11-K 1 c86388e11vk.txt ANNUAL REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------------------- FORM 11-K [x] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2003 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ COMMISSION FILE NUMBER 1-2328 ---------------------------- A. Full title of the plan and the address of the plan, if different from that of the issuer named below: GATX CORPORATION HOURLY EMPLOYEES RETIREMENT SAVINGS PLAN B. Name of the issuer of the securities held pursuant to the plan and the address of its principal executive office: GATX CORPORATION 500 West Monroe Street Chicago, Illinois 60661-3676 GATX CORPORATION HOURLY EMPLOYEES RETIREMENT SAVINGS PLAN INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM........................3 FINANCIAL STATEMENTS: Statements of Assets Available for Benefits...............................4 Statement of Changes in Assets Available for Benefits.....................5 Notes to Financial Statements..................................................6 SUPPLEMENTAL SCHEDULE: Schedule H, Line 4i - Schedule of Assets (Held at End of Year)...........12 Other schedules required by Section 2520.103-10 of the Departments of Labor's Rules and Regulations for Reporting and Disclosure under ERISA have been omitted because they are not applicable. SIGNATURE.....................................................................13 EXHIBIT INDEX.................................................................14 2 Report of Independent Registered Public Accounting Firm Employee Benefits Committee GATX Corporation We have audited the accompanying statements of assets available for benefits of the GATX Corporation Hourly Employees Retirement Savings Plan (the Plan) as of December 31, 2003 and 2002, and the related statements of changes in assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the assets available for benefits of the Plan at December 31, 2003 and 2002, and the changes in its assets available for benefits for the years then ended, in conformity with U.S. generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2003, is presented for purposes of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in our audits of the financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. May 14, 2004 Ernst & Young LLP Chicago, Illinois 3 EIN 36-1124040 Plan #004 GATX Corporation Hourly Employees Retirement Savings Plan Statements of Assets Available for Benefits
DECEMBER 31 2003 2002 ---------------------------- ASSETS Investments $4,539,842 $4,495,293 Interest in Master Trust 776,978 525,229 ---------------------------- $5,316,820 $5,020,522 ============================
See notes to financial statements. 4 EIN 36-1124040 Plan #004 GATX Corporation Hourly Employees Retirement Savings Plan Statements of Changes in Assets Available for Benefits
YEAR ENDED DECEMBER 31 2003 2002 -------------------------------- ADDITIONS Contributions from GATX Corporation and subsidiaries $ 83,477 $ 81,457 Participant salary deferrals 271,931 264,918 Rollover contributions 1,455 -- Interest and dividend income 177,693 168,868 -------------------------------- 534,556 515,243 DEDUCTIONS Benefit payments (934,178) (1,684,268) Administrative fee (2,285) (1,289) Transfer to GATX Corporation Salaried Employees Retirement Savings Plan -- (31,398) -------------------------------- (936,463) (1,716,955) Net investment gain (loss) from Master Trust 187,822 (194,161) Net realized and unrealized appreciation (depreciation) in fair value of investments 510,383 (608,957) -------------------------------- Net increase (decrease) 296,298 (2,004,830) Assets available for benefits: Beginning of year 5,020,522 7,025,352 -------------------------------- End of year $ 5,316,820 $ 5,020,522 ===============================
See notes to financial statements. 5 EIN 36-1124040 Plan #004 GATX Corporation Hourly Employees Retirement Savings Plan Notes to Financial Statements Years ended December 31, 2003 and 2002 1. DESCRIPTION OF THE PLAN The following description of the GATX Corporation (GATX or the Company) Hourly Employees Retirement Savings Plan (the Plan) provides only general information. Participants should refer to the Plan document for a more complete description of the Plan's provisions. GENERAL The Plan is a defined-contribution plan, established January 1, 1994, for hourly union employees of the GATX Rail Corporation who have completed at least 520 hours of service within the last 12 months. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). CONTRIBUTIONS Each year, participants may contribute between 1% and 15% of pretax annual compensation, as defined in the Plan. Participants may also contribute amounts representing distributions from other qualified defined-benefit or defined-contribution plans. For participants at various union locations, the Company contributes on behalf of the participants a matching contribution of $0.50 for each $1.00 contributed by a participant, up to 3% of participants' deferrals, and an additional $0.25 for each $1.00 on the next 3% of participants' deferrals. At its discretion, the Company may contribute an additional matching contribution to eligible participants. Company contributions are invested in the GATX Stock Fund, which is comprised of GATX common stock and short-term investments. All contributions are made in cash and are deposited weekly. Effective May 1, 2003, participants with two or more years of service may elect to have their match invested in any investment offered by the Plan and may transfer all or a portion of their existing Company matching contribution account from the GATX Stock Fund to any of the other investment funds offered by the Plan. For the period May 1, 2002 through March 1, 2003, participants with five or more years of service could transfer all or a portion of their Company matching contribution accounts from the GATX Stock Fund to any of the other investment funds opened by the Plan. 6 GATX Corporation Hourly Employees Retirement Savings Plan Notes to Financial Statements (continued) 1. DESCRIPTION OF THE PLAN (CONTINUED) PARTICIPANT ACCOUNTS Each participant's account is credited with the participant's contributions, Company contributions, and allocation of Plan earnings (losses). Allocations are based on account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant's account. VESTING Participants are immediately 100% vested in their account balance. INVESTMENT OPTIONS Investment alternatives for participant contributions consist of selected fund options available through Fidelity Management Trust Company. Participants may change their investment options on any business day. BENEFIT PAYMENTS In the event of retirement (as defined), death, permanent disability, or termination of employment, the vested balance in the participant's account will be distributed to the participant or the participant's beneficiary in a single lump-sum cash payment. The portion of the participant's account invested in GATX stock may be distributed in kind. In-service withdrawals are available to participants for immediate and heavy financial need (as defined). The Plan also allows for age 59 1/2 withdrawals, as defined. ADMINISTRATIVE EXPENSES It is the intent of the Company to pay the administrative expenses of the Plan, but if the Company fails to make the payments, or so directs, there may be a charge against the Plan for these expenses. 7 GATX Corporation Hourly Employees Retirement Savings Plan Notes to Financial Statements (continued) 1. DESCRIPTION OF THE PLAN (CONTINUED) PARTICIPANT LOANS Participants may borrow an amount up to the lesser of $50,000 or 50% of their account balance. Such loans, which are payable over a term specified by the Plan, bear interest at a reasonable rate and are secured by a participant's account balance in the Plan. PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan to terminate the Plan subject to the provisions of ERISA. In the event of termination, participants will remain 100% vested in their accounts. 2. SIGNIFICANT ACCOUNTING POLICIES INVESTMENT VALUATION AND INCOME RECOGNITION The Plan's beneficial interest in the Master Trust represents the Plan's share of the Master Trust's investments stated at fair value and is determined by quoted market prices. Shares of mutual funds are valued at quoted market prices, which represent the net asset values of shares held by the Plan at year-end. The fair value of the Plan's investment in common collective trusts is based on the quoted redemption value on the last business day of the Plan year. Shares of common stock are stated at fair value, which is determined by quoted market prices. The GATX Stock Fund (the Fund) is tracked on a unitized basis. The Fund consists of GATX common stock and funds held in the Fidelity Cash Reserves Fund sufficient to meet the Fund's daily cash needs. Unitizing the Fund allows for daily trades. The value of a unit reflects the combined market value of GATX common stock and the cash investments held by the Fund. At December 31, 2003, 50,849 units were outstanding with a value of $15.28 per unit (44,853 units were outstanding with a value of $11.71 per unit at December 31, 2002). Participant loans are valued at their outstanding balances, which approximates fair value. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. CONTRIBUTIONS Participant contributions are made through payroll deductions and recorded in the period the deductions are made. 8 GATX Corporation Hourly Employees Retirement Savings Plan Notes to Financial Statements (continued) 2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) USE OF ESTIMATES The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires the plan administrator to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. 3. RISKS AND UNCERTAINTIES The Plan invests in various investment securities. Investment securities are exposed to various risks, such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants' account balances and the amounts reported in the statements of assets available for benefits. 4. INVESTMENTS Except for investments held in a Master Trust (see Note 5), the Plan held the following individual investments representing 5% or more of Plan assets:
DECEMBER 31 2003 2002 ---------------------------- At fair value: Fidelity Managed Income Portfolio II $1,606,051 $1,762,051 Spartan U.S. Equity Index Fund 1,594,042 1,284,352 Fidelity Equity-Income Fund 415,640 318,244 PIMCO Total Return Fund - Administrative Class 399,480 396,821
5. MASTER TRUST The GATX Stock Fund is in a Master Trust, which includes assets of the Plan and the GATX Corporation Salaried Employees Retirement Savings Plan. The Plan's investment in the Master Trust is stated at the Plan's equity in the net assets of the Master Trust at December 31, 2003 and 2002. 9 GATX Corporation Hourly Employees Retirement Savings Plan Notes to Financial Statements (continued) 5. MASTER TRUST (CONTINUED) A summary of the net assets and the changes in net assets of the Master Trust is as follows:
DECEMBER 31 2003 2002 ---------------------------------- ASSETS GATX Corporation common stock $ 36,454,441 $ 32,297,504 Other receivables 223,151 60,509 LIABILITIES Other payables (40,278) (161,159) ---------------------------------- Net assets $ 36,637,314 $ 32,196,854 ================================== YEAR ENDED DECEMBER 31 2003 2002 ---------------------------------- ADDITIONS Transfers in from participating plans $ 2,000,307 $ 2,352,608 Interest and dividend income 1,705,393 1,891,954 ---------------------------------- 3,705,700 4,244,562 DEDUCTIONS Transfers out to participating plans (5,896,306) (10,820,250) Net realized and unrealized appreciation (depreciation) in fair value of common stock 6,631,066 (13,807,205) ---------------------------------- Net increase (decrease) 4,440,460 (20,382,893) Net assets at beginning of year 32,196,854 52,579,747 ---------------------------------- Net assets at end of year $ 36,637,314 $ 32,196,854 ==================================
The Plan held a 2.1% and 1.7% interest in the Master Trust as of December 31, 2003 and 2002, respectively. 10 GATX Corporation Hourly Employees Retirement Savings Plan Notes to Financial Statements (continued) 6. NONPARTICIPANT-DIRECTED INVESTMENTS Plan information about the net assets and the significant components of the changes in net assets relating to the GATX Stock Fund, which includes participant-directed and nonparticipant-directed investments, is as follows:
DECEMBER 31 2003 2002 --------------------------- Investment, at fair value: Interest in the GATX Stock Fund $776,978 $525,229 =========================== YEAR ENDED DECEMBER 31 2003 2002 --------------------------- Changes in net assets: Company contributions $ 81,534 $ 81,457 Participant contributions 35,415 23,065 Rollover contributions 1,231 -- Interest and dividend income 33,106 30,259 Net realized and unrealized appreciation (depreciation) in fair value of common stock 154,717 (224,335) Benefits paid (33,493) (143,833) Interfund transfers (20,761) (59,329) -------------------------- $251,749 $(292,716) ==========================
7. INCOME TAX STATUS The Plan has received a determination letter from the Internal Revenue Service dated October 22, 2002, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the Code), and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan was amended subsequent to the IRS determination letter. The plan administrator believes the Plan is being operated in compliance with the applicable requirements of the Code and, therefore, believes that the Plan, as amended, is qualified and the related trust is tax-exempt. 8. RELATED PARTY The Plan invests in GATX Corporation common stock. GATX Corporation is the Plan's sponsor, and, therefore, such investments are party-in-interest transactions. 11 EIN 36-1124040 Plan #004 GATX Corporation Hourly Employees Retirement Savings Plan Schedule H, Line 4i - Schedule of Assets (Held at End of Year) December 31, 2003
SHARES/ CURRENT IDENTITY OF ISSUER/DESCRIPTION OF ISSUE UNITS VALUE -------------------------------------------------------------------------------------------- Fidelity Management Trust Company*: Fidelity Managed Income Portfolio II 1,606,051 $1,606,051 Spartan U.S. Equity Index Fund 40,448 1,594,042 Fidelity Equity - Income Fund 8,355 415,640 PIMCO Total Return Fund - Administrative Class 37,300 399,480 State Street Research Aurora Fund - Class S 5,024 199,549 Templeton Foreign Fund A 2,966 31,557 Putnam Voyager Fund A 1,590 25,200 Fidelity Freedom 2030 Fund 1,928 24,973 Fidelity Freedom 2010 Fund 1,695 22,066 Delaware Trend Fund - Institutional Class 632 12,438 Fidelity Diversified International Fund 339 8,173 Fidelity Freedom 2000 Fund 201 2,365 Fidelity Freedom Income Fund 108 1,200 Fidelity Freedom 2040 Fund 144 1,095 Fidelity Freedom 2020 Fund 50 661 Vanguard Extended Market Index - Administrative Class 3 67 Participant loans (5% to 11% interest rates, various maturities) -- 195,285 ---------- $4,539,842 ==========
*Party in interest to the Plan. 12 SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed by the undersigned thereunto duly authorized. GATX CORPORATION HOURLY EMPLOYEES RETIREMENT SAVINGS PLAN (Name of the Plan) /s/ James Conniff ----------------------- James Conniff Plan Administrator Date: June 28, 2004 13 EXHIBIT INDEX The following exhibit is filed as part of this annual report: EXHIBIT ------- 23.1 Consent of Independent Registered Public Accounting Firm 14