Fair Value Disclosure (Tables)

12 Months Ended

Dec. 31, 2015

Fair Value Disclosures [Abstract]

Assets and liabilities at fair value recurring basis

The following tables show our assets and liabilities that are measured at fair value on a recurring basis (in millions):

Assets	Total December 31 2015		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Interest rate derivatives (1)	$	1.8	$	—	$	1.8	$	—
Foreign exchange rate derivatives (1)	10.2		—		10.2		—
Foreign exchange rate derivatives (2)	0.8		—		0.8		—
Available-for-sale equity securities	3.3		3.3		—		—
Liabilities
Interest rate derivatives (1)	1.2		—		1.2		—
Foreign exchange rate derivatives (1)	0.2		—		0.2		—
Foreign exchange rate derivatives (2)	2.4		—		2.4		—

Assets	Total December 31 2014		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Interest rate derivatives (1)	$	1.8	$	—	$	1.8	$	—
Foreign exchange rate derivatives (2)	9.7		—		9.7		—
Available-for-sale equity securities	4.4		4.4		—		—
Liabilities
Interest rate derivatives (1)	5.9		—		5.9		—
Foreign exchange rate derivatives (2)	1.6		—		1.6		—

_________

(1) Designated as hedges.

(2) Not designated as hedges.

Non-recurring Level 3 fair value measurements

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Impact of GATX's Derivative Instrument On Income Statement and Other comprehensive income (loss)

Derivative instruments

Fair Value Hedges

We use interest rate swaps to manage the fixed-to-floating rate mix of our debt obligations by converting the fixed rate debt to floating rate debt. For fair value hedges, we recognize changes in fair value of both the derivative and the hedged item as interest expense. We had eight instruments outstanding with an aggregate notional amount of $550.0 million as of December 31, 2015 that mature from 2017 to 2020 and eight instruments outstanding with an aggregate notional amount of $600.0 million as of December 31, 2014.

Cash Flow Hedges

We use interest rate swaps to convert floating rate debt to fixed rate debt. We use Treasury rate locks to hedge our exposure to interest rate risk on anticipated transactions. We also use currency swaps to hedge our exposure to fluctuations in the exchange rates of the foreign currencies in which we conduct business. We had ten instruments outstanding with an aggregate notional amount of $442.9 million as of December 31, 2015 that mature from 2016 to 2022 and seven instruments outstanding with an aggregate notional amount of $281.5 million as of December 31, 2014. Within the next 12 months, we expect to reclassify $5.8 million ($3.6 million after-tax) of net losses on previously terminated derivatives from accumulated other comprehensive income (loss) to interest expense or operating lease expense, as applicable. We reclassify these amounts when interest and operating lease expense on the related hedged transactions affect earnings.

Non-designated Derivatives

We do not hold derivative financial instruments for purposes other than hedging, although certain of our derivatives are not designated as accounting hedges. We recognize changes in the fair value of these derivatives in other (income) expense immediately.

Some of our derivative instruments contain credit risk provisions that could require us to make immediate payment on net liability positions in the event that we default on certain outstanding debt obligations. The aggregate fair value of our derivative instruments with credit risk related contingent features that are in a liability position as of December 31, 2015 was $1.4 million. We are not required to post any collateral on our derivative instruments and do not expect the credit risk provisions to be triggered.

In the event that a counterparty fails to meet the terms of an interest rate swap agreement or a foreign exchange contract, our exposure is limited to the fair value of the swap, if in our favor. We manage the credit risk of counterparties by transacting with institutions that we consider financially sound and by avoiding concentrations of risk with a single counterparty. We believe that the risk of non-performance by any of our counterparties is remote.

The following table shows the impacts of our derivative instruments on our statement of comprehensive income for the years ended December 31 (in millions):

Derivative Designation	Location of Loss (Gain) Recognized	2015			2014			2013
Fair value hedges (1)	Interest expense	$	(0.8	)	$	4.7		$	4.9
Cash flow hedges	Other comprehensive loss (effective portion)	5.3			5.1			(0.7		)
Cash flow hedges	Interest expense (effective portion reclassified from accumulated other comprehensive loss)	5.6			4.9			5.1
Cash flow hedges	Operating lease expense (effective portion reclassified from accumulated other comprehensive loss)	0.3			3.2			1.5
Cash flow hedges (2)	Other (income) expense (effective portion reclassified from accumulated other comprehensive loss)	(6.9		)	(2.1		)	—
Non-designated (3)	Other (income) expense	(6.1		)	(11.4		)	(0.6		)

_________

(1) The fair value adjustments related to the underlying debt equally offset the amounts recognized in interest expense.

(2) For 2015 and 2014, includes $6.1 million and $2.1 million of gains on foreign currency derivatives which are substantially offset by losses from foreign currency remeasurement adjustments, also recognized in Other (income) expense.

(3) For 2015 and 2014, includes $5.1 million, and $10.4 million of gains on foreign currency derivatives which substantially offset losses from foreign currency remeasurement adjustments on the AAE loan, also recognized in Other (income) expense.

Fair Value Other Financial Instruments

The following table shows the carrying amounts and fair values of our other financial instruments as of December 31 (in millions):

	2015		2015		2014		2014
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets
Investment funds	$	0.6	$	1.2	$	1.5	$	2.4
Loans	8.8		8.7		97.3		97.4
Liabilities
Recourse fixed rate debt	$	3,915.0	$	3,882.6	$	3,639.9	$	3,775.0
Recourse floating rate debt	275.2		264.6		540.0		540.0
Nonrecourse debt	6.9		7.1		15.9		16.6