Income Taxes

3 Months Ended

Mar. 31, 2012

Income Taxes [Abstract]

Income Taxes

NOTE 8. Income Taxes

GATX’s effective tax rate was 30% for the three months ended March 31, 2012, compared to 23% for the three months ended March 31, 2011. Excluding the effect of the AAE interest rate swaps from each period, the effective tax rates for the first quarter of 2012 and 2011 were 29% and 27%, respectively. The level of GATX’s effective tax rate in any year is driven by the mix of pre-tax income, including share of affiliates’ earnings, among domestic and foreign jurisdictions, which are taxed at different rates.

As of March 31, 2012, GATX’s gross liability for unrecognized tax benefits totaled $20.8 million, which, if fully recognized, would decrease income tax expense by $20.8 million ($18.8 million net of federal tax impact). Subject to the completion of certain audits or the expiration of the applicable statute of limitations, the Company believes it is reasonably possible that, within the next 12 months, unrecognized domestic tax benefits of $15.5 million and unrecognized foreign tax benefits of $0.4 million may be recognized.