Financial Data of Business Segments

9 Months Ended

Sep. 30, 2012

Financial Data of Business Segments

NOTE 12.        Financial Data of Business Segments

GATX leases, operates, manages and remarkets long-lived, widely-used assets primarily in the rail and marine markets. GATX also invests in joint ventures that complement existing business activities. Headquartered in Chicago, Illinois, GATX has three financial reporting segments: Rail, American Steamship Company (“ASC”) and Portfolio Management.

Rail is principally engaged in leasing tank and freight railcars and locomotives. Rail provides railcars primarily pursuant to full-service leases, under which it maintains the railcars, and pays ad valorem taxes and insurance. Rail also offers net leases for railcars and most of its locomotives, in which case the lessee is responsible for maintenance, insurance and taxes.

ASC owns and operates the largest fleet of U.S. flagged self-unloading vessels on the Great Lakes, providing waterborne transportation of dry bulk commodities for a range of industrial customers.

Portfolio Management focuses on maximizing the value of its existing portfolio of wholly-owned and managed assets, which includes identifying opportunities to remarket certain assets. Portfolio Management also seeks to maximize value from its joint ventures and to selectively invest in domestic marine and container related assets.

Segment profit is an internal performance measure used by the Chief Executive Officer to assess the performance of each segment in a given period. Segment profit includes all revenues and GATX’s share of affiliates’ earnings attributable to the segments as well as ownership and operating costs that management believes are directly associated with the maintenance or operation of the revenue earning assets. Operating costs include maintenance costs, marine operating costs and other operating costs such as litigation, asset impairment charges, provisions for losses, environmental costs and asset storage costs. Segment profit excludes selling, general and administrative expenses, income taxes and certain other amounts not allocated to the segments.

GATX allocates debt balances and related interest expense to each segment based upon a pre-determined fixed recourse leverage level expressed as a ratio of recourse debt (including off balance sheet debt) to equity. The leverage levels for Rail, ASC and Portfolio Management are set at 4:1, 1.5:1 and 3:1, respectively. Management believes that by utilizing this leverage and interest expense allocation methodology, each operating segment’s financial performance reflects appropriate risk-adjusted borrowing costs.

The following tables depict the profitability, financial position and capital expenditures of each of GATX’s business segments for the three and nine months ended September 30, 2012 and 2011 (in millions):

	Rail			ASC		Portfolio Management		Other			GATX Consolidated
Three Months Ended September 30, 2012
Profitability
Revenues	$	245.2		$	80.2	$	17.8	$	0.2		$	343.4
Share of affiliates’ earnings		4.3			—		14.8		—			19.1
Total gross income		249.5			80.2		32.6		0.2			362.5
Ownership costs		114.9			7.1		12.5		1.8			136.3
Other costs and expenses		71.1			59.9		5.1		(0.1	)		136.0
Segment profit (loss)	$	63.5		$	13.2	$	15.0	$	(1.5	)		90.2
SG&A												38.6
Income before income taxes											$	51.6
Capital Expenditures
Portfolio investments and capital additions	$	123.3		$	0.3	$	6.3	$	1.7		$	131.6
Selected Balance Sheet Data at September 30, 2012
Investments in affiliated companies	$	126.2		$	—	$	406.1	$	—		$	532.3
Identifiable assets	$	4,553.4		$	290.6	$	815.1	$	466.0		$	6,125.1
Three Months Ended September 30, 2011
Profitability
Revenues	$	242.6		$	71.3	$	23.7	$	0.3		$	337.9
Share of affiliates’ earnings		(2.0	)		—		3.8		—			1.8
Total gross income		240.6			71.3		27.5		0.3			339.7
Ownership costs		111.8			5.6		12.1		0.8			130.3
Other costs and expenses		65.8			57.2		3.9		0.3			127.2
Segment profit (loss)	$	63.0		$	8.5	$	11.5	$	(0.8	)		82.2
SG&A												38.5
Income before income taxes											$	43.7
Capital Expenditures
Portfolio investments and capital additions	$	133.8		$	3.3	$	62.1	$	0.8		$	200.0
Selected Balance Sheet Data at December 31, 2011
Investments in affiliated companies	$	163.0		$	—	$	384.5	$	—		$	547.5
Identifiable assets	$	4,448.6		$	286.3	$	862.0	$	159.6		$	5,756.5

	Rail			ASC		Portfolio Management		Other			GATX Consolidated
Nine Months Ended September 30, 2012
Profitability
Revenues	$	736.0		$	169.2	$	65.0	$	0.7		$	970.9
Share of affiliates’ earnings		(12.2	)		—		35.5		—			23.3
Total gross income		723.8			169.2		100.5		0.7			994.2
Ownership costs		342.9			15.9		37.0		3.8			399.6
Other costs and expenses		209.2			124.0		11.9		—			345.1
Segment profit (loss)	$	171.7		$	29.3	$	51.6	$	(3.1	)		249.5
SG&A												115.6
Income before income taxes											$	133.9
Capital Expenditures
Portfolio investments and capital additions	$	443.9		$	11.7	$	62.8	$	5.0		$	523.4
Nine Months Ended September 30, 2011
Profitability
Revenues	$	717.1		$	142.2	$	57.2	$	1.0		$	917.5
Share of affiliates’ earnings		13.4			—		20.5		—			33.9
Total gross income		730.5			142.2		77.7		1.0			951.4
Ownership costs		341.3			13.5		36.1		2.9			393.8
Other costs and expenses		217.9			110.8		10.6		0.8			340.1
Segment profit (loss)	$	171.3		$	17.9	$	31.0	$	(2.7	)		217.5
SG&A												112.3
Income before income taxes											$	105.2
Capital Expenditures
Portfolio investments and capital additions	$	290.1		$	15.9	$	151.4	$	2.7		$	460.1