Income Taxes

9 Months Ended

Sep. 30, 2011

Income Taxes [Abstract]

Income Taxes

NOTE 9. Income Taxes

GATX’s effective tax rate was 25% for the nine months ended September 30, 2011, compared to 23% for the nine months ended September 30, 2010. In the prior year, GATX’s liability for unrecognized tax benefits was reduced by $3.7 million in connection with the close of various federal and foreign tax audits. Additionally, a $1.9 million deferred tax benefit was recognized in connection with a reduction in the statutory tax rates of the United Kingdom. In the current year, GATX recognized a $4.1 million deferred tax benefit in connection with a further reduction in the statutory tax rates of the United Kingdom. Excluding the effect of these tax benefits from each year, GATX’s effective tax rate for the first nine months of 2011 and 2010 was 29% and 30% respectively. The difference between the 2011 and 2010 effective tax rates was driven by variability in the mix of pre-tax income, including share of affiliates’ earnings, among domestic and foreign jurisdictions, which are taxed at different rates.

As of September 30, 2011, GATX’s gross liability for unrecognized tax benefits totaled $43.7 million, which, if fully recognized, would decrease income tax expense by $23.3 million ($21.2 million net of federal tax).