GATX Corporation Reports 2009 Third Quarter Results

GATX Corporation (NYSE:GMT) today reported 2009 third quarter net income of $19.6 million or $.42 per diluted share, compared to 2008 third quarter net income of $73.9 million or $1.46 per diluted share. Third quarter 2008 results include after-tax benefits of $24.4 million or $.48 per diluted share of income from the sale of real estate in Europe, a reversal of certain European environmental reserves, and unrealized gains related to certain interest rate swaps at GATX’s AAE Cargo affiliate (AAE).

Net income for the first nine months of 2009 was $59.9 million or $1.24 per diluted share, compared to $165.9 million or $3.31 per diluted share in the prior year period. The 2009 year-to-date results include after-tax unrealized losses of $18.5 million or $.38 per diluted share related to the AAE interest rate swaps. The 2008 year-to-date results include $26.4 million or $.52 per diluted share in aggregate benefits from the reversal of an income tax accrual reported in the first quarter, income from the sale of real estate and the reversal of certain environmental reserves in Europe, and net unrealized gains from the AAE interest rate swaps.

"Our markets remain extremely challenging and competitive,” said Brian A. Kenney, president and chief executive officer of GATX. "We maintained our rail fleet’s utilization at almost 96% in the third quarter. However, lease rates continued to decline. While we have shortened the term of lease renewals in 2009 in anticipation of an eventual market recovery, the current pressure on rates will have a dampening effect on lease income through 2010.

"Charter rates at the marine joint ventures in Specialty remain well below rates in recent years, with little change between the second and third quarters of 2009. At American Steamship Company (ASC), vessel demand has moved up slightly as steel manufacturers recently restarted a small number of blast furnaces. However, ASC continues to operate in a difficult environment with dramatically lower demand for iron ore shipments than in previous years.

"Investment volume was approximately $186 million in the third quarter. Asset prices have declined dramatically from 2007 peaks, a positive for companies like GATX with the capacity and interest in purchasing assets.”

Mr. Kenney concluded, "We continue to expect 2009 full-year earnings to be in the range of $2.00 per diluted share, excluding the unrealized losses noted above. Despite the market conditions, GATX is well positioned to manage through this downturn and is focused on strengthening our position in the market while generating attractive long-term returns for our shareholders.”

RAIL

Rail segment profit was $47.8 million in the third quarter of 2009, compared to third quarter 2008 segment profit of $106.3 million. The third quarter results for 2008 include $29.4 million of pre-tax benefits from the sale of real estate in Europe, a reversal of certain European environmental reserves, and unrealized gains related to certain interest rate swaps at AAE. Rail reported segment profit of $135.2 million year-to-date 2009, compared to $250.4 million in the same period 2008. The 2009 year-to-date results include pre-tax unrealized losses of $22.0 million related to the AAE interest rate swaps noted above. The 2008 year-to-date results include $23.9 million of pre-tax benefits from the sale of real estate in Europe, a reversal of certain European environmental reserves, and net unrealized gains from the AAE interest rate swaps. Scrap gains (included in "Other income”) at Rail were $6.2 million in year-to-date 2009 versus $25.9 million in 2008 reflecting a decline in scrap prices.

At September 30, 2009, Rail’s North American fleet totaled approximately 111,000 cars. Fleet utilization was 95.9% compared to 96.0% at the end of the second quarter and 97.9% at year end. Renewal lease rates in the Lease Price Index (LPI) declined 8.5% over the expiring rate, compared to a 9.8% decline in the second quarter 2009 and a decline of 0.3% in the third quarter 2008. The average renewal term in the third quarter was 39 months, compared to 36 months in the second quarter 2009 and 57 months in the third quarter of 2008. Rail’s European wholly-owned tank car fleet totaled approximately 20,000 cars and utilization was 94.7%, compared to 95.6% at the end of the second quarter and 97.1% at year end.

Additional current and historical fleet and operating data as well as macroeconomic data related to Rail’s business can be found on the last page of this press release.

SPECIALTY

Specialty reported segment profit of $13.2 million in the third quarter of 2009 compared to $31.9 million in third quarter 2008. Year to date, Specialty reported segment profit of $43.5 million, compared to $92.4 million in the same period in 2008. The year-over-year decline in segment profit was primarily due to decreased remarketing income and lower share of affiliates’ earnings as the marine market remains soft compared to recent years and certain vessels were inactive for repairs.

The Specialty portfolio currently consists of $676.9 million of owned assets (including on and off balance sheet assets) and third-party managed portfolios totaling $262.3 million.

AMERICAN STEAMSHIP COMPANY

American Steamship Company (ASC) reported segment profit of $1.3 million in the third quarter 2009 compared to $13.9 million in the third quarter 2008. Segment profit year-to-date 2009 was $10.1 million, which included income of $5.6 million from receipt of a litigation settlement in the first quarter 2009. These results compare to segment profit of $19.8 million year-to-date 2008, which was negatively impacted by $2.9 million in the second quarter 2008 when ASC received an adverse ruling in a litigation matter. Steel mill capacity utilization is down dramatically from the prior year and ASC’s tonnage volumes have declined accordingly. Year-to-date 2009, ASC has carried 12.6 million net tons compared to 26.6 million net tons carried year-to-date 2008, with the most significant decline evident in iron ore shipments.

COMPANY DESCRIPTION

GATX Corporation (NYSE:GMT) provides leasing and related services to customers operating rail, marine and other targeted assets. GATX is a leader in leasing transportation assets and controls one of the largest railcar fleets in the world. Applying over a century of operating experience and strong market and asset expertise, GATX provides quality assets and services to customers worldwide. GATX has been headquartered in Chicago, Illinois since its founding in 1898 and has traded on the New York Stock Exchange since 1916. For more information, visit the Company’s website at www.gatx.com.

TELECONFERENCE INFORMATION

GATX Corporation will host a teleconference to discuss 2009 third quarter results. Teleconference details are as follows:

Call-in details, a copy of this press release and real-time audio access are available at www.gatx.com. Please access the call 15 minutes prior to the start time. Following the call, a replay will be available on the same site.

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 for the year ended December 31, 2008, Quarterly Report on Form 10-Q for the quarter ended June 30, 2009 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, industrial 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 and financing costs; regulatory rulings that may impact the economic value and operating costs of assets; costs associated with maintenance initiatives; 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 opportunity for remarketing income; 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.

Investor, corporate, financial, historical financial, photographic and news release information may be found at www.gatx.com.

(10/22/09)

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