Investments in Affliliated Companies

9 Months Ended

Sep. 30, 2013

Investments in and Advances to Affiliates, Schedule of Investments [Abstract]

Investments in and Advances to Affiliates, Schedule of Investments [Text Block]

Investments in Affiliated Companies

Investments in affiliated companies represent investments in and loans to domestic and foreign affiliates that are in businesses similar to those of GATX, primarily companies offering lease financing and related services for customers operating rail and marine assets, as well as companies that lease aircraft engines. 

In the third quarter of 2013, we sold our 37.5% interest in AAE Ahaus Alstätter Eisenbahn Cargo AG (“AAE”) to our partner, AAE Ahaus Alstätter Eisenbahn Holding AG (“AAE Holding”) and recognized a pre-tax gain of $9.3 million, which is reported as part of share of affiliates' earnings. The sale price of €84.5 million ($114.1 million) consisted of a cash payment at closing of €17.0 million ($23.0 million) and a seller loan in the amount of €67.5 million ($91.1 million) at a market interest rate. The loan has an initial term of one year, with two six-month extensions at AAE Holding's option. If AAE Holding exercises one or both of its extension options, the interest rate will adjust to a higher rate for the extension period. The loan is secured by a pledge of all AAE shares sold by us to AAE Holding. The loan agreement also contains customary affirmative and negative covenants, including financial covenants related to AAE's tangible net worth, leverage and interest cover. At its option, AAE Holding may prepay the loan, in whole or in part, at any time, and AAE Holding has informed us that they are working on various financing alternatives to repay the loan prior to maturity. As a result of this sale, we are now better positioned to independently pursue growth opportunities in the European rail market through our wholly-owned business, GATX Rail Europe.