the 2007 Annual Report on Form 10-K under the Securities Exchange
Act of 1934, together with any amendments thereto, hereby ratifying and
confirming all that said attorneys and agents and each of them may do by virtue
hereof.

      IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal.

                                                   /s/  Ernst A. Haberli
                                                --------------------------------
                                                        Ernst A. Haberli
                                                           Director

Date: 2/19/08



                                POWER OF ATTORNEY

      The undersigned director of GATX Corporation, a New York corporation, does
hereby constitute and appoint Robert C. Lyons, Deborah A. Golden and William M.
Muckian or any of them, attorneys and agents of the undersigned, with full power
and authority to sign in such director's name, and on behalf of GATX
Corporation, the 2007 Annual Report on Form 10-K under the Securities Exchange
Act of 1934, together with any amendments thereto, hereby ratifying and
confirming all that said attorneys and agents and each of them may do by virtue
hereof.

      IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal.

                                                   /s/  Mark G. McGrath
                                                --------------------------------
                                                        Mark G. McGrath
                                                           Director

Date: 2/20/08



                                POWER OF ATTORNEY

      The undersigned director of GATX Corporation, a New York corporation, does
hereby constitute and appoint Robert C. Lyons, Deborah A. Golden and William M.
Muckian or any of them, attorneys and agents of the undersigned, with full power
and authority to sign in such director's name, and on behalf of GATX
Corporation, the 2007 Annual Report on Form 10-K under the Securities Exchange
Act of 1934, together with any amendments thereto, hereby ratifying and
confirming all that said attorneys and agents and each of them may do by virtue
hereof.

      IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal.

                                                   /s/  Michael E. Murphy
                                                --------------------------------
                                                        Michael E. Murphy
                                                           Director

Date: 2/23/08



                                POWER OF ATTORNEY

      The undersigned director of GATX Corporation, a New York corporation, does
hereby constitute and appoint Robert C. Lyons, Deborah A. Golden and William M.
Muckian or any of them, attorneys and agents of the undersigned, with full power
and authority to sign in such director's name, and on behalf of GATX
Corporation, the 2007 Annual Report on Form 10-K under the Securities Exchange
Act of 1934, together with any amendments thereto, hereby ratifying and
confirming all that said attorneys and agents and each of them may do by virtue
hereof.

      IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal.

                                                   /s/  David S. Sutherland
                                                --------------------------------
                                                        David S. Sutherland
                                                           Director

Date: 2/20/08



                                POWER OF ATTORNEY

      The undersigned director of GATX Corporation, a New York corporation, does
hereby constitute and appoint Robert C. Lyons, Deborah A. Golden and William M.
Muckian or any of them, attorneys and agents of the undersigned, with full power
and authority to sign in such director's name, and on behalf of GATX
Corporation, the 2007 Annual Report on Form 10-K under the Securities Exchange
Act of 1934, together with any amendments thereto, hereby ratifying and
confirming all that said attorneys and agents and each of them may do by virtue
hereof.

      IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal.

                                                   /s/  Casey J. Sylla
                                                --------------------------------
                                                        Casey J. Sylla
                                                           Director

Date: 2/19/08

EX-31.1

Exhibit 31.1

Certification of Principal Executive Officer

I, Brian A. Kenney, certify that:

1. I have reviewed this Annual Report on Form 10-K of GATX Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/  Brian A. Kenney

Brian A. Kenney

Chairman, President and Chief Executive Officer

February 29, 2008

110

EX-31.2

Exhibit 31.2

Certification of Principal Financial Officer

I, Robert C. Lyons, certify that:

1. I have reviewed this Annual Report on Form 10-K of GATX Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/  Robert C. Lyons

Robert C. Lyons

Senior Vice President and Chief Financial Officer

February 29, 2008

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EX-32

Exhibit 32

GATX CORPORATION AND SUBSIDIARIES

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of GATX Corporation (the “Company”) on Form 10-K for the period ending December 31, 2007, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/  Brian A. Kenney
Brian A. Kenney
Chairman, President and
Chief Executive Officer /s/  Robert C. Lyons
Robert C. Lyons
Senior Vice President and
Chief Financial Officer

February 29, 2008

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by GATX Corporation for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 has been provided to GATX Corporation and will be retained by GATX Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

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