10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2008

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.)

222 West Adams Street
Chicago, Illinois 60606-5314
(Address of principal executive offices, including zip code)

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

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 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	Smaller reporting company o
		(Do not check if a smaller reporting company)

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

As of June 30, 2008, 48.7 million common shares were outstanding.

GATX CORPORATION
FORM 10-Q
QUARTERLY REPORT FOR THE PERIOD ENDED JUNE 30, 2008

INDEX

Item No.	Page No.
Part I – FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets (Unaudited)		1
Consolidated Statements of Income (Unaudited)		2
Consolidated Statements of Cash Flows (Unaudited)		3
Notes to the Consolidated Financial Statements (Unaudited)		4
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward Looking Statements		13
Business Overview		13
Discussion of Operating Results		14
Segment Operations		14
Cash Flow and Liquidity		22
Critical Accounting Policies		24
Non-GAAP Financial Information		24
Item 3. Quantitative and Qualitative Disclosures about Market Risk		25
Item 4. Controls and Procedures		25
Part II – OTHER INFORMATION
Item 1. Legal Proceedings		25
Item 1A. Risk Factors		25
Item 6. Exhibits		26
SIGNATURE		27
EXHIBIT INDEX		28
EX-3.2
EX-31.A
EX-31.B
EX-32

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

GATX CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In Millions)

	June 30			December 31
	2008			2007
Assets
Cash and Cash Equivalents	$	68.9		$	104.4
Restricted Cash		39.3			44.7
Receivables
Rent and other receivables		117.0			91.1
Finance leases		326.9			334.6
Loans		6.6			8.8
Less: allowance for possible losses		(11.2	)		(11.0	)
		439.3			423.5
Operating Assets and Facilities
Rail		5,007.5			4,908.5
Specialty		216.3			209.7
ASC		373.4			365.6
Less: allowance for depreciation		(2,020.6	)		(1,974.4	)
		3,576.6			3,509.4
Investments in Affiliated Companies		386.6			317.8
Goodwill		109.5			104.4
Other Assets		268.4			221.4
Total Assets	$	4,888.6		$	4,725.6
Liabilities and Shareholders’ Equity
Accounts Payable and Accrued Expenses	$	136.6		$	119.6
Debt
Commercial paper and borrowings under bank credit facilities		16.6			247.3
Recourse		2,326.1			2,039.9
Capital lease obligations		68.0			72.5
		2,410.7			2,359.7
Deferred Income Taxes		749.7			722.8
Other Liabilities		331.4			374.0
Total Liabilities		3,628.4			3,576.1
Shareholders’ Equity
Preferred stock ($1.00 par value, 5,000,000 shares authorized, 17,517 and 18,216 shares of Series A and B $2.50 Cumulative Convertible Preferred Stock issued and outstanding as of June 30, 2008 and December 31, 2007, respectively, aggregate liquidation preference of $1.1 million)		*			*
Common stock ($0.625 par value, 120,000,000 authorized, 64,986,619 and 62,171,716 shares issued and 48,660,933 and 47,899,897 shares outstanding as of June 30, 2008 and December 31, 2007, respectively)		40.5			38.7
Additional paid in capital		589.5			514.3
Retained earnings		1,006.0			939.0
Accumulated other comprehensive income		129.4			86.2
Treasury shares, at cost (16,325,686 shares at June 30, 2008 and 14,271,819 at December 31, 2007)		(505.2	)		(428.7	)
Total Shareholders’ Equity		1,260.2			1,149.5
Total Liabilities and Shareholders’ Equity	$	4,888.6		$	4,725.6

* Less than $0.1 million.

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

1

GATX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In Millions, Except Per Share Data)

	Three Months Ended					Six Months Ended
	June 30					June 30
	2008		2007			2008		2007
Gross Income
Lease income	$	235.0	$	220.7		$	469.8	$	438.6
Marine operating revenue		88.2		72.8			102.3		80.4
Asset remarketing income		9.2		17.7			30.1		27.7
Other income		26.8		17.3			46.2		33.2
Revenues		359.2		328.5			648.4		579.9
Share of affiliates’ earnings		19.1		18.8			41.0		42.3
Total Gross Income		378.3		347.3			689.4		622.2
Ownership Costs
Depreciation		53.9		47.8			102.1		90.0
Interest expense, net		35.0		30.7			70.5		60.6
Operating lease expense		37.7		39.1			75.7		78.2
Total Ownership Costs		126.6		117.6			248.3		228.8
Other Costs and Expenses
Maintenance expense		67.7		58.3			128.5		110.9
Marine operating expense		68.4		52.7			79.9		58.6
Selling, general and administrative		42.5		39.2			81.0		77.2
Other		11.5		11.7			22.7		20.0
Total Other Costs and Expenses		190.1		161.9			312.1		266.7
Income from Continuing Operations before Income Taxes		61.6		67.8			129.0		126.7
Income Taxes		20.7		24.3			35.9		46.2
Income from Continuing Operations		40.9		43.5			93.1		80.5
Loss from Discontinued Operations, net of taxes		—		(1.1	)		—		(3.2	)
Net Income	$	40.9	$	42.4		$	93.1	$	77.3
Per Share Data
Basic:
Income from continuing operations	$	0.88	$	0.86		$	1.99	$	1.56
Loss from discontinued operations		—		(0.03	)		—		(0.06	)
Total	$	0.88	$	0.83		$	1.99	$	1.50
Average number of common shares		46.4		50.6			46.7		51.4
Diluted:
Income from continuing operations	$	0.82	$	0.79		$	1.85	$	1.44
Loss from discontinued operations		—		(0.02	)		—		(0.06	)
Total	$	0.82	$	0.77		$	1.85	$	1.38
Average number of common shares and common share equivalents		50.6		55.9			51.2		57.5
Dividends declared per common share	$	0.27	$	0.24		$	0.54	$	0.48

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

2

GATX CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(In Millions)

	Six Months Ended
	June 30
	2008			2007
Operating Activities
Net income	$	93.1		$	77.3
Add: Loss from discontinued operations		—			3.2
Income from continuing operations		93.1			80.5
Adjustments to reconcile income from continuing operations to net cash provided by operating activities of continuing operations:
Gain on sales of assets and securities		(36.6	)		(22.2	)
Depreciation		107.3			94.9
Asset impairment charges		2.2			1.5
Deferred income taxes		22.5			44.6
Share of affiliates’ earnings, net of dividends		(12.3	)		(17.2	)
Income taxes payable		2.7			13.0
Operating lease payable		(28.4	)		(24.1	)
Other		(50.3	)		(12.5	)
Net cash provided by operating activities of continuing operations		100.2			158.5
Investing Activities
Additions to operating assets, net of nonrecourse financing for leveraged leases, and facilities		(155.5	)		(222.9	)
Loans extended		—			(7.0	)
Investments in affiliates		(55.3	)		—
Other		(5.8	)		(3.0	)
Portfolio investments and capital additions		(216.6	)		(232.9	)
Purchases of leased-in assets		(21.7	)		(6.8	)
Portfolio proceeds		85.0			136.5
Proceeds from sales of other assets		20.5			12.6
Net decrease in restricted cash		5.4			1.3
Net cash used in investing activities of continuing operations		(127.4	)		(89.3	)
Financing Activities
Proceeds from issuances of debt (original maturities longer than 90 days)		339.8			33.9
Repayments of debt (original maturities longer than 90 days)		(18.5	)		(175.2	)
Net decrease in debt with original maturities of 90 days or less		(230.2	)		(30.0	)
Payments on capital lease obligations		(4.6	)		(4.1	)
Employee exercises of stock options		7.0			21.3
Stock repurchases		(76.5	)		(192.0	)
Cash dividends		(25.4	)		(24.8	)
Net cash used in financing activities of continuing operations		(8.4	)		(370.9	)
Effect of Exchange Rate Changes on Cash and Cash Equivalents		0.1			0.3
Cash Flows of Discontinued Operations (see Note 14)
Net cash used in operating activities		—			(38.9	)
Net cash provided by investing activities		—			229.9
Net Decrease in Cash and Cash Equivalents during the period		(35.5	)		(110.4	)
Cash and Cash Equivalents at beginning of period		104.4			196.2
Cash and Cash Equivalents at end of period	$	68.9		$	85.8

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

3

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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”).

NOTE 2. Basis of Presentation

     The accompanying unaudited consolidated financial statements of GATX Corporation and its subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by these accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2008, are not necessarily indicative of the results that may be achieved for the entire year ending December 31, 2008. For further information, refer to the consolidated financial statements and footnotes for the year ended December 31, 2007, as set forth in the Company’s Annual Report on Form 10-K/A as filed with the Securities and Exchange Commission (“SEC”).

     GATX adopted Statement of Financial Accounting Standards No. 157, Fair Value Measurements (“SFAS No. 157”), effective January 1, 2008. SFAS No. 157 defines fair value, establishes a framework for measuring fair value and requires enhanced disclosures about fair value measurements. SFAS No. 157 defines fair value as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” The adoption of SFAS No. 157 had no effect on GATX’s consolidated financial statements. See Note 12 for a complete discussion of SFAS No. 157.

New Accounting Pronouncements

     In May 2008, the Financial Accounting Standards Board issued Staff Position No. APB 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)” (“FSP No. APB 14-1” or the “FSP”), which clarifies the accounting for convertible debt instruments that may be settled in cash (including partial cash settlement) upon conversion. The FSP requires issuers of applicable convertible debt instruments to account separately for the liability (debt) and equity (conversion option) components in a manner that reflects the issuer’s nonconvertible debt (unsecured debt) borrowing rate. The FSP requires bifurcation of a component of the convertible debt, classification of that component as equity, and then accretion of the resulting discount on the debt as additional interest expense over the expected term of the debt. The FSP requires retrospective application to all periods presented. The FSP is effective for GATX as of January 1, 2009, and early adoption is not permitted. The adoption of this FSP will affect the accounting for GATX’s current 5% convertible notes due 2023 and its previous 7.25% convertible notes that matured in February 2007. GATX is presently evaluating the impact that the application of this FSP will have to its consolidated financial position and results of its operations.

NOTE 3. 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.

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

	Three Months Ended				Six Months Ended
	June 30				June 30
	2008		2007		2008		2007
Revenues	$	175.3	$	170.6	$	334.6	$	321.0
Pre-tax income reported by affiliates		35.8		44.3		81.1		102.1

4

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

NOTE 4. Pension and Other Post-Retirement Benefits

     The components of pension and other post-retirement benefit costs for the three months ended June 30, 2008 and 2007, were as follows (in millions):

							2008 Retiree		2007 Retiree
	2008 Pension			2007 Pension			Health and		Health and
	Benefits			Benefits			Life		Life
Service cost	$	1.3		$	1.5		$	0.1	$	0.1
Interest cost		5.8			5.8			0.8		0.9
Expected return on plan assets		(8.0	)		(7.6	)		—		—
Amortization of:
Unrecognized prior service credit		(0.3	)		—			—		(0.1	)
Unrecognized net loss		0.4			1.1			0.1		0.2
Net costs	$	(0.8	)	$	0.8		$	1.0	$	1.1

     The components of pension and other post-retirement benefit costs for the six months ended June 30, 2008 and 2007, were as follows (in millions):

							2008 Retiree		2007 Retiree
	2008 Pension			2007 Pension			Health and		Health and
	Benefits			Benefits			Life		Life
Service cost	$	2.5		$	3.0		$	0.1	$	0.1
Interest cost		11.7			11.6			1.6		1.8
Expected return on plan assets		(16.0	)		(15.2	)		—		—
Amortization of:
Unrecognized prior service credit		(0.5	)		—			—		(0.1	)
Unrecognized net loss		0.7			2.2			0.2		0.4
Net costs	$	(1.6	)	$	1.6		$	1.9	$	2.2

     The amounts reported herein are based on estimated annual costs. Actual annual costs for the year ending December 31, 2008, may differ from these estimates.

NOTE 5. 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 sets forth GATX’s commercial commitments as of (in millions):

	June 30		December 31
	2008		2007
Affiliate guarantees	$	20.7	$	20.7
Asset residual value guarantees		79.9		121.7
Lease payment guarantees		64.5		68.8
Other		77.8		77.8
Total guarantees		242.9		289.0
Standby letters of credit and bonds		17.7		17.7
	$	260.6	$	306.7

     At June 30, 2008, the recorded value of GATX’s guarantees was a liability of $9.7 million. The expirations of these guarantees range from 2008 to 2019.

     Affiliate guarantees generally involve guaranteeing repayment of the financing utilized by an affiliate to acquire or lease-

5

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

in assets, which are subsequently leased-out to third parties, 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 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 recognized when realized). Any liability resulting from GATX’s performance pursuant to these guarantees will be reduced by the value realized from the underlying asset or group of assets. Historically, gains associated with the settlement of residual value guarantees have exceeded any losses and were recorded in asset remarketing income in the consolidated statements of income. 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. (“GFAC”), a joint venture partially owned by GATX, in connection with an aircraft purchase contract entered into by GFAC and Airbus in 2001. GATX’s indemnification obligation is capped at $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.

     GATX and its subsidiaries are also parties to standing letters of credit and bonds primarily related to workers’ compensation and general liability insurance coverage. No material claims have been made against these obligations. At June 30, 2008, GATX does not expect any material losses to result from these off balance sheet instruments because performance is not anticipated to be required.

NOTE 6. Variable Interest Entities

     GATX has ownership interests in certain investments that are considered Variable Interest Entities (“VIEs”) in accordance with FASB Interpretation No. 46(R), Consolidation of Variable Interest Entities (“FIN 46(R)”). GATX does not believe it is the primary beneficiary with respect to any of its VIEs and therefore does not consolidate them. 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 2002. GATX continues to evaluate new investments for the application of FIN 46(R) and regularly reviews all existing VIEs in connection with any reconsideration events (as defined in FIN 46(R)) that may result in GATX becoming the primary beneficiary. As of June 30, 2008, GATX’s maximum exposure to loss with respect to its VIEs was approximately $123.5 million, of which $103.6 million was the aggregate carrying value of these investments recorded on its balance sheet. 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 7. Comprehensive Income

     The components of comprehensive income were as follows (in millions):

	Three Months Ended				Six Months Ended
	June 30				June 30
	2008		2007		2008			2007
Net income	$	40.9	$	42.4	$	93.1		$	77.3
Other comprehensive income, net of tax:
Foreign currency translation gain		19.8		18.7		52.2			25.9
Unrealized gain (loss) on securities		0.2		—		0.5			(3.7	)
Unrealized gain (loss) on derivative instruments		1.2		2.7		(9.7	)		9.2
Post retirement benefit plans		0.1		1.6		0.2			1.6
Comprehensive Income	$	62.2	$	65.4	$	136.3		$	110.3

6

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

NOTE 8. Share-Based Compensation

     In the first six months of 2008, GATX granted 307,100 stock appreciation rights (“SAR”), 64,458 restricted stock units and 72,550 performance shares. For the three and six months ended June 30, 2008, total share-based compensation expense was $2.3 million ($1.4 million after tax) and $4.6 million ($2.8 million after tax), respectively. For the three and six months ended June 30, 2007, total share-based compensation expense was $3.2 million ($2.0 million after tax) and $5.2 million ($3.2 million after tax), respectively.

     The weighted average estimated fair value of GATX’s 2008 SAR awards and underlying assumptions thereof are noted in the table below. The vesting period for the 2008 SAR grant is three years, with 1/3 vesting after each year.

	2008
Weighted average fair value of SAR award	$	12.11
Annual dividend	$	1.08
Expected life of the option, in years		4.4
Risk free interest rate		2.39	%
Dividend yield		3.0	%
Expected stock price volatility		29.86	%

NOTE 9. Income Taxes

     GATX’s effective tax rate for continuing operations was 28% for the six months ended June 30, 2008, compared to 36% for the six months ended June 30, 2007. In 2008, the statute of limitations on a state income tax position taken in a prior period expired resulting in the recognition of previously unrecognized tax benefits of $6.8 million. Additionally, lower statutory rates in a number of foreign jurisdictions have benefited GATX’s overall effective tax rate.

     As of June 30, 2008, GATX’s gross liability for unrecognized tax benefits totaled $50.4 million, which, if fully recognized, would decrease income tax expense by $33.8 million ($31.7 million net of federal tax).

NOTE 10. Capital Structure and Earnings Per Share

     In the first six months of 2008, holders of GATX’s 5.0% senior unsecured notes (the “2003 Notes”) converted $64.7 million of notes, of which $0.7 million was settled in cash and $64.0 million was settled with shares. A total of 2.6 million common shares were issued as a result and no gain or loss was recognized. Additionally, upon conversion, holders of the 2003 Notes forfeited accrued but unpaid interest as of the conversion date. In 2008, forfeited interest due to conversions was $1.0 million, net of tax effects, which was recorded as an adjustment to additional paid in capital. At June 30, 2008, $42.1 million of 2003 Notes were outstanding and convertible at a conversion price of $24.81 per share. The 2003 Notes also 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 2003 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 2003 Notes. GATX may avoid paying this contingent interest by calling the 2003 Notes prior to the record date for the contingent interest period.

     On January 23, 2008, the Company’s Board of Directors authorized a $200 million common stock repurchase program. As of June 30, 2008, 2.1 million shares have been repurchased for $76.5 million, all of which occurred in the first quarter. No repurchases were made in the second quarter as the Company has opted to retain this capital to support investment opportunities that may become available. The repurchased shares were recorded as treasury stock under the cost method.

     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 period. Shares issued or reacquired during the period, if applicable, were weighted for the portion of the period that they were outstanding. Diluted earnings per share give effect to the impact of potentially dilutive securities, including convertible preferred stock, stock options, SARs, restricted stock and convertible debt.

7

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

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

	Three Months Ended					Six Months Ended
	June 30					June 30
	2008		2007			2008		2007
Numerator:
Income from continuing operations	$	40.9	$	43.5		$	93.1	$	80.5
Loss from discontinued operations		—		(1.1	)		—		(3.2	)
Less: Dividends paid and accrued on preferred stock		*		*			*		*
Numerator for basic earnings per share — income available to common shareholders	$	40.9	$	42.4		$	93.1	$	77.3
Effect of dilutive securities:
Add: Dividends paid and accrued on preferred stock		*		*			*		*
After-tax interest expense on convertible securities		0.7		0.9			1.6		2.4
Numerator for diluted earnings per share — income available to common shareholders	$	41.6	$	43.3		$	94.7	$	79.7
Denominator:
Denominator for basic earnings per share — weighted average shares		46.4		50.6			46.7		51.4
Effect of dilutive securities:
Equity compensation plans		0.4		0.6			0.4		0.7
Convertible preferred stock		0.1		0.1			0.1		0.1
Convertible securities		3.7		4.6			4.0		5.3
Denominator for diluted earnings per share — adjusted weighted average and assumed conversion		50.6		55.9			51.2		57.5
Basic earnings per share:
Income from continuing operations	$	0.88	$	0.86		$	1.99	$	1.56
Loss from discontinued operations		—		(0.03	)		—		(0.06	)
Total basic earnings per share	$	0.88	$	0.83		$	1.99	$	1.50
Diluted earnings per share:
Income from continuing operations	$	0.82	$	0.79		$	1.85	$	1.44
Loss from discontinued operations		—		(0.02	)		—		(0.06	)
Total diluted earnings per share	$	0.82	$	0.77		$	1.85	$	1.38

* Less than $0.1 million.

NOTE 11. 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. Rail provides railcars primarily 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 provides 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.

     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.

8

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

     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.

     The following tables present certain segment data for the three and six months ended June 30, 2008 and 2007 (in millions):

	Rail			Specialty		ASC		Other			Total
Three Months Ended June 30, 2008
Profitability
Revenues	$	248.1		$	21.7	$	89.2	$	0.2		$	359.2
Share of affiliates’ earnings		(0.6	)		19.7		—		—			19.1
Total gross income		247.5			41.4		89.2		0.2			378.3
Total ownership costs		109.3			8.4		6.8		2.1			126.6
Total operating costs		67.9			2.5		77.2		—			147.6
Segment profit		70.3			30.5		5.2		(1.9	)		104.1
SG&A												42.5
Income from continuing operations before income taxes												61.6
Capital Expenditures
Portfolio investments and capital additions		73.5			62.9		4.5		4.3			145.2
Selected Balance Sheet Data at June 30, 2008
Investments in affiliated companies		148.9			237.7		—		—			386.6
Identifiable assets		3,869.6			560.6		322.0		136.4			4,888.6
Three Months Ended June 30, 2007
Profitability
Revenues	$	232.7		$	21.8	$	73.8	$	0.2		$	328.5
Share of affiliates’ earnings		3.3			15.5		—		—			18.8
Total gross income		236.0			37.3		73.8		0.2			347.3
Total ownership costs		106.8			7.8		6.7		(3.7	)		117.6
Total operating costs		61.1			3.1		58.6		(0.1	)		122.7
Segment profit		68.1			26.4		8.5		4.0			107.0
SG&A												39.2
Income from continuing operations before income taxes												67.8
Capital Expenditures
Portfolio investments and capital additions		80.3			33.8		2.8		0.8			117.7
Selected Balance Sheet Data at December 31, 2007
Investments in affiliated companies		135.4			182.4		—		—			317.8
Identifiable assets		3,768.2			515.6		292.0		149.8			4,725.6

9

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

	Rail		Specialty		ASC		Other			Total
Six Months Ended June 30, 2008
Profitability
Revenues	$	496.1	$	47.5	$	104.4	$	0.4		$	648.4
Share of affiliates’ earnings		4.9		36.1		—		—			41.0
Total gross income		501.0		83.6		104.4		0.4			689.4
Total ownership costs		221.2		17.0		9.2		0.9			248.3
Total operating costs		135.7		6.1		89.3		—			231.1
Segment profit		144.1		60.5		5.9		(0.5	)		210.0
SG&A											81.0
Income from continuing operations before income taxes											129.0
Capital Expenditures
Portfolio investments and capital additions		128.0		69.6		7.8		11.2			216.6
Selected Balance Sheet Data at June 30, 2008
Investments in affiliated companies		148.9		237.7		—		—			386.6
Identifiable assets		3,869.6		560.6		322.0		136.4			4,888.6
Six Months Ended June 30, 2007
Profitability
Revenues	$	461.1	$	36.1	$	82.5	$	0.2		$	579.9
Share of affiliates’ earnings		8.7		33.6		—		—			42.3
Total gross income		469.8		69.7		82.5		0.2			622.2
Total ownership costs		213.1		15.1		9.2		(8.6	)		228.8
Total operating costs		121.4		3.6		64.6		(0.1	)		189.5
Segment profit		135.3		51.0		8.7		8.9			203.9
SG&A											77.2
Income from continuing operations before income taxes											126.7
Capital Expenditures
Portfolio investments and capital additions		184.8		45.8		4.4		(1.7	)		232.9
Selected Balance Sheet Data at December 31, 2007
Investments in affiliated companies		135.4		182.4		—		—			317.8
Identifiable assets		3,768.2		515.6		292.0		149.8			4,725.6

NOTE 12. Fair Value Disclosure

     The Company adopted SFAS No. 157, Fair Value Measurements, on January 1, 2008. SFAS No. 157 applies to all financial instruments being measured and reported on a fair value basis.

     SFAS No. 157 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. SFAS No. 157 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

     Level 1 — Quoted prices that are available in active markets for identical assets or liabilities. The types of financial instruments included in Level 1 are marketable equity available for sale securities that are traded in an active exchange market.

     Level 2 — Pricing inputs other than quoted prices in active markets, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Instruments included in this category are warrants and derivative contracts whose value is determined using a pricing model with inputs that are observable in the market or can be derived principally from or corroborated by observable market data.

     Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 includes assets and liabilities whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant

10

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

management judgment or estimation. At June 30, 2008, GATX had no Level 3 financial instruments.

     At June 30, 2008, the fair values of GATX’s financial instruments, which are remeasured on a recurring basis, are summarized below (in millions):

	Total		Level 1		Level 2		Level 3
Assets
Derivatives, including warrants	$	9.9		—	$	9.9		—
Available for sale equity securities	$	5.3	$	5.3		—		—
Liabilities
Derivatives	$	25.4		—	$	25.4		—

NOTE 13. Legal Proceedings and Other Contingencies

     Various legal actions, claims, assessments and other contingencies arising in the ordinary course of business 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. For a discussion of these matters, please refer to Note 18 Legal Proceedings and Other Contingencies reported in the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2007. Except as noted below, there have been no material changes or developments in these matters.

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 (the “Agreement”) to purchase shares of Kolsped S.A. (“Kolsped”) which was an indirect subsidiary of PKP. The allegedly breached condition required DEC to obtain a release of Kolsped’s ultimate parent company, PKP, from its guarantee of Kolsped’s 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 (the “Kolsped Note”). In May 1999, the then current holder of the Kolsped Note, a bank (“Bank”), sued PKP under its guarantee. PKP lost the DEC Note and therefore did not use it to satisfy the guarantee, and the Bank ultimately secured a judgment against PKP in 2002. PKP also failed to notify DEC of the Bank’s lawsuit while the lawsuit was pending.

     After exhausting its appeals of the judgment entered against it, PKP filed suit against DEC in December 2005, 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. DEC has filed an answer to 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 first day of trial was held on March 5, 2008, and the second day is scheduled for September 16, 2008.

     PKP claims damages in the amount of PLN 88,239,219, which consists of the principal amount, interest and costs allegedly paid by it to the Bank. PKP is also claiming an unquantified amount of statutory interest on any amounts that the court may eventually award to PKP. Statutory interest would be assessed only if the court awards damages to PKP, in which case interest would be assessed on the amount of the award from the date of filing of the claim in December 2005, to the date of the award. Based on current exchange rates, the potential exposure to DEC in the event of an adverse judgment, including the damages sought by PKP and any statutory interest that may be assessed thereon, is estimated to be approximately $52 million.

     GATX Rail Poland intends to vigorously defend this lawsuit. However, the Company has recorded an accrual for $11.8 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.

11

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

NOTE 14. Discontinued Operations

     Discontinued operations consist of the Company’s former Air (“Air”) segment. On January 17, 2007, GATX completed the sale of the remainder of Air for gross proceeds of $227.1 million. Results of discontinued operations reflect directly attributable revenues, ownership, operating and SG&A expenses and income taxes.

     The following table summarizes certain operating data for discontinued operations (in millions):

	Three Months Ended			Six Months Ended
	June 30			June 30
	2007			2007
Revenues	$	—		$	0.5
Loss before income taxes		(1.8	)		(5.3	)
Loss from operations, net of taxes		(0.4	)		(1.0	)
Loss on disposal of segment, net of taxes		(0.7	)		(2.2	)
Net loss from discontinued operations	$	(1.1	)	$	(3.2	)

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

	Six Months Ended
	June 30
	2007
Operating Activities
Net cash used in operating activities	$	(38.9	)
Investing Activities
Proceeds from disposal of segment		229.9
Cash provided by discontinued operations, net	$	191.0

12

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements

     This document contains statements that may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and are subject to the safe harbor provisions of those sections and the Private Securities Litigation Reform Act of 1995. Some of these statements may be identified by words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “predict,” “project” or other words and terms of similar meaning. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, including those described in GATX’s Annual Report on Form 10-K and other filings with the SEC, and that actual results or developments may differ materially from those in the forward-looking statements. Specific factors that might cause actual results to differ from expectations include, but are not limited to, general economic, market, regulatory and political conditions in the rail, marine, and industrial equipment markets and other industries served by GATX and its customers; lease rates, utilization levels and operating costs in GATX’s primary asset segments; conditions in the capital markets; changes in GATX’s credit ratings; regulatory rulings that may impact the economic value and operating costs of assets; competitive factors in GATX’s primary markets including lease pricing and asset availability; changes in loss provision levels within GATX’s portfolio; impaired asset charges that may result from changing market conditions or portfolio management decisions implemented by GATX; the outcome of pending or threatened litigation; and other factors. Given these risks and uncertainties, readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s analysis, judgment, belief or expectation only as of the date hereof. GATX has based these forward-looking statements on information currently available and disclaims any intention or obligation to update or revise these forward-looking statements to reflect subsequent events or circumstances.

Business Overview

     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”).

     Operating results for the six months ended June 30, 2008, are not necessarily indicative of the results that may be achieved for the entire year ending December 31, 2008. For further information, refer to GATX’s Annual Report on Form 10-K/A, as filed with the Securities and Exchange Commission (“SEC”), which contains the Company’s consolidated financial statements for the year ended December 31, 2007.

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

13

DISCUSSION OF OPERATING RESULTS

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

	Three Months Ended						Six Months Ended
	June 30						June 30
	2008			2007			2008			2007
Gross Income
Rail	$	247.5		$	236.0		$	501.0		$	469.8
Specialty		41.4			37.3			83.6			69.7
ASC		89.2			73.8			104.4			82.5
Total segment gross income		378.1			347.1			689.0			622.0
Other income		0.2			0.2			0.4			0.2
Consolidated Gross Income		378.3			347.3			689.4			622.2
Segment Profit
Rail		70.3			68.1			144.1			135.3
Specialty		30.5			26.4			60.5			51.0
ASC		5.2			8.5			5.9			8.7
Total Segment Profit		106.0			103.0			210.5			195.0
Less:
Selling, general and administrative expenses		42.5			39.2			81.0			77.2
Unallocated interest expense, net		2.2			(3.6	)		1.1			(8.4	)
Other, including eliminations		(0.3	)		(0.4	)		(0.6	)		(0.5	)
Income taxes		20.7			24.3			35.9			46.2
Income from continuing operations		40.9			43.5			93.1			80.5
Loss from discontinued operations, net of taxes		—			(1.1	)		—			(3.2	)
Consolidated Net Income	$	40.9		$	42.4		$	93.1		$	77.3
Basic earnings per share — income from continuing operations	$	0.88		$	0.86		$	1.99		$	1.56
Diluted earnings per share — income from continuing operations	$	0.82		$	0.79		$	1.85		$	1.44
Income from continuing operations, excluding tax benefits	$	40.9		$	43.5		$	86.3		$	80.5
Diluted earnings per share, excluding tax benefits	$	0.82		$	0.79		$	1.72		$	1.44

Return on Equity

     GATX’s return on equity (“ROE”) is based on income from continuing operations and is shown for the trailing twelve months ended June 30:

	2008			2007
ROE		16.9	%		13.7	%
ROE, excluding tax benefits		14.6	%		13.1	%

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 items are discussed below under 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

14

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 the current quarter, North American average lease renewal pricing on cars in the GATX Lease Price Index (LPI) increased 5.9% over the average expiring lease rates, compared to increases of 11.6% for the first quarter and 10.1% for the fourth quarter of 2007. Lease terms on renewals for LPI cars averaged 63 months in the second quarter of 2008, compared to 65 months for the first quarter and 68 months for the fourth quarter of 2007. Utilization of the North American fleet was 98.0%, substantially unchanged from the end of the first quarter and prior year. While utilization has remained stable, it should be noted that the active fleet size has declined slightly, reflecting higher than normal scrapping activity. The North American rail market continues to demonstrate some weakness, particularly impacting demand for railcars serving housing and automotive related industries. In Europe, fleet utilization increased slightly to 97.7% from 97.5% at the end of the first quarter, as demand remained strong across all railcar types. While rail market conditions in Europe remained strong during the quarter, there are some early indications that the economic conditions in some Western European countries may be softening.

     During the first six months of 2008, Rail’s portfolio investments were $128.0 million compared to $184.8 million for the comparable prior year period. Rail’s portfolio investments in 2008 have consisted primarily of new railcars acquired pursuant to existing commitments.

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

	Three Months Ended					Six Months Ended
	June 30					June 30
	2008			2007		2008		2007
Gross Income
Lease income	$	220.5		$	207.5	$	440.0	$	412.3
Asset remarketing income		2.2			9.7		13.2		19.5
Other income		25.4			15.5		42.9		29.3
Revenues		248.1			232.7		496.1		461.1
Affiliate earnings		(0.6	)		3.3		4.9		8.7
		247.5			236.0		501.0		469.8
Ownership Costs
Depreciation		45.6			40.7		89.8		80.3
Interest expense, net		26.3			27.7		56.4		56.0
Operating lease expense		37.4			38.4		75.0		76.8
		109.3			106.8		221.2		213.1
Operating Costs
Maintenance expense		61.8			52.4		122.0		104.7
Other operating expenses		6.1			8.7		13.7		16.7
		67.9			61.1		135.7		121.4
Segment profit	$	70.3		$	68.1	$	144.1	$	135.3

15

Rail’s Lease Income

     Components of Rail’s lease income for the three and six months ended June 30 are outlined below (in millions):

	Three Months Ended				Six Months Ended
	June 30				June 30
	2008		2007		2008		2007
North America	$	171.0	$	169.0	$	343.6	$	337.3
Europe		40.9		31.7		79.2		61.4
Locomotives		8.6		6.8		17.2		13.6
	$	220.5	$	207.5	$	440.0	$	412.3

Rail’s Fleet Data

     The following table summarizes fleet activity for Rail’s North American railcars as of June 30:

	2008			2007
Beginning of year balance		112,445			110,478
Cars added		1,596			2,379
Cars scrapped or sold		(3,846	)		(2,089	)
Ending balance		110,195			110,768
Utilization rate at quarter end		98.0	%		98.0	%

     The following table summarizes fleet activity for Rail’s European railcars as of June 30:

	2008			2007
Beginning of year balance		19,435			18,541
Cars added		118			642
Cars scrapped or sold		(46	)		(94	)
Ending balance		19,507			19,089
Utilization rate at quarter end		97.7	%		96.3	%

Comparison of the First Six Months of 2008 to the First Six Months of 2007

Segment Profit

     Rail’s segment profit rose 6.5% or $8.8 million over 2007. The increase primarily resulted from the effects of lease renewal rate increases, higher scrapping gains and the net effects of foreign exchange rates. Partially offsetting these increases were lower asset remarketing gains, higher fleet maintenance costs and mark-to-market losses on certain derivative hedging instruments recorded in earnings at Rail’s AAE Cargo affiliate.

Gross Income

     Gross income for the first six months of 2008 was $31.2 million higher than the prior year. In North America, lease income increased $6.3 million, primarily reflecting renewal lease rate increases experienced over the past 12 months. Additionally, locomotive lease income increased $3.6 million, primarily due to over 100 additional locomotives on lease. In Europe, lease income increased $17.8 million, of which $13.0 million was the result of strengthening foreign currencies and $4.8 million was largely due to an average of over 1,000 additional railcars on lease. Asset remarketing income decreased $6.3 million as the prior year included the sale of approximately 1,200 railcars and 40 locomotives. Other income increased $13.6 million, primarily due to higher scrapping gains in North America and a lease termination fee received in 2008. Compared to the prior year, over 900 more cars have been scrapped at record scrap steel prices, resulting in a $8.2 million increase in North American scrapping gains. Affiliate earnings decreased primarily as a result of a $3.8 million derivative valuation loss at AAE.

Ownership Costs

     Ownership costs increased $8.1 million, of which $6.1 million was the result of strengthening foreign currencies and the balance largely due to depreciation associated with investment volume of $430.8 million over the last 12 months. Interest costs were relatively unchanged as the effect of higher debt levels was largely offset by lower interest rates.

16

Operating Costs

     Maintenance expenses increased $17.3 million, primarily the result of higher car repair volumes, increased repairs performed by railroads and the effects of foreign exchange rates. In North America, maintenance costs were higher largely due to increased assignments, more cars undergoing scheduled regulatory maintenance, increased wheelset replacements performed by railroads and the effect of Canadian foreign exchange rates. In Europe, strengthening foreign currencies and increased railcars undergoing scheduled regulatory maintenance contributed to the increase. Other operating costs decreased $3.0 million, primarily due to the impact of non-functional currency asset and liability revaluations.

Comparison of the Second Quarter 2008 to the Second Quarter 2007

Segment Profit

     Rail’s segment profit rose 3.2% or $2.2 million over 2007. The increase primarily resulted from the effects of lease renewal rate increases, higher scrapping gains and the net effects of foreign exchange rates. Partially offsetting these increases were lower asset remarketing gains, higher fleet maintenance costs and mark-to-market losses on certain derivative hedging instruments recorded in earnings at Rail’s AAE Cargo affiliate.

Gross Income

     Gross income for the second quarter of 2008 was $11.5 million higher than the prior year. In North America, lease income increased $2.0 million, primarily reflecting renewal lease rate increases experienced over the past 12 months. Additionally, locomotive lease income increased $1.8 million primarily due to over 100 additional locomotives on lease. In Europe, lease income increased $9.2 million, of which $7.1 million was the result of strengthening foreign currencies and $2.1 million was due to an average of over 900 additional railcars on lease. Asset remarketing income decreased $7.5 million as the prior year included the sale of approximately 1,200 railcars and 40 locomotives. Other income increased $9.9 million, primarily due to higher scrapping gains in North America and a lease termination fee received in 2008. Compared to the prior year, over 400 more cars have been scrapped at record scrap steel prices, resulting in a $4.3 million increase in North American scrapping gains. Affiliate earnings decreased primarily as a result of a $3.8 million derivative valuation loss at AAE.

Ownership Costs

     Ownership costs increased $2.5 million, primarily due to depreciation associated with investment volume of $430.8 million over the last 12 months partially offset by a decrease in interest costs due to lower rates.

Operating Costs

     Maintenance expenses increased $9.4 million, primarily the result of higher car repair volumes, increased repairs performed by railroads and the effects of foreign exchange rates. In North America, maintenance costs were higher largely due to increased assignments, more cars undergoing scheduled regulatory maintenance, increased wheelset replacements performed by railroads and the effect of Canadian foreign exchange rates. In Europe, strengthening foreign currencies and increased railcars undergoing scheduled regulatory maintenance contributed to the increase. Other operating costs decreased $2.6 million, primarily due to the impact of non-functional currency asset and liability revaluations.

Railcar Regulatory Issues

     On April 1, 2008, the Federal Railroad Administration (“FRA”) issued a rulemaking proposal that would establish enhanced performance standards for pressurized tank cars that transport toxic-by-inhalation hazardous materials. Specifically, the proposed rules would enhance the performance standards for head and shell puncture resistance in the event of a rail accident. These standards would be phased in over a period of eight years following adoption of final rules. The proposed rules, which may be further revised, were subject to a public comment period, which expired on June 2, 2008. The FRA is reviewing the comments received and has stated that it intends to adopt final rules before the end of the year. GATX is actively working with trade associations and others to participate in the rulemaking process and evaluate the proposed rules. Because the proposed rules are not yet final, at this time GATX cannot reasonably predict the impact, if any, that final rules may have on GATX’s tank car fleet.

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Specialty

Segment Summary

     Specialty’s total asset base, including off balance sheet assets, was $565.5 million at June 30, 2008, compared to $521.4 million at December 31, 2007, and $489.3 million at June 30, 2007. During the quarter, Specialty invested $62.9 million, primarily consisting of an investment in a gas compression equipment leasing company and an additional investment in the Rolls Royce joint venture. High asset prices and capital market volatility continue to create investment uncertainty for Specialty’s industrial equipment customers. This challenging investment environment may continue for the remainder of 2008.

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

	Three Months Ended				Six Months Ended
	June 30				June 30
	2008		2007		2008		2007
Gross Income
Lease income	$	13.5	$	12.2	$	27.7	$	24.2
Asset remarketing income		7.0		8.0		16.9		8.2
Other income		1.2		1.6		2.9		3.7
Revenues		21.7		21.8		47.5		36.1
Affiliate earnings		19.7		15.5		36.1		33.6
		41.4		37.3		83.6		69.7
Ownership Costs
Depreciation		4.0		3.0		8.0		5.6
Interest expense, net		4.0		4.0		8.1		7.9
Operating lease expense		0.4		0.8		0.9		1.6
		8.4		7.8		17.0		15.1
Operating Costs		2.5		3.1		6.1		3.6
Segment profit	$	30.5	$	26.4	$	60.5	$	51.0

Specialty’s Portfolio Data

     The following table summarizes information on the owned and managed Specialty portfolio (in millions):

	June 30
	2008		2007
Net book value of owned assets (a)	$	565.5	$	489.3
Net book value of managed portfolio		315.9		448.6

(a) Includes off balance sheet assets

Comparison of the First Six Months of 2008 to the First Six Months of 2007

Segment Profit

     Specialty’s segment profit for the first six months of 2008 was $9.5 million higher than the prior year, primarily due to current year asset remarketing income and the income contribution from investments made during 2007. The increase was partially offset by fair value adjustments of warrants and higher marine vessel operating expenses.

Gross Income

     Gross income was $13.9 million higher than the prior year. Lease income increased $3.5 million, primarily due to income from investments in operating lease assets made in 2007. Asset remarketing income increased $8.7 million, primarily due to higher gains on the sale of assets in the current year; residual sharing fees were comparable between the two years. Affiliate

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earnings increased $2.5 million, primarily due to strong marine joint venture earnings, partially offset by the absence of earnings from a joint venture that was liquidated in the prior year.

Ownership Costs

     Ownership costs increased $1.9 million, primarily due to depreciation expense on new operating lease assets acquired in 2007, partially offset by the absence of expense on assets that were previously leased-in.

Operating Costs

     The increase in operating costs was primarily the result of an unfavorable difference in the fair value adjustment of derivatives and higher pooled marine vessel operating expenses.

Comparison of Second Quarter 2008 to Second Quarter 2007

Segment Profit

     Specialty’s segment profit for the second quarter of 2008 increased $4.1 million, primarily due to higher marine joint venture earnings.

Gross Income

     Gross income was $4.1 million higher than the prior year. Lease income increased $1.3 million, primarily due to income from investments in operating lease assets made in 2007, partially offset by the absence of lease income due to sales of assets in the prior year. Affiliate earnings increased $4.2 million, primarily due to strong marine joint venture earnings.

Ownership Costs

     Ownership costs increased $0.6 million, primarily due to depreciation expense on new operating lease assets acquired in 2007, partially offset by the absence of expense on assets that were previously leased-in.

Operating Costs

     The decrease in operating costs was primarily the result of a favorable difference in the fair value adjustment of derivatives, partially offset by higher pooled marine vessel operating expenses.

ASC

Segment Summary

          As of June 30, 2008, ASC’s fleet was fully utilized and the same is expected for the remainder of the year as demand for Great Lakes shipping is high. Additionally, water levels on the Great Lakes have risen during 2008, enabling ASC’s fleet to carry more cargo per trip, resulting in marginally higher revenues. Results for the quarter reflect the return to service of the M/V Walter J. McCarthy, Jr., which was damaged in January 2008.

          Negatively affecting operations for the quarter was a $2.9 million charge related to an adverse legal judgment in a dispute with a customer. ASC has provided notice for a cross claim to recover all or a portion of this judgment. Also during the quarter, diesel fuel costs continued to escalate, negatively affecting operating margins as a portion of these costs are not recovered.

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

	Three Months Ended				Six Months Ended
	June 30				June 30
	2008		2007		2008		2007
Gross Income
Marine operating revenues	$	88.2	$	72.8	$	102.3	$	80.4
Lease income		1.0		1.0		2.1		2.1
Other income		—		—		—		—
		89.2		73.8		104.4		82.5
Ownership costs
Depreciation		4.3		4.1		4.3		4.1
Interest expense, net		2.5		2.6		4.9		5.1
		6.8		6.7		9.2		9.2
Operating costs
Maintenance expense		5.9		5.9		6.5		6.2
Marine operating expense		68.4		52.7		79.9		58.6
Other operating expenses		2.9		—		2.9		(0.2	)
		77.2		58.6		89.3		64.6
Segment profit	$	5.2	$	8.5	$	5.9	$	8.7

Comparison of the First Six Months of 2008 to the First Six Months of 2007.

Segment Profit

     ASC’s segment profit of $5.9 million was $2.8 million lower than the prior year. The decrease was primarily due to the unfavorable litigation outcome.

Gross Income

     Gross income for the first six months of 2008 increased $21.9 million from the prior year. The increase was primarily due to higher fuel surcharges, which were more than offset in operating costs, higher freight rates and greater freight volume primarily related to carryover volume from 2007.

Ownership Costs

     Ownership costs for the first six months of 2008 were comparable to the prior year.

Operating Costs

     Operating costs increased $24.7 million, primarily due to increased fuel costs and the unfavorable litigation outcome.

Comparison of Second Quarter 2008 to Second Quarter 2007

Segment Profit

     ASC’s segment profit decreased $3.3 million in the quarter, primarily due to the unfavorable litigation outcome.

Gross Income

     Gross income for the second quarter of 2008 increased $15.4 million, primarily due to increased fuel surcharges, which were more than offset in operating costs.

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Ownership Costs

     Ownership costs for the quarter were comparable to the prior year.

Operating Costs

     Operating costs increased $18.6 million, primarily due to increased fuel costs and the unfavorable litigation outcome.

Other

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

     Components of Other are outlined below (in millions):

	Three Months Ended						Six Months Ended
	June 30						June 30
	2008			2007			2008			2007
Selling, general and administrative expenses	$	42.5		$	39.2		$	81.0		$	77.2
Unallocated interest expense, net		2.2			(3.6	)		1.1			(8.4	)
Other, including eliminations		(0.3	)		(0.4	)		(0.6	)		(0.5	)
Income taxes		20.7			24.3			35.9			46.2

SG&A, Unallocated Interest and Other

     SG&A expenses increased $3.3 million for the quarter and $3.8 million for the year, primarily due to the write-off of $2.2 million of previously capitalized costs related to an internal software development project and the effects of strengthening foreign exchange rates.

     Unallocated interest expense is the balance (excess or shortfall) of external interest expense remaining after allocation to the reporting segments. 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. Unallocated interest expense in the current year was impacted by higher debt balances driven by robust investment activity over the past year combined with significant repurchases of common stock. The credit for unallocated interest expense in the prior year was impacted by lower debt balances and interest income on significant cash balances related to proceeds received from the sale of Air, which was retained in Other.

Income Taxes

     GATX’s effective tax rate for continuing operations was 28% for the six months ended June 30, 2008, compared to 36% for the six months ended June 30, 2007. In 2008, the statute of limitations on a state income tax position taken in a prior period expired, resulting in the recognition of previously unrecognized tax benefits of $6.8 million. Additionally, in the current year, lower statutory rates in a number of foreign jurisdictions have benefited GATX’s overall effective tax rate. Excluding these tax benefits, GATX’s effective tax rate for the first six months of 2008 was 34%.

Discontinued Operations

     Discontinued operations consist of the Company’s former Air (“Air”) segment. On January 17, 2007, GATX completed the sale of the remainder of Air for gross proceeds of $227.1 million. Results of discontinued operations reflect directly attributable revenues, ownership, operating and SG&A expenses and income taxes.

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

	Three Months Ended			Six Months Ended
	June 30			June 30
	2007			2007
Revenues	$	—		$	0.5
Loss before income taxes		(1.8	)		(5.3	)
Loss from operations, net of taxes		(0.4	)		(1.0	)
Loss on disposal of segment, net of taxes		(0.7	)		(2.2	)
Net loss from discontinued operations	$	(1.1	)	$	(3.2	)

     See Note 14 to the consolidated financial statements for additional information.

Cash Flow and Liquidity

     Over the course of a full year, GATX expects to generate significant cash flow from a combination of operating activities and investment portfolio proceeds. This cash flow is used to service debt, pay dividends, and fund portfolio investments and capital additions. Cash flows from operations and portfolio proceeds are impacted by changes in working capital and the timing of asset dispositions. As a result, cash flow components will vary quarter to quarter. The following discussion of cash flow activity is presented excluding the impact of discontinued operations.

     Net cash provided by operating activities of continuing operations for the first six months of 2008 was $100.2 million, a decrease of $58.3 million from the prior year. The decrease was primarily due to changes in working capital.

     Portfolio investments and capital additions for the first six months of 2008 totaled $216.6 million, a decrease of $16.3 million from the prior year. Rail investments of $128.0 million were $56.8 million lower than the prior year, while Specialty investments of $69.6 million were $23.8 million higher. The timing of investments is dependent on transaction opportunities and market conditions.

     Portfolio proceeds of $85.0 million for the first six months of 2008 decreased $51.5 million from the prior year. Portfolio proceeds were higher in 2007 primarily due to proceeds received from sale of securities. Proceeds from sales of other assets increased $7.9 million primarily due to higher North American scrapping activity.

     GATX also expects to meet debt, lease and dividend obligations, as well as fund capital spending, through commercial paper issuances, committed revolving credit facilities and the issuance of secured and unsecured debt. GATX utilizes both domestic and international banks and capital markets.

     Debt proceeds for the first six months of 2008 were $339.8, consisting of issuances of $200.0 million and $150.0 million of recourse term debt, net of issuance costs and hedges. The proceeds were primarily used to retire $242.8 million of commercial paper and repurchase 2.1 million shares of GATX common stock for $76.5 million.

     In the first six months of 2008, holders of GATX’s 5.0% senior unsecured notes converted $64.7 million of notes, of which $0.7 million was settled with cash and $64.0 million was settled with shares. A total of 2.6 million common shares were issued as a result.

     Net cash provided by discontinued operations of $191.0 million in 2007 consisted primarily of proceeds received upon completion of the Air sale.

     GATX has a $550.0 million senior unsecured revolving bank facility, which matures in May 2012. At June 30, 2008, availability under the bank facility was $533.7 million, with $16.3 million of letters of credit issued and backed by the facility.

     The revolving bank facility contains various restrictive covenants, including requirements to maintain a fixed charge coverage ratio and an asset coverage test. The indentures for GATX’s public debt also contain restrictive covenants, including limitations on loans, advances or investments in related parties and dividends GATX may distribute. Some of the indentures also contain limitation on lien provisions that restrict 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. The loan agreements for certain of GATX’s wholly owned European subsidiaries also contain restrictive covenants, including leverage

22

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. 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. At June 30, 2008, GATX was in compliance with all covenants and conditions of the bank facility, public debt indentures and European subsidiary loan agreements.

     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 June 30, 2008, 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.

     At June 30, 2008, GATX’s unconditional purchase obligations of $628.3 million were primarily for railcars to be acquired and were comprised as follows (in millions):

	Payments Due by Period
	Total		2008		2009		2010		2011		2012		Thereafter
Rail	$	569.1	$	185.2	$	298.7	$	83.6	$	0.8	$	0.8	$	—
Specialty		59.2		59.2		—		—		—		—		—
	$	628.3	$	244.4	$	298.7	$	83.6	$	0.8	$	0.8	$	—

     As of June 30, 2008, $42.1 million of 5.0% senior notes (the “2003 Notes”) were outstanding and convertible into GATX common stock at a conversion price of $24.81 per share. In August 2008, holders of the 2003 Notes have the right to require all or a portion of the notes to be purchased for cash at a price equal to 100% of the principal amount of the 2003 Notes plus accrued and unpaid interest. Beginning in August 2008, GATX has the right to redeem the 2003 Notes at 100% of the principal amount plus accrued and unpaid interest. If GATX provides notice of redemption, the holders of the 2003 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. Additionally, 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 2003 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 2003 Notes. GATX may avoid paying this contingent interest by calling the 2003 Notes prior to the record date for the contingent interest period.

     On January 23, 2008, the Company’s Board of Directors authorized a $200 million common stock repurchase program. As of June 30, 2008, 2.1 million shares have been repurchased for $76.5 million, all of which occurred in the first quarter. No repurchases were made in the second quarter as the Company has opted to retain this capital to support investment opportunities that may become available. The repurchased shares were recorded as treasury stock under the cost method.

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Critical Accounting Policies

     There have been no changes to GATX’s critical accounting policies during the six months ending June 30, 2008; refer to GATX’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007, for a summary of GATX’s policies.

Non-GAAP Financial Information

     This report includes certain financial performance measures computed using non-Generally Accepted Accounting Principles (“GAAP”) components as defined by the SEC. These measures are return on equity excluding tax benefits, income from continuing operations excluding tax benefits and diluted earnings per share excluding tax benefits. As required under SEC rules, GATX has provided a reconciliation of these 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 Equity Excluding Tax Benefits — Income from continuing operations excluding tax benefits divided by average total shareholders equity.

        Reconciliation of non-GAAP financial information (in millions):

	June 30
	2008		2007
Consolidated On Balance Sheet Assets	$	4,888.6	$	4,367.9
Off Balance Sheet Assets		1,175.1		1,263.2
Total On and Off Balance Sheet Assets	$	6,063.7	$	5,631.1
Shareholders’ Equity	$	1,260.2	$	1,084.8

	Six Months Ended
	June 30
	2008			2007
Income from Continuing Operations as Reported	$	93.1		$	80.5
Tax benefit adjustment (a)		(6.8	)		—
Income from Continuing Operations Excluding Tax Benefits	$	86.3		$	80.5
Diluted Earnings Per Share as Reported	$	1.85		$	1.44
Tax benefit adjustment (a)		(0.13	)		—
Diluted Earnings Per Share Excluding Tax Benefits	$	1.72		$	1.44

(a) In 2008, the statute of limitations on a state income tax position taken in a prior period expired, resulting in the recognition of previously unrecognized tax benefits.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

     Since December 31, 2007, there have been no material changes in GATX’s interest rate and foreign currency exposures or types of derivative instruments used to hedge these exposures. For a discussion of the Company’s exposure to market risk, refer to Part II: Item 7A, Quantitative and Qualitative Disclosure about Market Risk reported in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007.

Item 4. 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 quarterly report, the Company’s disclosure controls and procedures were effective.

     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 quarter ended June 30, 2008, that materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

     Information concerning litigation and other contingencies is described in Note 13 to the consolidated financial statements and is incorporated herein by reference.

Item 1A. Risk Factors

     Since December 31, 2007, there have been no material changes in GATX’s Risk Factors. For a discussion of GATX’s risk factors, refer to Part 1: Item 1A, Risk Factors, reported in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007.

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Item 6. Exhibits

Exhibits:

Reference is made to the exhibit index which is included herewith and is incorporated by reference hereto.

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SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

GATX CORPORATION
(Registrant)

/s/ Robert C. Lyons Robert C. Lyons
Senior Vice President and
Chief Financial Officer
(Duly Authorized Officer)

Date: July 30, 2008

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EXHIBIT INDEX

Exhibit
Number	Exhibit Description
	Filed with this Report:
3.2	Amended and Restated Bylaws of GATX Corporation.
31A.	Certification Pursuant to Exchange Act Rule 13a-14(a) and Rule 15d-14(a) (CEO Certification).
31B.	Certification Pursuant to Exchange Act Rule 13a-14(a) and Rule 15d-14(a) (CFO Certification).
32.	Certification Pursuant to 18 U.S.C. Section 1350 (CEO and CFO Certification).

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EX-3.2

Exhibit 3.2

AMENDED AND RESTATED
BY-LAWS OF
GATX CORPORATION

ARTICLE I
MEETING OF SHAREHOLDERS

     Section 1. Place of Meeting. Every meeting of the shareholders of GATX Corporation (hereinafter called the Corporation) shall be held at the principal office of the Corporation in the State of New York, or at such other place in or out of said State as shall be specified in the notice of such meeting or waiver of such notice.

     Section 2. Annual Meetings. The annual meeting of the shareholders shall be held at the hour specified in the notice of such meeting, or waiver of such notice, on the fourth Friday of April in each year (or if that day shall be a legal holiday, then on the next succeeding business day) or on such other date as the Board of Directors of the Corporation (hereinafter called the Board) may determine for the election of directors and for the transaction of such other business as may properly come before the meeting.

     Section 3. Special Meetings. Special meetings of the shareholders may, unless otherwise provided by law, be called by the Chairman of the Board or the President of the Corporation, or by a majority of the Board.

     Section 4. Notice of Meetings. Notice of the time and place of each meeting of the shareholders and of the purpose or purposes for which the meeting is called shall be given in the name of the President, an Executive Vice-President, a Senior Vice-President, the Secretary or an Assistant Secretary of the Corporation. Such notice may be written or electronic and, unless otherwise provided by law, shall be duly delivered or transmitted to each shareholder entitled to vote at the meeting not less than ten (10) nor more than sixty (60) days before the meeting. If mailed, such notice (a) shall be directed to the shareholder at his address as it appears on the stock book, unless he shall have filed with the Secretary of the Corporation a written request that notices intended for him be mailed to some other

1

place, in which case it shall be mailed to the address designated in such request and (b) shall be deemed given when deposited in the United States mail, postage prepaid. If transmitted electronically, such notice shall be given when directed to the shareholder at his electronic address supplied by the shareholder to the Secretary of the Corporation or as otherwise directed pursuant to the shareholder’s authorization or direction. No notice need be given of any adjourned meeting, except when expressly required by law.

     Section 5. Quorum. Unless otherwise provided by law or in the Certificate of Incorporation of the Corporation as amended (hereinafter called the Certificate of Incorporation), the presence of the holders of record, in person or represented by proxy, of a majority of the shares of stock entitled to be voted thereat shall be necessary to constitute a quorum for the transaction of business at any meeting of shareholders. In the absence of a quorum at any such meeting or any adjournment or adjournments thereof, a majority in voting interest of those present in person or represented by proxy, or in the absence therefrom of all the shareholders, any officer entitled to preside at, or to act as secretary of, such meeting, may adjourn such meeting from time to time until a quorum is present thereat. At any adjourned meeting at which a quorum is present any business may be transacted which might have been transacted at the meeting as originally called.

     Section 6. Organization. At each meeting of the shareholders, the Chairman of the Board, the President, an Executive Vice-President or a Senior Vice-President designated for the purpose by the Chairman of the Board (with priority in the order named), or in the absence of said officers, a chairman chosen by a majority vote of the shareholders present in person or represented by proxy and entitled to vote thereat, shall act as chairman. The Secretary shall act as secretary at each meeting of the shareholders, or in his absence the chairman of the meeting may appoint any person present to act as secretary of the meeting.

     Section 7. Order of Business. The order of business at all meetings of the shareholders shall be determined by the chairman of the meeting.

     Section 8. Voting. Unless otherwise provided by law or in the Certificate of Incorporation, each holder of record of shares of stock of the Corporation entitled to vote at

2

any meeting of shareholders shall, in all matters, be entitled to one vote for each share of stock owned by him. Shareholders may vote either in person or by proxy. Unless otherwise provided by law or in the Certificate of Incorporation or these By-laws, the majority of the votes cast shall prevail on all matters submitted to vote at any meeting of the shareholders. Unless so directed by the chairman of the meeting, the vote at such meeting need not be by ballot, except that all elections of directors by shareholders shall be by ballot. At the direction of such chairman that a vote by ballot be taken on any question, such vote shall be taken. On a vote by ballot each ballot shall be signed by the shareholder voting, or by his proxy as such if there be such proxy. Unless otherwise provided by law or by these By-laws all voting may be via voce.

     Section 9. Inspectors of Election. At each meeting of the shareholders, one or more inspectors of election shall be appointed in accordance with applicable law to act thereat. No director or candidate for the office of director shall act as an inspector of election in any election of directors. Each inspector of election so appointed, before entering upon the discharge of his duties, shall be sworn faithfully to execute the duties of inspector at such meeting with strict impartiality and according to the best of his ability, and the oath so taken shall be subscribed by such inspectors. Such inspectors of election, after the voting on any question, shall make a certificate of the result of the vote taken. Inspectors need not be shareholders.

     Section 10. Record Date. The Board may fix a day and hour not more than sixty (60) nor less than ten (10) days prior to the day and hour then fixed for the holding of any meeting of shareholders as the time as of which shareholders entitled to notice of and to vote at such meeting shall be determined, and all persons who were holders of record of voting stock at such time and no others shall be entitled to notice of and to vote at such meeting.

     Section 11. Advance Notification of Shareholder Nominations for Directors and Other Proposals. No shareholder may propose to nominate persons for election to the Board at an annual meeting of the shareholders of the Corporation or to bring other business before an annual meeting of the shareholders of the Corporation, unless such

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shareholder gives timely notice thereof to the Secretary of the Corporation. To be timely, a shareholder’s notice must be addressed to the Secretary of the Corporation and received at the principal executive offices of the Corporation not more than one hundred fifty (150) days and not less than one hundred twenty (120) days prior to the date of the Corporation’s proxy statement released to shareholders in connection with the prior year’s annual meeting; provided, however, that in the event the annual meeting is called for a date which is not within thirty (30) days before or after such anniversary date, notice by the shareholder, to be timely, must be received no later than the close of business on the fifteenth (15th) day following the day on which notice of the date of the annual meeting was transmitted or public disclosure of the date of the annual meeting was made, whichever occurs first.

     Such shareholder’s notice shall set forth: (a) as to each person whom the shareholder proposes to nominate at the annual meeting for election to the Board, (i) the name, age, business address and residential address of such person, (ii) the principal occupation or employment of such person, (iii) the class and number of shares of the Corporation which are owned beneficially and of record by such person, (iv) a description of all arrangements or understandings between such shareholder and such person, (v) all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended, and any other rules of the Securities and Exchange Commission, (vi) such other information as may be reasonably required by the Corporation to determine the eligibility of such person to serve as a director of the Corporation, and (vii) any such person’s written consent to serve as a director if so elected; (b) as to any other business that such shareholder proposes to bring before the annual meeting, (i) a description of the business desired to be brought before the meeting in sufficient detail for such business to be summarized in the agenda for the meeting, (ii) the reasons for conducting such business at the meeting, and (iii) any material interest in such business of such shareholder and the beneficial owner, if any, on whose behalf the proposal is made; and (c) as to the shareholder giving the notice and the beneficial owner,

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if any, on whose behalf the nomination or proposal is made, (i) the name and address of such shareholder, as it appears on the Corporation’s books, and of any such beneficial owner, and (ii) the class and number of shares of the Corporation which are owned beneficially and of record by such shareholder and any such beneficial owner. Notwithstanding compliance with the foregoing requirements, no person proposed to be nominated to the Board by a shareholder pursuant to this procedure shall become a nominee for election to the Board and no other business shall be considered at the annual meeting unless the shareholder who has provided the notice or his proxy, nominates such person or introduces such business at the meeting, as the case may be. The presiding officer of the annual meeting shall, if the facts warrant, refuse to acknowledge a nomination or the consideration of business which was not made in compliance with the foregoing requirements.

ARTICLE II
Directors

     Section 1. Number, Election, Term, Powers. The Corporation shall have such number of directors, not less than three (3) nor more than twenty-one (21), as shall from time to time be determined by the vote of a majority of the entire board (as “entire board” is defined for these purposes under the laws of the State of New York). Except as otherwise provided in these By-laws or by law, the directors shall be chosen at the annual meeting of shareholders in each year, by a plurality of the votes cast in the election therefor. The term of office of each director shall (unless vacated as provided herein) be from the time of his election and qualification until the annual meeting of shareholders next succeeding his election and until his successor shall have been duly elected and qualified, or until his earlier death or resignation. The directors shall act only as a board and the individual directors shall have no power as such. The Board shall have, in the management of the Corporation’s affairs, all powers which are not inconsistent with the laws of the State of New York, these By-laws or the Certificate of Incorporation.

     Section 2. Qualifications. All directors shall be at least twenty-one (21) years of age.

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     Section 3. First Meeting. After each election of directors by the shareholders, on the same day and at the conclusion of the meeting of shareholders at which such election shall be held, and at the place where such election is held, the newly elected Board shall meet for the purpose of organization, the election of officers and the transaction of other business. Notice of such meeting need not be given. If a quorum shall not be present at such time and place, but at least one director is present, then such meeting shall be adjourned as provided in Section 6 of this Article II. If no director shall be present at such time and place, then such meeting may be held at any other time and place which shall be specified in a notice given as hereinafter provided for special meetings of the Board or in a waiver of notice thereof.

     Section 4. Regular Meetings. Regular meetings of the Board shall be held at such times and places as the Board may determine. If any day fixed for a regular meeting shall be a legal holiday at the place where the meeting is to be held, then the meeting which would otherwise be held on that day shall be held at the same hour on the next succeeding business day at said place. Except as provided by law or these By-laws, notice of regular meetings need not be given.

     Section 5. Special Meetings. Special meetings of the Board shall be held whenever called by (a) the Chairman of the Board, (b) the President or (c) the Secretary at the request of a majority of the members of the Board. Unless otherwise provided by law, notice of each such special meeting shall be (a) mailed to each director, addressed to him at his residence or usual place of business, at least two days before the day on which such meeting is to be held or (b) (i) sent by facsimile or electronic mail or (ii) delivered personally or by telephone, in each case not later than the day before the day on which such meeting is to be held. Notice of any meeting of the Board need not, however, be given to any director, if waived by him as in these By-laws provided. Unless otherwise provided by law or these By-laws, the notice or waiver of notice of any meeting of the Board need not contain any statement of the purposes of the meeting or any specification of the business to be transacted thereat.

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     Section 6. Quorum. Unless otherwise provided by law, the Certificate of Incorporation or these By-laws, the presence of not less than one-third of the number of directors as fixed in accordance with these By-laws shall be necessary to constitute a quorum for the transaction of business by the Board. In the absence of a quorum, a majority of the directors present may adjourn any meeting of the Board from time to time until a quorum shall be present thereat. Notice of any adjourned meeting need not be given. At any adjourned meeting at which a quorum is present any business may be transacted which might have been transacted at the meeting as originally called.

     Section 7. Voting. At all meetings of directors, a quorum being present, all matters, except those the manner of deciding upon which is otherwise provided by law these By-laws or the Certificate of Incorporation, shall be decided by the vote of a majority of the directors present.

     Section 8. Organization. At each meeting of the Board, the Chairman of the Board or, in the absence of the Chairman of the Board, the Lead Director shall act as chairman of the meeting. The Secretary, or in the Secretary’s absence any person appointed by the chairman of the meeting, shall act as secretary of the meeting. Any meeting of the Board may be adjourned by the vote of a majority of the directors present at such meeting.

     Section 9. Vacancies. Any vacancy in the Board whether arising from death, resignation, an increase in the number of directors or any other cause, may be filled by the vote of a majority of the remaining directors, provided that, in the case of a vacancy occurring through the resignation of a director, the resigning director shall be entitled to vote with the other directors for his successor.

     Section 10. Place of Meeting. The Board may hold its meetings at such place or places within or without the State of New York as it may from time to time by resolution determine or as shall be specified or fixed in the respective notices or waivers of notice thereof.

     Section 11. Indemnification. (a) The Corporation shall indemnify to the fullest extent permitted by law, any person made, or threatened to be made, a party to an action or proceeding, civil or criminal (including an action by or in the right of the Corporation or

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by or in the right of any other corporation or business entity of any type or kind, domestic or foreign, which any director or officer of the Corporation served in any capacity at the request of the Corporation), by reason of the fact that he or she, or his or her testator or intestate, was a director or officer of the Corporation (or served any other corporation or business entity of any type or kind, domestic or foreign, in any capacity at the request of the Corporation), against judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys’ fees actually and necessarily incurred as a result of such action or proceeding, or any appeal therein, and the Corporation may pay, in advance of final disposition of any such action or proceeding, expenses (including attorneys’ fees) incurred by such person in defending such action or proceeding.

     The Corporation may indemnify, and make advancements to, any person made, or threatened to be made, a party to any such action or proceeding by reason of the fact that he or she, or his or her testator or intestate, is or was an agent or employee (other than a director or officer) of the Corporation (or served another corporation or business entity at the request of the Corporation in any capacity), on such terms, to such extent, and subject to such conditions, as the Board shall determine, including payment, in advance of final disposition of any such action or proceeding, expenses (including attorneys’ fees) incurred by such person in defending such action or proceeding.

     In addition to the foregoing, the Corporation shall indemnify to the fullest extent permitted by law, any person made, or threatened to be made, a party to an action or proceeding, civil or criminal, by reason of the fact that such person, or his or her testator or intestate, is or was a director or officer of any other corporation or business entity, of any type or kind, domestic or foreign, which any such person served at the request of the Corporation, against judgments, fines, amounts paid in settlement (with the prior consent of the Corporation) and reasonable expenses, including attorneys’ fees actually and necessarily incurred as a result of such action or proceeding, or any appeal therein, and the Corporation may pay, in advance of final disposition of any such action or proceeding, expenses (including attorneys’ fees) incurred by such person in defending such action or proceeding.

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     (b) A person shall be presumed to be entitled to indemnification for any act or omission covered by these By-laws. The burden of proof of establishing that a person is not entitled to indemnification because of the failure to fulfill some requirement of New York law, the Corporation’s charter, or the By-laws shall be on the Corporation.

     (c) If a claim under these By-laws is not paid in full by the Corporation within thirty days after a written claim has been received by the Corporation, the claimant may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim and, if successful in whole or in part, the claimant shall be entitled to be paid also the expense of prosecuting such claim, including attorneys’ fees.

     Section 12. Action by Written Consent. Unless otherwise provided by law or in the Certificate of Incorporation, any action required or permitted to be taken by the Board or any committee thereof may be taken without a meeting if all members of the Board or the committee consent in writing to the adoption of a resolution authorizing the action. The resolution and the written consents thereto by the members of the Board or committee shall be filed with the minutes of the proceedings of the Board or committee.

     Section 13. Action by Means of Conference Telephone. Any one or more members of the Board may participate in a regular or special meeting of the Board by means of a conference telephone or similar communications equipment allowing all persons participating in the meeting to hear each other at the same time. Participation by such means shall constitute presence in person at a meeting.

ARTICLE III
COMMITTEES

     Section 1. Committees. Subject to the conditions prescribed by law, there shall be an Appointment Committee of the Board consisting of the Chairman of the Board which shall have all of the authority of the Board to appoint and take certain other actions with respect to Vice-Presidents (other than Executive Vice Presidents and Senior Vice Presidents) pursuant to and in accordance with the terms of these By-laws. Additionally, on the terms, to the extent and subject to the conditions prescribed by law or by resolution of the Board, the Board, by resolution adopted by a majority of the entire Board, may

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designate from among its members an Executive Committee and other committees (the Executive Committee and any other committees designated pursuant to this sentence being referred to herein as “Designated Committees”), each of which shall consist of three or more directors and shall have the authority of the Board. The Board may designate one or more directors as alternate members of any Designated Committee, who may act in the place of any absent member or members of such Designated Committee. The presence of not less than one-third of the number of members of any Designated Committee or two members (three members if any of the members comprising the quorum is not a U.S. citizen) of such Designated Committee, whichever shall be greater, shall be necessary to constitute a quorum of such Designated Committee and, except as otherwise provided by law, the Certificate of Incorporation or these By-laws, a majority vote of the Designated Committee members present shall be the act of the Designated Committee.

     Section 2. Action by Means of Conference Telephone. Any one or more members of any Designated Committee may participate in a meeting of such Designated Committee by means of a conference telephone or similar communications equipment allowing all persons participating in the meeting to hear each other at the same time. Participation by such means shall constitute presence in person at a meeting.

ARTICLE IV
OFFICERS

     Section 1. Number. The officers of the Corporation shall be a Chairman of the Board, a Chief Executive Officer, a President, one or more Vice Presidents (which may include one or more Executive Vice-Presidents and/or one or more Senior Vice Presidents), a Secretary, a Treasurer and a Controller. The officers of the Corporation may also include, at the option of the Board, one or more Vice-Chairmen of the Board, each of whom shall be a member of the Board. Two or more offices may be conferred upon one person, except the offices of President and Secretary. The Board may require any officer, agent or employee to give security for faithful performance of such person’s duties.

     Section 2. Election, Term of Office, Qualification. The officers of the Corporation shall be chosen by the Board (or, in the case of any Vice-President other than any

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Executive Vice President or Senior Vice President, by either the Board or the Appointment Committee) as soon as practicable after each annual election of directors, each such officer to hold office until his successor shall have been chosen and qualified, or until his earlier death or resignation, or removal in the manner hereinafter provided.

     Section 3. Subordinate Officers. The Board may appoint as subordinate officers, assistants to any officer including assistant secretaries and assistant treasurers, agents or employees as the Board may deem necessary or advisable, each of whom shall serve for such period, have such authority and perform such duties as the Board may from time to time determine or as may be set forth in these By-laws. The Board may delegate to any officer the power to appoint and remove subordinate officers, assistant secretaries, assistant treasurers, agents or employees.

     Section 4. Chief Executive Officer. The Board shall designate either the Chairman of the Board or the President, or both if the same person, as the Chief Executive Officer. Subject to the oversight of the Board, the Chief Executive Officer shall have duties customarily incident to the office of the Chief Executive Officer including general and active supervision and direction over the property, business and affairs of the Corporation and personnel thereof subject, however, to the right of the Board (or, in the case of any Vice-President of the Corporation other than any Executive Vice President or Senior Vice President, the right of the Board or the Appointment Committee) to delegate any specific power and authority, except such as may be by statute exclusively conferred on the Chief Executive Officer, to any other officer or officers of the Corporation.

     Section 5. The Chairman of the Board. The Chairman of the Board shall have such duties as may be prescribed by the Board from time to time. If present, the Chairman of the Board shall preside at all meetings of the shareholders and the Board.

     Section 6. The President. The President shall have such powers and perform such duties as the Board, the Chairman of the Board or the Chief Executive Officer (unless the latter two positions are held by the same person) may prescribe from time to time. In the case of the absence or inability to act of the Chief Executive Officer if not the same person, the President shall perform the duties of Chief Executive Officer, and when so

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acting shall have all of the powers and be subject to all of the restrictions upon the Chief Executive Officer.

     Section 7. Executive Vice Presidents, Senior Vice Presidents and Vice Presidents. Each Executive Vice President and Senior Vice President shall have such powers and perform such duties as the Board, the Chairman of the Board or the President may from time to time prescribe, and shall perform such other duties as may be prescribed by these By-laws. In case of the absence or inability to act of the President, then one of the Executive Vice Presidents or Senior Vice Presidents who shall be designated for the purpose by the Board shall perform the duties of the President, and when so acting shall have all the powers of and be subject to all the restrictions upon the President. Each Vice President shall have such powers and perform such duties as the Board, the Appointment Committee, the Chairman of the Board, the President, any Executive Vice President or any Senior Vice President may from time to time prescribe, and shall perform such other duties as may be prescribed by these By-laws.

     Section 8. The Secretary. The Secretary shall act as secretary of, and keep the minutes of, all meetings of the Board and of the shareholders; he shall cause to be given such notice of all meetings of the shareholders and directors as required; he shall be custodian of the seal of the Corporation and shall affix the seal or cause it to be affixed to all certificates and documents, the execution of which on behalf of the Corporation under its seal shall have been specifically or generally authorized; he shall have charge of the books, records and papers of the Corporation relating to its organization as a corporation; and he shall in general perform all the duties incident to the office of Secretary. He shall also have such other powers and perform such other duties, not inconsistent with these By-laws, as the Chairman of the Board, the President or the Board shall from time to time prescribe.

     Section 9. The Treasurer. The Treasurer shall have charge and custody of, and be responsible for, all the funds and securities of the Corporation and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name of and to the credit of the Corporation in such banks or other depositaries as may be designated by the Board; he

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shall disburse the funds of the Corporation, taking proper vouchers for such disbursements, and shall render to the Chairman of the Board, the President or the Board, whenever any one or more of them may require him so to do, a statement of all his transactions as Treasurer; and, in general, he shall perform all the duties incident to the office of Treasurer and such other duties as may from time to time be assigned to him by the Chairman of the Board, the President or the Board.

     Section 10. The Controller. The Controller shall keep accurate accounts, in such form as may be approved by the Board, of all financial transactions of the Corporation; he shall supervise and direct the keeping of all of the financial records and accounting records of the Corporation, and shall have general charge, supervision and direction of the accounting departments of the Corporation; he shall discharge such other duties and have such other powers as may be required of or granted to him by the Board.

     Section 11. Assistants to the President. Each assistant to the President shall, at the request of the President, aid and assist him in the performance of his duties and the exercise of his powers, and have such other powers and perform such other duties as may from time to time be assigned to him by the Chairman of the Board, the President or the Board.

     Section 12. Assistant Secretaries. In case of the absence or inability to act of the Secretary, the Assistant Secretary, or, if there shall be more than one, any of the Assistant Secretaries, shall perform the duties of the Secretary, and, when so acting shall have all the powers of, and be subject to all the restrictions upon, the Secretary. Each of the Assistant Secretaries shall perform such other duties as from time to time may be assigned to him by the Chairman of the Board, the President, the Secretary or the Board.

     Section 13. Assistant Treasurers. In case of the absence or inability to act of the Treasurer, the Assistant Treasurer, or, if there be more than one, any of the Assistant Treasurers, shall perform the duties of the Treasurer, and, when so acting, shall have all the powers of, and be subject to all the restrictions upon, the Treasurer. Each of the Assistant Treasurers shall perform such other duties as from time to time may be assigned to him by the Chairman of the Board, the President, the Treasurer or the Board.

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     Section 14. General Provisions. All officers shall serve under the direction of and at the pleasure of the Board (or, in the case of any Vice President other than any Executive Vice President or Senior Vice President, the Board and the Appointment Committee) and be subject to removal thereby at any time with or without cause. Any vacancy occurring in any office may be filled by the Board (or, in the case of any Vice President other than any Executive Vice President or Senior Vice President, by the Board or the Appointment Committee).

ARTICLE V
CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.

     Section 1. Execution of Contracts. Except as otherwise provided by law or in these By-laws, the Chairman of the Board, any Vice-Chairman of the Board, the President, any Executive Vice-President and any Senior Vice President shall each have authority to execute and deliver any and all instruments for and in the name of the Corporation. The Board, the Chairman of the Board and the President (and, in the case of any Vice-President other than any Executive Vice-President or Senior Vice-President, the Appointment Committee, any Executive Vice-President and any Senior Vice-President) may authorize any other officer or agent to execute and deliver any instrument for and in the name of the Corporation, and such authority may be general or confined to specific instances. Unless authorized by (a) in the case of any Vice-President other than any Executive Vice President or Senior Vice-President, the Board, the Chairman of the Board, the President, these By-laws, the Appointment Committee, any Executive Vice-President or any Senior Vice-President or (b) in the case of any other officer or agent, the Board, the Chairman of the Board, the President or these By-laws, no officer, agent or employee shall have any power or authority to bind the Corporation by any contract or engagement or to pledge its credit or to render it pecuniarily liable for any purpose or to any amount.

     Section 2. Indebtedness. No loans shall be contracted on behalf of the Corporation and no negotiable paper shall be issued in its name unless authorized by resolutions of the Board, which authority may be general or confined to specific instances. When authorized by the Board so to do, any officer or agent of the Corporation thereunto

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authorized may effect loans and advances for the Corporation from any bank, trust company or other institution, or from any firm, corporation or individual, and for such loans and advances may make, execute and deliver promissory notes, bonds, or other certificates or evidences of indebtedness of the Corporation and, when authorized so to do, may pledge, hypothecate or transfer any securities or other property of the Corporation as security for any such loans or advances.

     Section 3. Checks, Drafts, etc. All checks, drafts, and other orders for the payment of moneys out of the funds of the Corporation and all notes or other evidences of indebtedness of the Corporation shall be signed on behalf of the Corporation in such manner as shall from time to time be determined by resolution of the Board, which resolution may be general or confined to specific instances.

     Section 4. Deposits. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositaries as the Board may select or as may be selected by any officer or agent of the Corporation to whom such power may from time to time be delegated by the Board; and, for the purpose of such deposit, the Chairman of the Board, the President, any Executive Vice-President, any Senior Vice-President, the Treasurer or the Secretary, or any other officer, agent or employee of the Corporation to whom such power may be delegated by the Board, may endorse, assign and deliver checks, drafts and other orders for the payment of moneys which are payable to the order of the Corporation.

ARTICLE VI
SHARES AND DIVIDENDS

     Section 1. Consideration for Issue of Stock. No stock shall be issued except as permitted under the Business Corporation Law of the State of New York.

     Section 2. Certificates. The shares of the Corporation shall either be represented by certificates or shall be uncertificated and represented by book entry registered in the

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name of the holder on the books and records of the Corporation or its transfer agent. At the direction of the Corporation to its stock transfer agent and absent a specific request for a certificate by the registered holder or transferee thereof, all shares of the Corporation shall be uncertificated upon the original issuance thereof by the Corporation or upon the surrender of the certificate representing such shares to the Corporation (Direct Registration of shares). If shares are represented by certificates, each holder of record of shares of stock of the Corporation shall be provided with a certificate or certificates of stock representing the number of shares owned by such holder, in such form as shall be (a) approved by the Board, (b) signed by (i) the Chairman of the Board, the President, an Executive Vice-President, or a Senior Vice-President and (ii) the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary and (c) sealed with the seal of the Corporation, which seal may be an engraved or printed facsimile, certifying the number of shares owned by him in the Corporation. The signatures of the officers upon a certificate may be facsimiles if the certificate is countersigned by a transfer agent or registered by a registrar other than the Corporation itself or its employee. In case any such person who shall have signed, or whose facsimile signature has been placed upon, such certificate shall have ceased to hold such position before such certificate is issued, it may be issued by the Corporation with the same effect as if such person had not ceased to hold such position at the date of its issue. Upon the election of the Corporation to provide for Direct Registration of shares, such certificates shall be provided only upon request to the Corporation by the registered holder or transferee thereof.

     Section 3. Transfer of Shares. Transfers of shares of the capital stock of the Corporation shall be made only on the books of the Corporation by the holder thereof, or by his attorney thereunto authorized by a power of attorney duly executed and filed with the agent or officer in charge of such books, subject to such proof or guaranty signature as the Corporation or its transfer agent may require, if any, and on surrender of the certificate or certificates for such shares, properly endorsed, or upon receipt of proper transfer instructions from the owner of uncertificated shares, or upon the escheat of said shares under the laws of any state of the United States. A person in whose name shares of stock

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stand on the books of the Corporation shall be deemed the owner thereof as regards the Corporation, provided that whenever any transfer of shares shall be made for collateral security, and not absolutely, such fact, if known to the officer in charge or to said transfer agent, shall be so expressed in the entry of transfer.

     Section 4. Record Date. The Board may fix a day and hour not exceeding sixty (60) days preceding the date fixed for the payment of any dividend or the making of any distribution, or for the delivery of evidences of rights or evidences of interests arising out of any changes, conversion or exchange of capital stock, as a record time for the determination of the shareholders entitled to receive such dividend, distribution, rights or interests, and in such case only shareholders of record at the time so fixed shall be entitled to receive such dividend, distribution, rights or interests.

     Section 5. Lost, Stolen, Destroyed or Mutilated Certificates. A certificate for shares of the stock of the Corporation may be issued in place of any certificate lost, stolen, destroyed or mutilated, but only on delivery to the Corporation, unless the Board otherwise determines, of a bond of indemnity, in form and amount and with one or more sureties satisfactory to the Board, or such officer or officers of the Corporation or such transfer agent as the Board may from time to time designate, and of such evidence of such loss, theft, destruction or mutilation as the Board, or such officer or officers or transfer agent, may require.

ARTICLE VII
OFFICES AND BOOKS

     Section 1. Offices. The Board may from time to time and at any time establish offices of the Corporation or branches of its business at whatever place or places seem to it expedient. Offices or agencies for the transfer and registration of stock shall at all times be maintained in the City of New York. Additional such offices or agencies may be maintained elsewhere, in the discretion of the Board.

     Section 2. Books. There shall be kept at the office of the Corporation in Chicago, Illinois, correct books of all the business and transactions of the Corporation, and, at the office of the Corporation in the State of New York, or at the office of a transfer agent of the

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Corporation in such State, the stock book of the Corporation, which shall contain the names, alphabetically arranged, of all persons who are shareholders of the Corporation, showing their respective places of residence, the number of shares held by them respectively, and the time when they respectively became the owners thereof. The stock book shall at all times during business hours be open to the inspection of all persons permitted by law to inspect the same.

ARTICLE VIII
SEAL

     Section 1. The common seal of the Corporation shall consist of a round seal with the words “GATX CORPORATION” in the margin and the words “NEW YORK, 1916” in the center thereof.

ARTICLE IX
WAIVER OF NOTICE

     Section 1. Whenever any notice whatever is required to be given by these By-laws, the Certificate of Incorporation or by law, the person entitled thereto may, in person, or in the case of a shareholder, by his duly authorized attorney, waive such notice in writing (which shall include the use of facsimile and electronic mail), whether before or after the meeting or other matter or event in respect of which such notice is to be given, and in such event such waiver shall be equivalent to such notice and such notice need not be given to such person, and any action to be taken after such notice or after the lapse of a prescribed period of time may be taken without such notice and without the lapse of any period of time. The presence of a director at any meeting of the Board shall constitute waiver of notice thereof by him.

ARTICLE X
FISCAL YEAR

     Section 1. The fiscal year of the Corporation shall end on the thirty-first day of December in each year.

ARTICLE XI
AMENDMENTS

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     Section 1. These By-laws may be altered, changed, amended or repealed, or new By-laws may be adopted, at any regular or special meeting of the Board of Directors, by a majority vote of all the Directors then in office (whether or not present in person or by proxy at the meeting on which such action is to be taken), provided notice of the proposed alteration, change, amendment, repeal or adoption shall have been given with notice of the meeting.

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EX-31.A

Exhibit 31A

Certification of Principal Executive Officer

I, Brian A. Kenney, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q 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 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

July 30, 2008

EX-31.B

Exhibit 31B

Certification of Principal Financial Officer

I, Robert C. Lyons, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q 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 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

July 30, 2008

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 Quarterly Report of GATX Corporation (the “Company”) on Form 10-Q for the period ending June 30, 2008, 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	/s/ Robert C. Lyons
Brian A. Kenney	Robert C. Lyons
Chairman, President and	Senior Vice President and
Chief Executive Officer	Chief Financial Officer

July 30, 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.