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<SEC-DOCUMENT>0000950137-02-001493.txt : 20020415
<SEC-HEADER>0000950137-02-001493.hdr.sgml : 20020415
ACCESSION NUMBER:		0000950137-02-001493
CONFORMED SUBMISSION TYPE:	10-K
PUBLIC DOCUMENT COUNT:		7
CONFORMED PERIOD OF REPORT:	20011231
FILED AS OF DATE:		20020322

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			GATX CORP
		CENTRAL INDEX KEY:			0000040211
		STANDARD INDUSTRIAL CLASSIFICATION:	TRANSPORTATION SERVICES [4700]
		IRS NUMBER:				361124040
		STATE OF INCORPORATION:			NY
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-02328
		FILM NUMBER:		02582902

	BUSINESS ADDRESS:	
		STREET 1:		500 W MONROE  ST
		CITY:			CHICAGO
		STATE:			IL
		ZIP:			60661
		BUSINESS PHONE:		3126216200

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	GENERAL AMERICAN TRANSPORTATION CORP
		DATE OF NAME CHANGE:	19750722
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>c67993e10-k.txt
<DESCRIPTION>ANNUAL REPORT
<TEXT>
<PAGE>

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                             ---------------------

                                   FORM 10-K

<Table>
<S>          <C>
    [X]            ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                         THE SECURITIES EXCHANGE ACT OF 1934



                     FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001



                                   OR




    [ ]           TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                        OF THE SECURITIES EXCHANGE ACT OF 1934
</Table>

                         COMMISSION FILE NUMBER 1-2328

                             ---------------------
                                GATX CORPORATION

<Table>
<S>                                            <C>
             INCORPORATED IN THE                     IRS EMPLOYER IDENTIFICATION NUMBER
              STATE OF NEW YORK                                  36-1124040
</Table>

                             500 WEST MONROE STREET
                               CHICAGO, IL 60661
                                 (312) 621-6200

          SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

<Table>
<Caption>
                                                                  NAME OF EACH EXCHANGE
            TITLE OF EACH CLASS OR SERIES                          ON WHICH REGISTERED
            -----------------------------                         ---------------------
<S>                                                     <C>
Common Stock                                                New York Stock Exchange
                                                             Chicago Stock Exchange
$2.50 Cumulative Convertible Preferred Stock, Series A      New York Stock Exchange
                                                             Chicago Stock Exchange
$2.50 Cumulative Convertible Preferred Stock, Series B      New York Stock Exchange
                                                             Chicago Stock Exchange
</Table>

          SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
                                      NONE

     Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes [X]     No [ ]

     As of March 8, 2002, 48,787,524 common shares were outstanding, and the
aggregate market value of the common shares (based upon the March 8, 2002,
closing price of these shares on the New York Stock Exchange) of GATX
Corporation held by non-affiliates was approximately $1,567.5 million.

                      DOCUMENTS INCORPORATED BY REFERENCE

     Portions of GATX's proxy statement dated March 22, 2002 are incorporated by
reference into Part III.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

                           INDEX TO GATX CORPORATION

                                 2001 FORM 10-K

<Table>
<Caption>
ITEM NO.                                                                PAGE NO.
- --------                                                                --------
<S>       <C>                                                           <C>
                                     PART I
Item 1.   Business....................................................      2
          Business Segments...........................................      2
            Financial Services........................................      2
            GATX Rail.................................................      3
            Discontinued Operations -- Integrated Solutions Group.....      4
          Trademarks, Patents, and Research Activities................      4
          Seasonal Nature of Business.................................      4
          Customer Base...............................................      5
          Employees...................................................      5
          Environmental Matters.......................................      5
          Risk Factors................................................      6
Item 2.   Properties..................................................      8
Item 3.   Legal Proceedings...........................................      9
Item 4.   Submission of Matters to a Vote of Security Holders.........     10
          Executive Officers of the Registrant........................     10

                                    PART II
Item 5.   Market for the Registrant's Common Stock and Related
          Shareholder Matters.........................................     11
Item 6.   Selected Consolidated Financial Data -- Five-Year Summary...     12
Item 7.   Management's Discussion and Analysis of Financial Condition
          and Results of Operations...................................     13
            Year Ended December 31, 2001 Compared to Year Ended
               December 31, 2000......................................     13
            Year Ended December 31, 2000 Compared to Year Ended
               December 31, 1999......................................     17
          Balance Sheet Discussion....................................     19
          Cash Flow Discussion........................................     22
          Liquidity and Capital Resources.............................     23
          Other Information...........................................     26
          Critical Accounting Policies................................     27
          New Accounting Pronouncements...............................     27
Item 7A.  Quantitative and Qualitative Disclosures about Market
          Risk........................................................     29
Item 8.   Financial Statements and Supplementary Data.................     30
Item 9.   Changes in and Disagreements with Accountants on Accounting
          and Financial Disclosure....................................     67

                                    PART III
Item 10.  Directors and Executive Officers of the Registrant..........     67
Item 11.  Executive Compensation......................................     67
Item 12.  Security Ownership of Certain Beneficial Owners and
          Management..................................................     67
Item 13.  Certain Relationships and Related Transactions..............     67

                                    PART IV
Item 14.  Exhibits, Financial Statement Schedules and Reports on Form
          8-K.........................................................     68
</Table>

                                        1
<PAGE>

                                     PART I

ITEM 1. BUSINESS

     During 2000 and 2001, GATX Corporation (GATX or the Company) redefined its
strategic focus and undertook certain initiatives to position itself as a
specialized finance and leasing company. To accomplish this goal, a decision was
made to exit the businesses of the former GATX Integrated Solution Group (ISG)
segment. As of December 31, 2001, GATX had substantially completed the sale of
these ISG businesses. The ISG segment was comprised of GATX Terminals
Corporation (Terminals), GATX Logistics, Inc. (Logistics) and minor business
development efforts. As a result of these actions, the financial data for the
ISG segment is presented as discontinued operations for all periods shown.

     GATX is headquartered in Chicago, Illinois and provides its services and
products through two operating segments: Financial Services and GATX Rail.
Through these businesses, GATX combines asset knowledge and services,
structuring expertise, partnering and risk capital to serve customers and
partners worldwide. GATX specializes in railcar and locomotive leasing, aircraft
leasing, information technology leasing, venture leasing and finance, and the
leasing and portfolio management of other large ticket assets.

     In prior years, the Financial Services segment included a rail business
unit, which leased freight cars and locomotives under operating and finance
leases. In 2001, GATX combined into one segment the rail business unit of
Financial Services with GATX Rail, a full service lessor of railcars, primarily
tank cars. The financial data for GATX Rail and Financial Services has been
restated for all periods presented to reflect the change in the composition of
each operating segment.

     In August 2001, GATX completed a realignment of the legal structure of its
subsidiary companies. The new structure combined GATX's principal subsidiaries,
GATX Rail Corporation and GATX Capital Corporation, into a single legal entity
that was renamed GATX Financial Corporation (GFC).

     At December 31, 2001, GATX had on balance sheet assets of $6.1 billion,
primarily operating assets such as railcars, commercial aircraft and information
technology equipment. In addition to the $6.1 billion of assets recorded on the
balance sheet, GATX utilizes approximately $1.6 billion of other assets, such as
railcars and aircraft, which were financed with operating leases and therefore
are not recorded on the balance sheet.

BUSINESS SEGMENTS

                               FINANCIAL SERVICES

     Financial Services provides financing for equipment and other capital
assets on a worldwide basis. These financings, which are held within Financial
Services' own portfolio and through partnerships with co-investors, are
structured as leases and secured loans, and frequently include interests in an
asset's residual value and warrants of non-public companies. Financial Services
also generates fee-based income through transaction structuring and portfolio
management services. Fees are earned at the time a transaction is completed, an
asset is remarketed, and/or on an ongoing basis in the case of portfolio
management activities.

     Headquartered in San Francisco, California, Financial Services consists of
four business units: Air, Technology, Venture Finance and Specialty Finance.

     The Air business unit primarily leases newer, narrow-body aircraft used by
commercial airlines throughout the world. Financial Services has an interest in
173 aircraft. Of these, 24 aircraft are wholly owned by Financial Services and
the remainder are owned in combination with other investors. All of the 173
aircraft are in compliance with generally applicable noise standards (Stage III)
and have an average age of approximately nine years. These aircraft have an
estimated useful life of approximately 25 years. For aircraft currently on
lease, the average remaining lease term is approximately four years. Financial
Services' customer base is diverse in carrier type and geographic location.
Financial Services leases to over 50 airlines in 20 countries and is not highly
dependent on any one airline; no single customer exposure exceeds 10% of the net
book value of the total air portfolio (including off balance sheet assets).
Financial Services purchases its aircraft from two manufacturers, Airbus
Industrie (Airbus) and The Boeing Company (Boeing). See

                                        2
<PAGE>

discussion in the OTHER INFORMATION section of Management's Discussion and
Analysis and in the RISK FACTORS section of Part I of this document for
additional details regarding the air portfolio.

     The Technology business unit provides lease financing and asset management
services related to information technology (IT) equipment, primarily to Fortune
1000 companies, including companies within the professional services,
healthcare, industrial and food industries. The equipment leased to customers
includes personal computers, servers, mainframes and mid-range equipment.
Financial Services purchases equipment from a number of manufacturers and
vendors and is therefore not dependent on a single provider. In 2001, Financial
Services acquired a portfolio of IT equipment leases from El Camino Resources
for approximately $372.5 million, including the assumption of $256.0 million of
nonrecourse debt. IT equipment is typically depreciated over the lease term,
which is approximately 2-5 years. The average size of an IT lease transaction is
approximately $200,000. Financial Services is not dependent on any single
customer.

     The Venture Finance business unit provides secured loan and lease financing
to early-stage, venture-backed companies. The financing is typically secured by
specific equipment and/or by a lien on the customer's property, including
intellectual property. Additionally, the financings frequently include warrants
of non-public companies. In recent years, the Venture Finance portfolio included
leases and loans to a number of telecommunication (telecom) companies. However,
due to the poor performance of the telecom market, Venture Finance has exited
the telecom financing business and has reduced its exposure to $20.3 million.
Currently, Venture Finance has a highly diversified portfolio and provides
financings to customers in a variety of industries, including pharmaceutical and
life sciences, software and network equipment, and other business services.
Venture capital firms are a critical source of new financings and Financial
Services has long-standing relationships with leading venture capital firms.
Financial Services typically limits transaction size to an average of $2.0
million per customer, and is therefore not dependent on, nor has concentration
of risk with respect to, any single customer.

     The Specialty Finance business unit acts as an investor, arranger and
manager of financing services involving a variety of asset types and industries,
with an established presence in the marine business. Specialty Finance also
manages $1.1 billion of assets for third-party clients. The majority of these
managed assets are in markets which Financial Services has a high level of
expertise, such as air and rail. In addition, Financial Services, through
American Steamship Company, operates a fleet of self-unloading vessels on the
Great Lakes.

     Financial Services primarily competes with captive leasing companies,
leasing subsidiaries of commercial banks, independent leasing companies, lease
brokers, investment bankers, financing arms of equipment manufacturers, and
other Great Lakes captive and commercial fleets. No single customer accounts for
more than 5% of Financial Services' revenues. In addition to its San Francisco
home office, Financial Services has 7 domestic and 7 foreign offices.

                                   GATX RAIL

     GATX Rail (Rail) is headquartered in Chicago, Illinois and is principally
engaged in leasing rail equipment, including tank cars, freight cars and
locomotives. Rail provides both full service leases and net leases. Under a net
lease, the lessee is responsible for maintenance, insurance and taxes. Under its
full service leases, Rail maintains and services its railcars, pays ad valorem
taxes, and provides many ancillary services. Rail owns, or has an interest in,
approximately 164,000 railcars worldwide. As of December 31, 2001, Rail owned or
had an interest in approximately 129,000 railcars in North America, comprised of
71,000 tank cars and 58,000 specialized freight cars. Rail's fleet has a
depreciable life of 20 to 38 years and an average age of approximately 16 years.
The utilization rate of Rail's wholly owned North American railcar fleet at
December 31, 2001 was approximately 91%. Rail also owns or has an interest in
approximately 900 locomotives. The utilization rate for Rail's locomotives at
December 31, 2001 was 82%.

     In March 2001, Rail purchased Dyrekcja Eksploatacji Cystern (DEC), Poland's
national tank car fleet. DEC assets include 11,000 tank cars and a railcar
maintenance network. Rail also has an interest in two other European railcar
fleets through its investments in affiliated companies. Rail owns a 49.5%
interest in KVG Kesselwagen Vermietgesellschaft mbH, a German- and
Austrian-based tank car leasing company with
                                        3
<PAGE>

approximately 8,000 cars, and a 37.5% interest in AAE Cargo, a freight car
lessor headquartered in Switzerland, with approximately 15,000 cars.
Additionally, Rail has an interest in 1,300 other railcars.

     In North America, Rail's customers use its railcars to ship over 900
different commodities, principally chemicals, petroleum, and food products. For
2001, approximately 36% of railcar leasing revenue was attributable to shipments
of chemical products, 24% related to shipments of petroleum products, 12%
related to shipments of food, and 28% was derived from the railroad industry and
the shipment of other products. Rail leases railcars to approximately 700
customers, including major chemical, oil, food, agricultural and railroad
companies. No single customer represents more than 3% of total railcar leasing
revenue.

     Rail typically leases new tank cars and specialty freight cars to its
customers for terms of approximately four years. Renewals, or extensions of
existing leases, are typically for periods ranging from less than a year to
seven years with an average lease term of three years. In North America, Rail
purchases most of its new railcars from a limited number of manufacturers,
including Trinity Industries, Inc., a Texas-based manufacturer and American
Railcar Industries, a Missouri-based manufacturer. Rail operates a network of
major service centers in North America and Europe. Rail supplements these major
service centers with smaller service centers and a fleet of service trucks.
Additionally, Rail utilizes independent third-party repair facilities. Two
business offices and four service centers in Poland were added as part of the
DEC acquisition.

     The North American full-service tank car and freight car leasing industry
is comprised of Rail, Union Tank Car Company, General Electric Railcar Services
Corporation, and various financial institutions. At the end of 2001, there were
275,000 tank cars and 1.4 million freight cars owned and leased in the United
States. At December 31, 2001, Rail's fleet was approximately 26% of the tank
cars in North America and 36% of the leased market; and approximately 3% of the
freight cars in North America and 7% of the leased market. As of year-end 2001,
Rail's entire fleet comprised 15% of the total North American leased fleet
market. Principal competitive factors include price, service and availability.

             DISCONTINUED OPERATIONS -- INTEGRATED SOLUTIONS GROUP

     As of December 31, 2001, GATX had substantially completed the divestiture
of its Integrated Solutions Group (ISG). The ISG segment provided logistics and
supply chain services to the chemicals, petroleum, and dry goods industries.

     GATX sold 81% of Logistics in May 2000 and the remaining 19% in December
2000. In the first quarter of 2001, GATX sold the majority of Terminals'
domestic operations. The sale included substantially all of Terminals' domestic
terminaling operations, the Central Florida Pipeline Company and Calnev Pipe
Line Company. Also in the first quarter of 2001, GATX sold substantially all of
Terminals' European operations. In the second and third quarters of 2001,
Terminals sold its Asian operations and its interest in a distillate and
blending distribution affiliate. Additionally, in the first quarter GATX sold or
terminated various smaller supply chain businesses.

TRADEMARKS, PATENTS AND RESEARCH ACTIVITIES

     Patents, trademarks, licenses, and research and development activities are
not material to these businesses taken as a whole.

SEASONAL NATURE OF BUSINESS

     Marine shipping operations are seasonal due to the effects of winter
weather conditions on the Great Lakes. However, seasonality is not considered
significant to the operations of GATX and its subsidiaries taken as a whole.

                                        4
<PAGE>

CUSTOMER BASE

     GATX, as a whole, is not dependent upon a single customer or concentration
among a few customers.

EMPLOYEES

     GATX and its subsidiaries have approximately 1,900 employees, of whom 40%
are hourly employees covered by union contracts.

ENVIRONMENTAL MATTERS

     Certain operations of GATX present potential environmental risks
principally through the transportation of various commodities. Recognizing that
potential risk to the environment is intrinsic to its operations, GATX is
committed to protecting the environment as well as complying with applicable
environmental protection laws and regulations. GATX, as well as its competitors,
is subject to extensive regulation under federal, state and local environmental
laws which have the effect of increasing the costs and liabilities associated
with the conduct of its operations. In addition, GATX's foreign operations are
subject to environmental laws in effect within each respective jurisdiction.

     GATX's policy is to monitor and actively address environmental concerns in
a responsible manner. GATX has received notices from the U.S. Environmental
Protection Agency (EPA) that it is a potentially responsible party (PRP) for
study and cleanup costs at three sites in accordance with the requirements of
the Federal Comprehensive Environmental Response, Compensation and Liability Act
of 1980 (Superfund). Under these Acts and comparable state laws, GATX may be
required to share in the cost to clean up various contaminated sites identified
by the EPA and other agencies. GATX has also received notice that it is a PRP at
one site to undertake a Natural Resource Damage Assessment. In all instances,
GATX is one of a number of financially responsible PRPs and has been identified
as potentially contributing only a small percentage of the contamination at each
of the sites. Due to various factors such as the required level of remediation
or restoration and participation in cleanup or restoration efforts by others,
GATX's total cleanup costs at these sites cannot be predicted with certainty;
however, GATX's best estimates for remediation and restoration of these sites
have been determined and are included in its environmental reserves.

     Future costs of environmental compliance are indeterminable due to unknowns
such as the magnitude of possible contamination, the timing and extent of the
corrective actions that may be required, the determination of the Company's
liability in proportion to other responsible parties, and the extent to which
such costs are recoverable from third parties including insurers. Also, GATX may
incur additional costs relating to facilities and sites where past operations
followed practices and procedures that were considered acceptable at the time
but in the future may require investigation and/or remedial work to ensure
adequate protection to the environment under current or future standards. If
future laws and regulations contain more stringent requirements than presently
anticipated, expenditures may be higher than the estimates, forecasts, and
assessments of potential environmental costs provided below. However, these
costs are expected to be at least equal to the current level of expenditures. In
addition, GATX has provided indemnities for environmental issues to the buyers
of three divested companies for which GATX believes it has adequate reserves.

     In the first quarter of 2001, GATX sold substantially all of the U.S.
terminals and pipeline assets, representing the bulk of Terminals' operations.
The transaction was structured as a sale of the capital stock of Terminals.
Under the terms of the agreement, the buyer assumed various environmental
liabilities associated with the terminals and pipeline assets, and GATX provided
a limited indemnity to the buyer.

     The following information excludes the potential liabilities associated
with the sold Terminals' locations. GATX's environmental reserve at December 31,
2001 was $37.6 million and reflects GATX's best estimate of the cost to
remediate known environmental conditions. Additions to the reserve were $1.7
million and $1.9 million for 2001 and 2000, respectively. Expenditures charged
to the reserve amounted to $15.8 million and $2.9 million in 2001 and 2000,
respectively. In 2001, GATX made capital expenditures of $0.2 million for
environmental and regulatory compliance compared to $0.3 million in 2000.

                                        5
<PAGE>

RISK FACTORS

GATX's businesses are subject to a number of risks which investors should
consider.

     - Air Industry:  The effects of the terrorist attacks on September 11,
       2001, or future events arising as a result of these terrorist attacks,
       including military or police activities in the United States or abroad,
       future terrorist activities or threats of such activities, political
       unrest and instability, riots and protests, could have on the U.S.
       economy, global financial markets and GATX's business cannot presently be
       determined with any accuracy. The effects may include, among other
       things, a permanent decrease in demand for air travel, consolidation in
       the airline industry, lower utilization of new and existing aircraft,
       lower aircraft rental rates, impairment of air portfolio assets and fewer
       available partners for joint ventures. Depending upon the severity, scope
       and duration of these effects, the impact on GATX's financial position,
       results of operations, and cash flows could be material.

     - Liquidity and Capital Resources:  GATX utilizes uncommitted money market
       lines, commercial paper borrowings, unsecured debt and secured debt to
       fund its operations and contractual commitments. Since September 11,
       2001, the borrowing spreads over treasury securities of unsecured debt
       for GATX have significantly increased. As a result of recent rating
       agency downgrades, GATX could incur increased borrowing costs and have
       greater difficulty accessing public and private markets for both secured
       and unsecured debt. GATX will also likely experience much greater
       difficulty in accessing the commercial paper market. If these events or
       further deterioration in the capital markets prevent GATX from accessing
       these funding sources, GATX's other sources of funds, including its bank
       facilities and cash flow from operations and portfolio proceeds, may not
       provide adequate liquidity to fund its operations and contractual
       commitments.

     - Competition:  GATX is subject to competition in its aircraft, rail and
       technology leasing markets. In many cases, the competitors are larger,
       higher-rated entities that have greater financial resources and access to
       lower cost capital than GATX. These factors permit many competitors to
       provide financing at lower rates than GATX.

     - Lease versus Purchase Decision:  GATX's core businesses are reliant upon
       its customers continuing to lease rather than purchase assets. There are
       a number of items that factor into a customer's decision to lease or
       purchase assets, such as tax considerations, balance sheet
       considerations, and operational flexibility. GATX has no control over
       these external considerations and changes in these factors could
       negatively impact demand for its leasing products.

     - Effects of Inflation:  Inflation in railcar rental rates as well as
       inflation in residual values for air and rail equipment have historically
       benefited GATX's financial results. Positive effects of inflation are
       unpredictable as to timing and duration depending on market conditions
       and economic factors.

     - Asset Obsolescence:  GATX's core assets may be subject to functional or
       economic obsolescence. Although GATX believes it is adept at managing
       obsolescence risk, there is no guarantee that changes in various market
       fundamentals will not cause unexpected asset obsolescence in the future.

     - Allowance for Possible Losses:  GATX's allowance for possible losses may
       be inadequate if unexpected adverse changes in the economy occur or
       discrete events adversely affect specific customers, industries or
       markets. If the allowance for possible losses is insufficient to cover
       losses in the receivables portfolio, then GATX's future financial
       position or results of operations could be negatively impacted.

     - Insurance:  The ability to insure its rail and aircraft assets is an
       important aspect of GATX's ability to manage risk in these core
       businesses. There is no guarantee that such insurance will be available
       on a cost-effective basis consistently in the future.

     - Environmental:  GATX is subject to federal and state requirements for
       protection of the environment, including those for discharge of hazardous
       materials and remediation of contaminated sites. GATX routinely assesses
       its environmental exposure, including obligations and commitments for
       remediation of contaminated sites and assessments of ranges and
       probabilities of recoveries from other responsible
                                        6
<PAGE>

       parties. Because of the regulatory complexities and risk of unidentified
       contaminants on its properties, the potential exists for remediation
       costs to be materially different from the costs the Company has
       estimated.

     - Legal Matters:  GATX has from time to time been, and may in the future
       be, named as a defendant in litigation involving personal injury,
       property damage and damage to the environment arising out of incidents in
       which its railcars have been, and may be, involved.

     - Regulation:  GATX's air and rail operations are subject to the
       jurisdiction of a number of federal agencies, including the Department of
       Transportation. State agencies regulate some aspects of rail operations
       with respect to health and safety matters not otherwise preempted by
       federal law. GATX's failure to comply with the requirements and
       regulations of these agencies could negatively affect its operations and
       consequently its profitability.

Additional risks and uncertainties not presently known, or that GATX currently
deems immaterial, may also negatively impact business operations.

                                        7
<PAGE>

ITEM 2.  PROPERTIES

     Information regarding the location and general character of certain
properties of GATX is included in ITEM 1, BUSINESS, of this document. Properties
are suitable and adequate for the current level of the Company's operations.

     At December 31, 2001, locations of operations were as follows:

FINANCIAL SERVICES

HEADQUARTERS
San Francisco, California

BUSINESS OFFICES
Lafayette, California
Farmington, Connecticut
Tampa, Florida
Chicago, Illinois
Williamsville, New York
Toledo, Ohio
Seattle, Washington
Sydney, Australia
Paris, France
Toulouse, France
Frankfurt, Germany
Tokyo, Japan
Zurich, Switzerland
London, United Kingdom

AFFILIATES
Homburg, Germany
Dublin, Ireland
Elstree, United Kingdom
London, United Kingdom
Woking, United Kingdom

GATX RAIL

NORTH AMERICAN
HEADQUARTERS
Chicago, Illinois

EUROPEAN HEADQUARTERS
Zurich, Switzerland

BUSINESS OFFICES
San Francisco, California
Valencia, California
Alpharetta, Georgia
Chicago, Illinois
Marlton, New Jersey
Houston, Texas
Mexico City, Mexico
Calgary, Alberta
Montreal, Quebec
Krakow, Poland
Warsaw, Poland

MAJOR SERVICE CENTERS
Colton, California
Waycross, Georgia
Hearne, Texas
Tierra Blanca, Mexico
Red Deer, Alberta
Sarnia, Ontario
Montreal, Quebec
Moose Jaw, Saskatchewan
Gdansk, Poland
Nowa Wies Wielka, Poland
Ostroda, Poland
Slotwiny, Poland

MINI SERVICE CENTERS
Macon, Georgia
Terre Haute, Indiana
Geismar, Louisiana
Plaquemine, Louisiana
Midland, Michigan
Cincinnati, Ohio
Catoosa, Oklahoma
Copper Hill, Tennessee
Freeport, Texas (2)
Monterrey, Mexico
Czechowice, Poland
Jedlicze, Poland
Nidzica, Poland
Plock, Poland

MOBILE SERVICE UNITS
Mobile, Alabama
Colton, California
Lake City, Florida
Norco, Louisiana
Las Cruces, New Mexico
Albany, New York
Masury, Ohio
Galena Park, Texas
Nederland, Texas
Olympia, Washington
Altamira, Mexico
Edmonton, Alberta
Red Deer, Alberta
Vancouver, British Columbia
Montreal, Quebec
Quebec, Quebec
Moose Jaw, Saskatchewan

AFFILIATES
Vienna, Austria
Hamburg, Germany
Zug, Switzerland

                                        8
<PAGE>

ITEM 3.  LEGAL PROCEEDINGS

     On May 25, 2001, a suit was filed in Civil District Court for the Parish of
Orleans, State of Louisiana, in the matter styled Joseph A. Schneider, et al.
vs. CSX Transportation, Inc., Hercules, Inc., Rhodia, Inc., Oil Mop, L.L.C., The
Public Belt Railroad Commission For The City Of New Orleans, GATX Corporation,
GATX Capital Corporation, The City of New Orleans, and The Alabama Great
Southern Railroad Company, Number 2001-8924. The suit asserts that on May 25,
2000 tank car GATX 16770 leaked the fumes of its cargo, Dimethyl Sulfide, in a
residential area in the western part of the city of New Orleans and that the
tank car was subsequently taken by defendant New Orleans Public Belt Railroad to
another location in the city of New Orleans, where it was later repaired. The
plaintiffs are seeking compensation for alleged personal injuries and property
damages. The petition alleges that a class should be certified.

     During the period from May, 2000 through April, 2001, twenty-two (22) law
suits were filed seeking damages in connection with a May 3, 2000 incident in
which a Burlington Northern Santa Fe Railway Company (Burlington Northern)
train, proceeding through the Louisiana town of New Iberia, derailed several of
its cars. One of the derailed cars was a tank car owned by the GATX Rail
division (Rail) of GATX Financial Corporation, with a cargo of Xylene, which
overturned in the derailment and ruptured when it was struck by an adjacent car.
There was no fire or explosion. Some five hours later, after approximately 500
to 700 gallons of the Xylene had escaped, the rupture in the tank car was
plugged. Additionally, hopper cars, not owned by Rail, were overturned and the
material they contained, Polyvinyl Chloride powder and pellets, spilled out. The
following cases have been filed in the United States District Court for the
Western District of Louisiana: David Theriot, et al v. The Burlington Northern
and Santa Fe Railway Co., et al (No. CV00-1097), David Theriot, et al v. The
Burlington Northern and Santa Fe Railway Co., et al (No. CV01-0861), Janice
Olivier, et al v. The Burlington Northern and Santa Fe Railway Co., et al (No.
CV00-1561), Ethel Taylor, et al v. The Burlington Northern and Santa Fe Railway
Co., et al (No. CV00-1436), Arthur Gregoire, III, et al v. The Burlington
Northern and Santa Fe Railway Co., et al (No. CV00-1188), Peggy Jerac, et al v.
The Burlington Northern and Santa Fe Railway Co., et al (No. CV00-1155), Kenneth
Estilette, et al v. The Burlington Northern and Santa Fe Railway Co., et al (No.
CV00-1170), Gloria Berry, et al v. The Burlington Northern and Santa Fe Railway
Co., et al (No. CV00-1141), Mary Viltz, et al v. The Burlington Northern and
Santa Fe Railway Co., et al (No. CV00-1140), The Burlington Northern and Santa
Fe Railway Co. v. General American Transportation Co., et al (No. CV01-0797),
Nelson J. Badeaux, et al v. The Burlington Northern and Santa Fe Railway Co., et
al (No. CV01-0794), Joseph Rochelle, et al v. The Burlington Northern and Santa
Fe Railway Co., et al (No. CV01-0877), Walter Thompson, et al v. The Burlington
Northern and Santa Fe Railway Co., et al (No. CV01-0878), John H. Bell, et al v.
The Burlington Northern and Santa Fe Railway Co., et al (No. CV01-0876). The
remainder of the cases are filed in the 16th Judicial District Court for the
Parish of Iberia, State of Louisiana as follows: Rebecca Hammons v. The
Burlington Northern and Santa Fe Railway Co., et al, (No. 95710), Phillip Walker
v. The Burlington Northern and Santa Fe Railway Co., et al (No. 95712), Serella
M. Adams, et al v. The Burlington Northern and Santa Fe Railway Co., et al (No.
95711), Barry Bennett v. The Burlington Northern and Santa Fe Railway Co., et al
(No. 95718), Tiny Vallian, et al v. The Burlington Northern and Santa Fe Railway
Co., et al (No. 95861), Edward Martin v. The Burlington Northern and Santa Fe
Railway Co., et al (No. 95665), Janelle Allen, et al v. The Burlington Northern
and Santa Fe Railway Co., et al (No. 95723), Vernice Johnson, et al v. The
Burlington Northern and Santa Fe Railway Co., et al (No. 95617). The suits
collectively name approximately 112 plaintiffs and some assert that a class
should be certified. The Company and certain of the predecessor companies of
GATX Financial Corporation were not added as defendants until May of 2001;
however, discovery and motions with regard to both class certification and
remand have been stayed since August of 2000. The federal court has been
supervising a mediation process that is ongoing at present. If mediation is
unsuccessful, it is anticipated that litigation will actively proceed and that
discovery, the litigating of motions to remand and for class certification and
other such activities will commence.

     In March 2001, East European Kolia-System Financial Consultant S.A. filed a
complaint in the Regional Court (Commercial Division) in Warsaw, Poland against
Dyrekcja Eksploatacji Cystern Sp. z.o.o. (DEC), an indirect wholly owned
subsidiary of GATX Financial Corporation, alleging damages of approximately

                                        9
<PAGE>

$52 million arising out of the unlawful taking over by DEC in August of 1998, of
a 51% interest in Kolsped Spedytor Miedzynarodwy Sp. z.o.o. (Kolsped), and
removal of valuable property from Kolsped. The complaint was not served on DEC
until December of 2001. The plaintiff claims that DEC unlawfully obtained
confirmation of satisfaction of a condition precedent to its purchase of 51%
interest in Kolsped, following which it allegedly mismanaged Kolsped and put it
into bankruptcy. The plaintiff claims to have purchased the same 51% interest in
Kolsped in April of 1999, subsequent to DEC's alleged failure to satisfy the
condition precedent. GATX purchased DEC in March 2001 and believes this claim is
without merit, and is vigorously pursuing the defense thereof.

     GATX and its subsidiaries are engaged in various other matters of
litigation and have a number of unresolved claims pending, including proceedings
under governmental laws and regulations related to environmental matters. While
the amounts claimed are substantial and the ultimate liability with respect to
such litigation and claims cannot be determined at this time, it is the opinion
of management that amounts, if any, required to be paid by GATX and its
subsidiaries in the discharge of such liabilities are not likely to be material
to GATX's consolidated financial position or results of operations.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     None.

EXECUTIVE OFFICERS OF THE REGISTRANT

     Pursuant to General Instruction G(3), the following information regarding
executive officers is included in Part I in lieu of inclusion in the GATX Proxy
Statement:

<Table>
<Caption>
                                                                                          OFFICE
                                                                                           HELD
NAME                                                     OFFICE HELD                      SINCE    AGE
- ----                                                     -----------                      ------   ---
<S>                                    <C>                                                <C>      <C>
Ronald H. Zech.......................  Chairman, President and Chief Executive Officer     1996    58
Ronald J. Ciancio....................  Vice President, General Counsel and Secretary       2000    60
Gail L. Duddy........................  Vice President, Human Resources                     1999    49
Brian A. Kenney......................  Vice President and Chief Financial Officer          1999    42
William M. Muckian...................  Vice President, Controller and Chief Accounting     2002    42
                                       Officer
Clifford J. Porzenheim...............  Vice President, Corporate Strategy                  1999    38
William J. Hasek.....................  Vice President and Treasurer                        2002    45
Robert C. Lyons......................  Vice President, Investor Relations                  2002    38
</Table>

Officers are elected annually by the Board of Directors.

- - Mr. Zech has served as Chairman, President and Chief Executive Officer of GATX
  since 1996. Mr. Zech served as Chief Operating Officer of GATX from 1994 to
  1996.

- - Mr. Ciancio has served as Vice President, General Counsel and Secretary of
  GATX since 2000. Mr. Ciancio was Assistant General Counsel of GATX from 1984
  to 2000.

- - Ms. Duddy joined GATX in 1992 as Director of Compensation and in 1995 also
  assumed responsibility for the employee benefits function. In 1997, Ms. Duddy
  was elected Vice President, Compensation, Benefits and Corporate Human
  Resources. In 1999, Ms. Duddy was elected Vice President, Human Resources of
  GATX.

- - Mr. Kenney has served as Vice President and Chief Financial Officer of GATX
  since 1999. Prior to that, Mr. Kenney served as Vice President, Finance from
  1998 to 1999, Vice President and Treasurer from 1997 to 1998, and Treasurer
  from 1995 to 1996.

- - In 2002, Mr. Muckian was elected Vice President, Controller and Chief
  Accounting Officer. Prior to that, Mr. Muckian served as Controller and Chief
  Accounting Officer of GATX from 2000 to 2001 and Director of Taxes for GATX
  from 1994 to 2000.

                                        10
<PAGE>

- - In 1999, Mr. Porzenheim was elected Vice President, Corporate Strategy of
  GATX. Mr. Porzenheim was the Director of Corporate Development for GATX from
  1996 to 1998.

- - In 2002, Mr. Hasek was elected Vice President and Treasurer. Prior to that,
  Mr. Hasek was Treasurer of GATX from 1999 to 2001, Director of Financial
  Analysis and Budgeting from 1997 to 1999 and Manager of Corporate Finance from
  1995 to 1997.

- - In 2002, Mr. Lyons was elected Vice President, Investor Relations of GATX. Mr.
  Lyons joined GATX in 1996 and was Director of Investor Relations from 1998 to
  2001 and prior to that was a Project Manager in Corporate Finance.

                                    PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SHAREHOLDER
MATTERS

     GATX common stock is listed on the New York and Chicago Stock Exchanges
under ticker symbol GMT. The approximate number of common stock holders of
record as of March 8, 2002 was 3,618. The following table shows the reported
high and low sales price of GATX common shares on the New York Stock Exchange,
which is the principal market for GATX shares, and the dividends declared per
share:

<Table>
<Caption>
                                                                               2001        2000
                                          2001     2001     2000     2000    DIVIDENDS   DIVIDENDS
COMMON STOCK                              HIGH     LOW      HIGH     LOW     DECLARED    DECLARED
- ------------                             ------   ------   ------   ------   ---------   ---------
<S>                                      <C>      <C>      <C>      <C>      <C>         <C>
First quarter..........................  $49.94   $40.50   $40.25   $28.38     $.31        $.30
Second quarter.........................   43.05    36.40    38.75    33.13      .31         .30
Third quarter..........................   43.55    29.80    45.19    34.13      .31         .30
Fourth quarter.........................   33.75    23.65    50.50    36.31      .31         .30
</Table>

                                        11
<PAGE>

ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA -- FIVE-YEAR SUMMARY

<Table>
<Caption>
                                                         YEAR ENDED OR AT DECEMBER 31
                                             ----------------------------------------------------
                                             2001(A)    2000(B)      1999       1998     1997(C)
                                             --------   --------   --------   --------   --------
                                                      IN MILLIONS, EXCEPT PER SHARE DATA
<S>                                          <C>        <C>        <C>        <C>        <C>
RESULTS OF OPERATIONS
Gross income...............................  $1,521.4   $1,389.9   $1,258.6   $1,263.6   $1,197.0
Costs and expenses.........................   1,515.8    1,336.4    1,049.5    1,063.4    1,027.6
                                             --------   --------   --------   --------   --------
Income from continuing operations before
  income taxes.............................       5.6       53.5      209.1      200.2      169.4
Income tax (benefit) provision.............      (1.9)      22.7       82.8       86.0       66.8
                                             --------   --------   --------   --------   --------
  Income from continuing operations........       7.5       30.8      126.3      114.2      102.6
  Income (loss) from discontinued
     operations............................     165.4       35.8       25.0       17.7     (153.5)
                                             --------   --------   --------   --------   --------
NET INCOME (LOSS)..........................  $  172.9   $   66.6   $  151.3   $  131.9   $  (50.9)
                                             ========   ========   ========   ========   ========
PER SHARE DATA
Basic:
  Income from continuing operations........  $    .15   $    .64   $   2.56   $   2.32   $   2.15
  Income (loss) from discontinued
     operations............................      3.41        .75        .51        .36      (3.43)
                                             --------   --------   --------   --------   --------
Total......................................  $   3.56   $   1.39   $   3.07   $   2.68   $  (1.28)
                                             ========   ========   ========   ========   ========
Average number of common shares (in
  thousands)...............................    48,512     47,880     49,296     49,178     45,084
Diluted:
  Income from continuing operations........  $    .15   $    .63   $   2.51   $   2.27   $   2.06
  Income (loss) from discontinued
     operations............................      3.36        .74        .50        .35      (3.34)
                                             --------   --------   --------   --------   --------
Total......................................  $   3.51   $   1.37   $   3.01   $   2.62   $  (1.28)
                                             ========   ========   ========   ========   ========
Average number of common shares and common
  share equivalents (in thousands).........    49,202     48,753     50,301     50,426     45,084
Dividends declared per share of common
  stock....................................  $   1.24   $   1.20   $   1.10   $   1.00   $    .92
                                             ========   ========   ========   ========   ========
FINANCIAL CONDITION
Assets.....................................  $6,109.7   $6,263.7   $5,429.2   $4,581.1   $4,583.8
Long-term debt and capital lease
  obligations..............................   3,788.5    3,752.3    3,280.2    2,663.1    2,674.1
Shareholders' equity.......................     881.8      789.5      836.0      732.9      655.4
                                             ========   ========   ========   ========   ========
</Table>

- ---------------

(a) 2001 includes a gain on sale of a portion of a segment of $343.0 million on
    a pre-tax basis, or $163.9 million on an after-tax basis.

(b) 2000 includes a provision for litigation of $160.5 million on a pre-tax
    basis, or $97.6 million on an after-tax basis.

(c) 1997 includes a restructuring charge of $224.8 million on a pre-tax basis,
    or $162.8 million on an after-tax basis.

                                        12
<PAGE>

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

COMPANY OVERVIEW

     Information regarding general information and characteristics of the
Company is included in ITEM 1, BUSINESS, of this document.

     The following discussion and analysis should be read in conjunction with
the audited financial statements included herein. Certain statements within this
document may constitute forward-looking statements made pursuant to the safe
harbor provision of the Private Securities Litigation Reform Act of 1995. These
statements are identified by words such as "anticipate," "believe," "estimate,"
"expects," "intend," "predict," or "project" and similar expressions. This
information may involve risks and uncertainties that could cause actual results
to differ materially from the forward-looking statements. Although the Company
believes that the expectations reflected in such forward-looking statements are
based on reasonable assumptions, such statements are subject to risks and
uncertainties that could cause actual results to differ materially from those
projected. Refer to the RISK FACTORS section of Part I of this document for a
discussion of these risks and uncertainties.

YEAR ENDED DECEMBER 31, 2001 COMPARED TO YEAR ENDED DECEMBER 31, 2000

  FINANCIAL SERVICES

     The recessionary economy and challenging market conditions of 2001 impacted
Financial Services' businesses, particularly the telecommunications (telecom)
and air businesses. Financial Services' financing of telecom equipment expanded
over the last few years as Financial Services diversified its portfolio across
many telecom sub-sectors and co-invested with other financial institutions. A
significant portion of the losses experienced by Financial Services in 2001 was
attributable to the poor performance of the telecom market. Financial Services
has exited the telecom equipment financing business and has reduced its exposure
to $20.3 million, or approximately 1% of Financial Services' total assets at
December 31, 2001, a decrease of $150.9 million from December 31, 2000.

     A weakening economy coupled with the events of September 11th have caused a
decrease in air travel which in turn has resulted in lower air asset utilization
and increased pressure on lease rates for new and existing aircraft. Financial
Services expects aircraft demand and lease rates to remain under pressure in
2002. See discussion in the OTHER INFORMATION section of Management's Discussion
and Analysis for additional details regarding the air portfolio.

  Gross Income

     Financial Services' gross income of $842.5 million increased $134.3 million
over the prior year principally due to higher lease income generated from a
larger investment portfolio and higher asset remarketing income. This increase
was partially offset by a decrease in share of affiliates' earnings. Lease
income of $512.4 million increased $131.3 million from 2000, primarily from new
leases within the technology portfolio. In the first quarter of 2001, Financial
Services acquired a portfolio of technology leases from El Camino Resources that
contributed significantly to the increase in lease income.

     Asset remarketing income, which includes gains from the sale of assets from
Financial Services' own portfolio as well as residual sharing fees from the sale
of managed assets, was $96.1 million, $51.2 million higher than 2000. The
increase in asset remarketing income was driven by larger gains within the
specialty finance and technology portfolios. Gains on the sale of equity
securities, which are derived from warrants received as part of financing and
leasing transactions with non-public companies, were $38.7 million, a decrease
of $13.6 million from the prior year. Because the timing of such sales is
dependent on changing market conditions, gains from the sale of equity
securities and asset remarketing income do not occur evenly from period to
period. It is expected that asset remarketing income for 2002 will be lower than
the 2001 level. Additionally, it is anticipated that gains from the sale of
equity securities in 2002 will be well below 2001 levels absent a strong
recovery in the initial public offering market.

                                        13
<PAGE>

     GATX invests in companies and joint ventures that complement its existing
business activities. GATX partners with financial institutions and operating
companies to improve scale in certain markets, broaden diversification within an
asset class, and enter new markets. GATX uses the equity method to account for
these investments. Share of affiliates' earnings represent GATX's pre-tax
earnings on undistributed earnings or losses of these investments.

     Financial Services' share of affiliates' earnings decreased $32.0 million
to $25.4 million in 2001 due primarily to losses within telecom joint ventures.
Specifically, earnings from affiliates were net of a $35.6 million provision for
possible losses and asset impairment charges from telecom affiliates.

  Ownership Costs

     Ownership costs, including interest, depreciation and operating lease
expense, of $507.4 million increased $97.6 million compared with the prior year
due to higher depreciation and interest expense. Depreciation and amortization
expense of $295.8 million increased $80.3 million from 2000 reflecting the
higher level of investment in operating lease assets, specifically technology
and air assets. Interest expense increased $22.0 million in 2001 to $182.8
million reflecting higher average debt balances associated with funding new
investment activity. Operating lease expense was comparable year over year.

  Selling, General and Administrative

     Selling, general and administrative (SG&A) expenses of $127.7 million
increased $17.5 million over the prior year due to higher human resource and
administrative expenses associated with an overall increase in business activity
and increased legal expenses associated with the Airlog litigation (see
discussion of Airlog litigation below).

  Provision for Possible Losses

     The provision for possible losses is derived from Financial Services'
estimate of losses based on a review of credit, collateral and market risks. The
current year provision at Financial Services of $97.8 million increased $81.8
million from 2000. This increase reflects the weakness in the economy and the
deterioration of certain venture, steel and telecom investments. The allowance
for possible losses of $86.5 million at December 31, 2001 decreased $2.6 million
from the prior year and was approximately 6.0% of reservable assets, down from
6.5% at the prior year end. Reservable assets are defined as rent receivables,
direct financing leases, leveraged leases and secured loans. Net charge-offs of
reservable assets totaled $100.4 million for the year ended December 31, 2001,
and were comprised primarily of venture, telecom, steel and other specialty
finance investments.

  Asset Impairment Charges

     A review for impairment of long-lived assets is performed whenever events
or changes in circumstances indicate that the carrying amount of long-lived
assets may not be recoverable. Recoverability of assets to be held and used is
measured by a comparison of the carrying amount of an asset to future net cash
flows expected to be generated by the asset. If such assets are considered to be
impaired, the impairment charge to be recognized is measured by the amount by
which the carrying amount of the assets exceeds fair value. Asset impairment
charges of $85.2 million increased $80.2 million from 2000. Asset impairment in
the telecom and air portfolios were $67.8 million and $7.8 million,
respectively, for the year ended December 31, 2001.

  Provision (Reversal) for Litigation Charges

     GATX Capital Corporation (GCC), formerly a subsidiary of GATX Corporation,
and currently part of the Financial Services' operating segment, was party to
litigation arising from the issuance by the Federal Aviation Administration of
Airworthiness Directive 96-01-03 in 1996, the effect of which significantly
reduced the amount of freight that ten 747 aircraft were authorized to carry.
GATX/Airlog, a California partnership in which a subsidiary of GCC was a
partner, through a series of contractors, modified these aircraft from

                                        14
<PAGE>

passenger to freighter configuration between 1988 and 1994. GCC reached
settlements covering five of the aircraft, and the remaining five were the
subject of this litigation.

     On February 16, 2001, a jury found that GATX/Airlog breached certain
warranties under the applicable aircraft modification agreements, and
fraudulently failed to disclose information to the operators of the aircraft. In
2001, GCC reached settlement with each of the plaintiffs in this litigation.

     GATX had recorded a pre-tax charge of $160.5 million in 2000 to accrue for
its estimated liability under the various settlement agreements. Upon settlement
of these matters, $13.1 million of the previously recorded provision was
reversed in 2001.

  Reduction in Workforce Charges

     During 2001, Financial Services recorded a pre-tax charge of $5.6 million
related to a reduction in workforce. This action was part of GATX's previously
announced initiative to reduce SG&A costs in response to current economic
conditions. The reduction in workforce charge included involuntary employee
separation and benefit costs for 88 employees as well as occupancy and other
costs.

  Net Loss

     Financial Services' net loss for 2001 was $18.9 million and was principally
the result of increases to the loss provision and asset impairment charges.
Financial Services' net loss for 2000 was $30.4 million and included an
after-tax litigation charge of $97.6 million.

  GATX RAIL

     In 2001, GATX combined the rail business unit of Financial Services and
GATX Rail into one rail segment. All periods presented have been restated to
reflect the combination of the rail operations. The North American and European
rail markets continue to be negatively impacted by the economic downturn.
Several industries serviced by GATX Rail (Rail), most notably the chemical
industry, are experiencing adverse market conditions that have in turn reduced
railcar and locomotive demand and lease rate pricing. Aggressive competition and
railroad efficiency have also contributed to lower demand and lease rate
pricing. These factors negatively impacted Rail's 2001 results, and are expected
to continue to adversely affect railcar and locomotive demand and lease rates
during 2002. In response to current rail market conditions, Rail has retired
excess railcars, has limited orders of new railcars to specific customer
requests and has taken steps to reduce operating and SG&A expenses.

     In March 2001, Rail purchased Dyrekcja Eksploatacji Cystern (DEC), Poland's
national tank car fleet, for $95.8 million. Under the terms of the acquisition
agreement, Rail is obligated to invest $71.9 million in DEC over the next five
years. DEC assets include 11,000 tank cars and a railcar maintenance network.
Comparisons between periods are affected by the inclusion of DEC in the 2001
financial statements.

  Gross Income

     Rail's gross income of $676.1 million was flat with 2000. Excluding DEC's
gross income of $25.6 million, Rail's gross income decreased $25.5 million from
the prior year. Rental revenue was $602.9 million in 2001 excluding DEC, $3.4
million lower than 2000, despite a slight increase in active railcars. Lease
rates were affected by excess capacity in the leasing market, which in turn
negatively impacted rental revenue. Rail had approximately 103,000 of wholly
owned railcars on lease throughout North America at year end, compared to
102,000 railcars a year ago. North American utilization ended the year at 91.2%
on a total fleet of 112,000 wholly owned railcars, compared to 92.4% at the end
of 2000. In North America, Rail added 4,000 cars in 2001, a sharp decrease from
the 8,000 cars added in 2000, as a result of limiting new railcar orders in
response to the current rail market.

     Asset remarketing income of $2.9 million was $9.4 million lower than the
prior year. Share of affiliates' earnings of $7.4 million decreased $13.2
million. The decrease in both asset remarketing income and share of affiliates'
earnings was partly attributable to the 2000 sale of six-axle locomotives. Rail
and its affiliate
                                        15
<PAGE>

Locomotive Leasing Partners, LLC reconfigured the locomotive fleet from six-axle
locomotives to four-axle locomotives, which resulted in sales of wholly owned
equipment and of assets held by the joint venture. Additionally, share of
affiliates' earnings decreased $3.4 million in 2001 due to nonrecurring
adjustments.

  Ownership Costs

     Ownership costs of $348.0 million increased $14.7 million from last year
and include approximately $10.7 million of costs related to DEC. Excluding the
impact of DEC, the $4.0 million increase in ownership costs from the prior year
period is primarily due to the full year impact of last year's new car
additions.

  Operating Costs

     Rail's operating costs of $176.3 million included $24.5 million of
nonrecurring items, of which $19.7 million related to the closing of its East
Chicago repair facility. Excluding the nonrecurring charges, operating expenses
increased $22.1 million, of which $11.1 million was due to the acquisition of
DEC. Repair costs, excluding DEC, were essentially flat with the prior year,
however, storage costs increased due to a larger idle fleet. The current year
results also included an increase in the general liability insurance reserves.

  Selling, General and Administrative

     SG&A expense increased $5.2 million from the prior year period to $83.3
million and include $6.2 million attributable to DEC. International business
development costs of $4.9 million also contributed to this increase. Excluding
these costs, SG&A decreased $5.9 million in 2001 due to a reduction in personnel
costs and lower discretionary spending.

  Provision for Possible Losses

     Rail's provision for possible losses of $0.6 million decreased $1.1 million
from the prior year.

  Reduction in Workforce Charges

     During 2001, Rail recorded a pre-tax charge of $5.3 million related to a
reduction in workforce. This action was part of GATX's previously announced
initiative to reduce selling, general and administrative costs in response to
current economic conditions. The reduction in workforce charge included
involuntary employee separation and benefit costs for 47 employees, as well as
occupancy and other costs.

  Net Income

     Rail's net income of $44.1 million was $38.1 million lower than the prior
year primarily due to closure costs related to its East Chicago repair facility,
unfavorable market conditions and other nonrecurring charges.

  CORPORATE AND OTHER

     Corporate and other net expense of $17.7 million was $3.5 million favorable
to 2000. Decreases in SG&A expense and net interest expense were partially
offset by a $4.0 million tax charge related to the Company's corporate-owned
life insurance program (COLI). The decrease in net interest expense reflects the
utilization of the proceeds from the sale of the ISG businesses. Corporate also
recorded a pre-tax charge of $2.5 million related to a reduction in workforce.

  INCOME TAXES

     The 2001 consolidated effective tax rate for continuing operations was
(34.1)% compared to the 2000 rate of 42.4%. The 2001 tax provision was impacted
by a favorable deferred tax adjustment attributable to a reduction in foreign
tax rates offset by the COLI tax reserve.

                                        16
<PAGE>

  DISCONTINUED OPERATIONS

     Discontinued operations encompasses the former GATX Integrated Solutions
Group segment and comprises GATX Terminals Corporation (Terminals), GATX
Logistics, Inc. (Logistics), and minor business development efforts.

     GATX sold 81% of Logistics in May 2000 and the remaining 19% in December
2000. In the first quarter of 2001, GATX sold substantially all of Terminals'
domestic operations. The sale included substantially all of Terminals' domestic
terminaling operations, the Central Florida Pipeline Company and Calnev Pipe
Line Company. In the first quarter of 2001, GATX also sold substantially all of
Terminals' European operations. In the second and third quarters of 2001,
Terminals sold its Asian operations and its interest in a distillate and
blending distribution affiliate. Additionally, in the first quarter GATX sold
various smaller supply chain businesses. At December 31, 2001, substantially all
discontinued operations were sold. A net after-tax gain of $163.9 million was
recognized on the sales of ISG assets in 2001.

     Operating results for 2001 were $1.5 million, down $25.9 million from the
prior year. Comparisons between periods were affected by the timing of the sale
of ISG assets.

YEAR ENDED DECEMBER 31, 2000 COMPARED TO YEAR ENDED DECEMBER 31, 1999

  FINANCIAL SERVICES

  Gross Income

     Financial Services' gross income of $708.2 million increased $116.2 million
over the prior year. Excluding VAR, the value added technology equipment sales
and service business that was sold in June 1999, gross income increased $183.2
million. Lease income of $381.1 million increased $116.4 million from 1999,
primarily from new leases within the air, technology and specialty finance
portfolios. Interest income of $60.1 million increased $19.3 million from the
prior year due to higher average loan balances. The average loan balance was
$196.3 million higher in 2000 compared to 1999 as a result of increased venture
financing. Gains on the sale of equity securities were $52.3 million, an
increase of $37.6 million from the prior year. Asset remarketing income was
$44.9 million, $16.5 million lower than 1999. Share of affiliates' earnings
increased $16.3 million to $57.4 million in 2000. Earnings growth in air and
technology joint ventures contributed to this increase.

  Ownership Costs

     Financial Services' ownership costs of $409.8 million increased $136.1
million from 1999. Depreciation and amortization expense of $215.5 million
increased $76.7 million from 1999 and reflected a higher level of investments in
operating lease assets. Interest expense increased $55.2 million to $160.8
million in 2000. Higher average debt outstanding combined with an increase in
borrowing rates drove interest expense higher in 2000. Operating lease expense
was comparable year over year.

  Operating Expenses

     Excluding VAR, operating expenses at Financial Services increased $3.5
million primarily due to higher marine operating costs.

  Selling, General and Administrative

     Excluding VAR, SG&A of $110.2 million increased $15.6 million over the
prior year due to higher human resource and administrative expenses associated
with increased growth initiatives.

  Provision for Litigation Charges

     GATX recorded a pre-tax charge of $160.5 million in 2000 to accrue for its
estimated liability under various settlement agreements related to GATX/Airlog
and management's best estimate of its potential liability under the judgment
entered in favor of Kalitta Air.
                                        17
<PAGE>

  Provision for Possible Losses

     The provision for possible losses was $16.0 million, $5.5 million higher
than 1999. The allowance for possible losses decreased $10.9 million from
December 31, 1999 to $89.1 million and was approximately 6.5% of reservable
assets, down from 10.1 % at December 31, 1999.

  Net (Loss) Income

     Financial Services' net loss for 2000 was $30.4 million compared to net
income of $52.2 million in 1999. This decrease was primarily the result of an
after-tax litigation charge of $97.6 million.

  GATX RAIL

  Gross Income

     Rail's gross income of $676.0 million was $7.9 million higher than 1999.
Rental revenue increased $14.2 million over the prior year, reflecting the net
impact of a larger active North American fleet partially offset by lower lease
renewal rates. Asset remarketing income of $12.3 million was $1.8 million lower
than 1999 and share of affiliates' earnings of $20.6 million decreased $1.9
million from 1999. Rail's 1999 results include a gain from the sale of 1,700
grain cars that did not provide an acceptable level of long-term economic value.

     At year end 2000, Rail had 102,000 wholly owned railcars on lease in North
America compared to 100,000 railcars on lease at the end of 1999. Utilization
was 92.4% and 94.1% at the end of 2000 and 1999, respectively. Rail added 8,000
cars in 2000, which was comparable to 1999 additions. The majority of Rail's car
additions occurred during the first half of 2000, as market conditions and
growing economic uncertainty led to a sharp curtailment of new car orders and
fleet acquisitions during the second half of the year.

  Ownership Costs

     Ownership costs of $333.3 million increased $28.2 million from 1999.
Although Rail's fleet increased in 2000, depreciation and interest expense was
comparable to 1999 as the incremental ownership costs were reflected as
operating lease expense due to the sale-leaseback financing of railcars.

  Operating Costs

     Rail's operating costs decreased $6.0 million from 1999. Higher repair and
maintenance expenses were offset by a number of nonrecurring items that affected
both years. Repair and maintenance expenses were higher due in part to the
increased use of third-party contract repair shops as a result of a labor
dispute at Rail's U.S. service centers. The labor dispute was resolved in the
first quarter of 2001.

  Selling, General and Administrative

     SG&A expenses were comparable year over year.

  Net Income

     Rail's net income of $82.2 million was $8.3 million lower than 1999
primarily due to decreased utilization and higher ownership costs.

  CORPORATE AND OTHER

     Corporate and other net expense of $21.2 million was $4.6 million higher
than 1999. The increase was the result of higher SG&A and interest expenses.
Additionally, 1999 net expense included a $1.0 million favorable insurance
benefit.

                                        18
<PAGE>

  INCOME TAXES

     The 2000 effective tax rate of 42.4% was higher than the 1999 rate of 39.6%
due to the relative impact of state and foreign taxes and certain nondeductible
expenses on pre-tax income.

  DISCONTINUED OPERATIONS

     Operating results of discontinued operations contributed $27.4 million and
$25.0 million to net income in 2000 and 1999, respectively. Strong results in
the terminal and pipeline business were partially offset by losses incurred in
the warehousing business and higher business development costs. GATX sold
Logistics in 2000, recognizing an $8.4 million after-tax gain.

BALANCE SHEET DISCUSSION

  ASSETS

     Assets for continuing operations increased to $6.1 billion in 2001 from
$5.6 billion in 2000. Portfolio investments and capital additions of $1.8
billion were partially offset by depreciation and amortization, the
sale-leaseback of railcars at Rail, and portfolio asset sales at Financial
Services.

     In addition to the $6.1 billion of assets recorded on the balance sheet,
GATX utilizes approximately $1.6 billion of other assets, such as railcars and
aircraft, which were financed with operating leases and therefore are not
recorded on the balance sheet. The value of the off balance sheet assets was
derived from the present value of GATX's committed future operating lease
payments at various appropriate borrowing rates.

     The following table presents assets for continuing operations (on and off
balance sheet) by segment and business unit (in millions):

<Table>
<Caption>
                                             2001                             2000
                                ------------------------------   ------------------------------
                                   ON        OFF                    ON        OFF
                                BALANCE    BALANCE     TOTAL     BALANCE    BALANCE     TOTAL
DECEMBER 31                      SHEET      SHEET      ASSETS     SHEET      SHEET      ASSETS
- -----------                     --------   --------   --------   --------   --------   --------
<S>                             <C>        <C>        <C>        <C>        <C>        <C>
GATX RAIL.....................  $2,280.9   $1,533.6   $3,814.5   $2,091.2   $1,506.0   $3,597.2
FINANCIAL SERVICES
  Air.........................   1,375.7       35.0    1,410.7    1,081.0       38.2    1,119.2
  Specialty Finance...........   1,065.1        3.0    1,068.1    1,154.9        2.0    1,156.9
  Technology..................     914.7       12.7      927.4      801.0       13.9      814.9
  Venture Finance.............     346.1         --      346.1      506.7         --      506.7
                                --------   --------   --------   --------   --------   --------
TOTAL FINANCIAL SERVICES......   3,701.6       50.7    3,752.3    3,543.6       54.1    3,597.7
CORPORATE AND OTHER...........     127.2       22.4      149.6       (2.0)      13.7       11.7
                                --------   --------   --------   --------   --------   --------
                                $6,109.7   $1,606.7   $7,716.4   $5,632.8   $1,573.8   $7,206.6
                                ========   ========   ========   ========   ========   ========
</Table>

  RECEIVABLES

     Receivables, including finance leases and secured loans, were comparable to
last year. Prior year amounts included a $17.0 million receivable related to the
sale of Logistics. Excluding this amount, receivables increased $45.7 million
from the prior year. Investment volume was partially offset by portfolio asset
sales and asset write-offs.

  ALLOWANCE FOR POSSIBLE LOSSES

     The purpose of the allowance is to provide an estimate of possible credit
losses inherent in the investment portfolio. GATX sets the allowance by
assessing overall risk and probable losses in the portfolio and by reviewing the
Company's historical loss experience. GATX charges off amounts that management
considers unrecoverable from obligors or through the disposition of collateral.
GATX assesses the recoverability of

                                        19
<PAGE>

investments by considering factors such as a customer's payment history and
financial position, and the value of collateral based on internal and external
appraisal sources.

     The following summarizes changes in the allowance for possible losses (in
millions):

<Table>
<Caption>
                                                                DECEMBER 31
                                                              ----------------
                                                               2001      2000
                                                              -------   ------
<S>                                                           <C>       <C>
Balance at beginning of the year............................  $  95.2   $113.5
Provision for possible losses...............................     98.4     17.7
Charges to allowance........................................   (105.2)   (37.0)
Recoveries and other........................................      5.8      1.0
                                                              -------   ------
Balance at end of the year..................................  $  94.2   $ 95.2
                                                              =======   ======
</Table>

     There were no material changes in estimation methods or assumptions for the
allowance during 2001. The allowance for possible losses is periodically
reviewed for adequacy by considering changes in economic conditions, collateral
values and credit quality indicators. GATX believes that the allowance is
adequate to cover losses inherent in the portfolio as of December 31, 2001.
Because the allowance is based on judgments and estimates, it is possible that
those judgments and estimates could change in the future, causing a
corresponding change in the recorded allowance.

     The consolidated allowance for possible losses of $94.2 million decreased
$1.0 million compared to the prior year. The allowance for possible losses at
Financial Services decreased $2.6 million in 2001 to $86.5 million and was
approximately 6.0% of reservable assets, down from 6.5% in the prior year.
Rail's allowance for possible losses decreased $3.4 million in 2001.
Consolidated net charge-offs totaled $104.4 million for the year, an increase of
$68.3 million from 2000, and were related primarily to venture, telecom and
steel investments.

  NON-PERFORMING INVESTMENTS

     Investments, such as leases and loans that are 90 days or more past due, or
where reasonable doubt exists as to timely collection, including leases and
loans that are individually identified as being impaired, are generally
classified as non-performing unless adequately secured by collateral.
Non-performing investments do not include operating lease assets that are
temporarily off lease. Lease or interest income accrued but not collected is
reversed when a lease or loan is classified as non-performing. Interest payments
received on non-performing loans for which the ultimate collectibility of
principal is uncertain are applied as principal reductions. Otherwise, such
collections are credited to income when received.

     At December 31, 2001, non-performing investments of $96.4 million increased
$18.0 million from the prior year end due to weakness in the venture and air
markets. Non-performing investments as of December 31, 2001 were 3.4% of
Financial Services investments, compared to 3.0% of Financial Services
investments at December 31, 2000.

  OPERATING LEASE ASSETS, FACILITIES AND OTHER

     Operating lease assets and facilities increased $64.7 million from 2000
largely due to portfolio investments in aircraft, technology and railcar assets.
Offsetting these investments were increases in accumulated depreciation, the
sale-leaseback of railcars at Rail and portfolio asset sales at Financial
Services.

     GATX classifies amounts deposited toward the construction of wholly owned
aircraft and other equipment, including capitalized interest, as progress
payments. Progress payments made for aircraft within joint ventures are
classified as investments in affiliated companies. In 2001, GFC terminated a
joint venture with Flightlease, a Swissair Group Company. The joint venture had
contracted with Boeing for the purchase of ten B737-800 aircraft and with Airbus
for the purchase of 38 Airbus aircraft. GFC purchased Flightlease's interest in
the Boeing order. GFC also reached an agreement with Airbus whereby in
consideration for its agreement to purchase 19 A320 family aircraft from Airbus
over the next four years, Airbus agreed to release

                                        20
<PAGE>

GFC from any further obligations with respect to the original joint venture
order. The $248.5 million increase in progress payments relates to these Airbus
and Boeing orders.

  INVESTMENTS IN AFFILIATED COMPANIES

     Investments in affiliated companies decreased $14.9 million in 2001 largely
due to $35.6 million in asset impairment and loss provision charges at the
telecom affiliates. GATX invested $249.4 million and $244.4 million in joint
ventures in 2001 and 2000, respectively. Share of affiliates' earnings were
$32.8 million, $78.1 million and $63.6 million in 2001, 2000 and 1999,
respectively. Distributions from affiliates were $225.6 million and $119.7
million in 2001 and 2000, respectively.

     The following table shows GATX's investment in affiliated companies by
segment and business unit (in millions):

<Table>
<Caption>
                                                                DECEMBER 31
                                                              ---------------
                                                               2001     2000
                                                              ------   ------
<S>                                                           <C>      <C>
GATX RAIL...................................................  $200.6   $205.9
FINANCIAL SERVICES
  Air.......................................................   523.5    512.4
  Specialty Finance.........................................   205.9    184.0
  Technology................................................     8.9     13.0
  Venture Finance...........................................    14.1     52.1
                                                              ------   ------
TOTAL FINANCIAL SERVICES....................................   752.4    761.5
CORPORATE AND OTHER.........................................      --       .5
                                                              ------   ------
                                                              $953.0   $967.9
                                                              ======   ======
</Table>

  OTHER ASSETS

     Other assets of $349.8 million at December 31, 2001 were $24.8 million
lower than the prior year. Increases in assets held for sale and goodwill were
partially offset by lower balances in stock warrants and securities held for
investment. Assets held for sale are comprised mostly of aircraft.

  NET ASSETS OF DISCONTINUED OPERATIONS

     Net assets of discontinued operations decreased from 2000 reflecting the
2001 sale of ISG assets. GATX received $1.2 billion in pre-tax proceeds from the
sale of ISG assets.

  ACCRUED EXPENSES

     Accrued expenses decreased $90.6 million compared to the prior year due to
the settlement payments made in connection with the Airlog litigation.

  DEFERRED INCOME TAXES

     Deferred income taxes of $464.5 million increased $53.7 million from the
end of 2000 reflecting the realization of deferred tax assets attributable to
the litigation reserve and the full utilization of the alternative minimum tax
(AMT) credit carryforward.

  DEBT

     Debt decreased $192.5 million since the end of 2000 as proceeds from the
sale of ISG were used to pay down short-term debt and fund portfolio
investments. Nonrecourse debt increased $234.0 million primarily to fund
technology and rail investments. The acquisition by Financial Services of a
portfolio of technology leases from El Camino Resources also contributed
significantly to the increase in nonrecourse debt in 2001.

                                        21
<PAGE>

Additionally, GATX has approximately $1.6 billion of off balance sheet debt
related to assets that are financed with operating leases. The $1.6 billion was
derived from the present value of GATX's committed future operating lease
payments at various appropriate borrowing rates.

  TOTAL SHAREHOLDERS' EQUITY

     Shareholders' equity increased $92.3 million reflecting net income of
$172.9 million offset by common stock dividends of $60.2 million.

CASH FLOW DISCUSSION

     GATX generates significant cash flow from its operating activities and
proceeds from its investment portfolio, which is used to service debt, pay
dividends, and fund portfolio investments and capital additions.

  NET CASH PROVIDED BY CONTINUING OPERATIONS

     Net cash provided by continuing operations of $355.7 million decreased
$42.1 million from 2000. Payments related to the settlement of the Airlog
litigation decreased cash flow from operations by $141.0 million. All cash
received from asset dispositions (excluding the proceeds from the sale of the
ISG segment), including gain and return of principal, was included in investing
activities as portfolio proceeds or other asset sales.

  PORTFOLIO INVESTMENTS AND CAPITAL ADDITIONS

     Portfolio investments and capital additions of $1.8 billion decreased
$134.2 million from 2000.

     The following table presents portfolio investments and capital additions by
segment and business lines (in millions):

<Table>
<Caption>
                                                                  DECEMBER 31
                                                              -------------------
                                                                2001       2000
                                                              --------   --------
<S>                                                           <C>        <C>
GATX RAIL...................................................  $  370.1   $  482.7
FINANCIAL SERVICES
  Air.......................................................     577.1      288.3
  Technology................................................     431.3      397.7
  Venture Finance...........................................     259.4      339.9
  Specialty Finance.........................................     147.8      412.3
  Other.....................................................       8.2        6.7
                                                              --------   --------
TOTAL FINANCIAL SERVICES....................................   1,423.8    1,444.9
CORPORATE AND OTHER.........................................        .3         .8
                                                              --------   --------
                                                              $1,794.2   $1,928.4
                                                              ========   ========
</Table>

     Significant investments in Air included $264.3 million in progress payments
for wholly owned aircraft and a $70.4 million investment in a new joint venture,
The Pembroke Group. In the first quarter, Financial Services acquired a
portfolio of technology leases from El Camino Resources for $116.5 million
(which is net of the assumption of $256.0 million of nonrecourse debt). Rail's
capital additions in 2001 included $243.3 million to acquire approximately 4,000
railcars and locomotives throughout North America and $95.8 million for the
acquisition of DEC. Future portfolio investments and capital additions
(excluding contractual commitments) will be dependent on market conditions and
opportunities to acquire desirable assets.

                                        22
<PAGE>

  PORTFOLIO PROCEEDS

     Portfolio proceeds of $1.0 billion increased $403.6 million from the 2000
period primarily due to an increase in the remarketing of manufacturing-related
equipment and air assets, loan principal received and cash distributions from
air and telecom joint venture investments. The timing of assets coming off
lease, opportunities to renew leases at attractive rates, and the composition of
the investment portfolio all contributed to the year-over-year increase in
remarketing proceeds.

  PROCEEDS FROM OTHER ASSET SALES

     Proceeds from other asset sales included $189.2 million from the
sale-leaseback of railcars at Rail compared to $291.1 million in 2000.

  PROCEEDS FROM SALE OF A PORTION OF SEGMENT

     Proceeds of $1.2 billion from the sale of a portion of a segment and $281.9
million of taxes paid were related to the sale of various ISG assets.

  NET CASH OF FINANCING ACTIVITIES FOR CONTINUING OPERATIONS

     Net cash provided by financing activities of continuing operations
decreased $1.1 billion compared to 2000. Portfolio investments and capital
additions were funded with proceeds from debt, cash from operations, and
proceeds from asset sales, including the sale of ISG. A portion of the proceeds
from the sale of ISG was utilized to repay short-term debt obligations.

     GATX repurchased 1.4 million of its common shares for $48.0 million in 2000
in addition to the 1.1 million its common shares purchased in 1999 for $34.6
million. Additionally, on January 26, 2001, the Board of Directors authorized
the purchase of up to an additional 3.5 million shares of GATX's outstanding
common shares.

LIQUIDITY AND CAPITAL RESOURCES

     GATX funds asset growth and meets debt and lease obligations through cash
flow from operations, portfolio proceeds (including proceeds from asset sales),
commercial paper borrowings, uncommitted money market lines, committed revolving
credit facilities, the issuance of unsecured debt, and a variety of secured
borrowings. GATX utilizes both the domestic and international bank and capital
markets.

     GATX Financial Corporation (GFC), a wholly owned subsidiary of GATX
Corporation, has revolving credit facilities totaling $775.0 million, consisting
of a 364-day agreement for $141.7 million expiring in June 2002, which GFC
intends to renew, and two other agreements for $350.0 million and $283.3 million
that will expire in 2003 and 2004, respectively. The revolving credit facilities
contain various restrictive covenants, including an asset coverage test,
requirements to maintain a defined minimum net worth and a certain fixed charges
coverage ratio. At December 31, 2001, GFC was in compliance with the covenants
and conditions of the credit facilities. As defined in the credit facilities,
the net worth of GFC at December 31, 2001 was $1.4 billion, which was in excess
of the minimum net worth requirement of $900.0 million. Additionally, the ratio
of earnings to fixed charges as defined by the credit facilities was 2.7x for
the December 31, 2001 period, which was in excess of the 1.2x requirement.
Pursuant to the terms of the commercial paper programs and rating agency
guidelines, GFC must maintain unused revolving credit capacity at least equal to
the amount of commercial paper outstanding. At December 31, 2001, GFC had
available unused committed lines of credit amounting to $606.5 million.

     Secured financings are comprised primarily of the sale-leaseback of
railcars. Other secured borrowings include mortgages on railcars and aircraft.
The railcar sale-leasebacks qualify as operating leases and as such assets or
liabilities associated with this equipment are not recorded on the balance
sheet. Certain sale-leasebacks involve railcars that are operated by special
purpose entities (SPE) that are wholly owned by GFC. The railcars are owned by
various financial institutions and leased to the SPE. These financial
institutions also have a security interest in the underlying customer subleases
on these railcars. GFC manages the railcars for
                                        23
<PAGE>

the SPE, and the lease obligations are non-recourse to GFC. The SPE structure
was used in order to secure a higher credit rating and a lower cost of borrowing
for GFC.

     GFC has a $1.0 billion shelf registration for debt securities, of which
$600.0 million has been issued.

     The availability of these funding options may be adversely impacted by
certain factors. Access to capital markets at competitive borrowing rates is
dependent on GFC's credit rating as determined by rating agencies such as
Standard & Poor's (S&P) and Moody's Investors Service (Moody's). On March 13,
2002, Moody's downgraded GFC's long-term unsecured debt to Baa3 from Baa2 and
GFC's commercial paper to Prime-3 from Prime-2. Moody's now maintains a stable
outlook on GFC's ratings. On March 14, 2002, S&P downgraded GFC's long-term
unsecured debt from BBB+ to BBB and GFC's commercial paper from A-2 to A-3. S&P
also placed GFC's long-term unsecured debt on credit watch with negative
implications. Both rating agencies had maintained a negative outlook on the
credit ratings of GFC due to the uncertainty surrounding the performance of
GFC's aircraft portfolio resulting from the events of September 11, 2001. This
negative outlook had increased the cost of borrowing in the financial markets
for GFC. Due to these rating agency downgrades, GFC's access to the commercial
paper market is likely to be seriously constrained or eliminated and GFC could
have more difficulty accessing the long-term capital market on a cost efficient
basis. A continued weak economic environment could decrease demand for GATX's
services, which could impact the Company's ability to generate cash flow from
operations and portfolio proceeds.

     Subsequent to December 31, 2001, GATX completed a convertible debt
transaction and a secured debt transaction that provided approximately $250.0
million in net proceeds to GFC's liquidity position. In addition, through
mid-March 2002, GFC has received approximately $295.0 million in secured
aircraft financing proceeds from two aircraft warehouse financing facilities and
GFC's European Credit Agency (ECA) financing program. The ECA program was
arranged to finance GFC's 2001-2004 Airbus A320 aircraft deliveries. On March
14, 2002, GFC received initial approval from the Export-Import Bank of the
United States (Ex-Im Bank) to provide credit support to finance GFC's 2002-2003
Boeing 737 aircraft deliveries. The Ex-Im Bank Board of Directors approved the
transaction for referral to Congress on March 14, 2002 and GFC expects final
approval to be received by late April. GFC believes that the combination of its
current cash position, the ongoing proceeds from the aircraft warehouse
facility, and the ECA and Ex-Im financings will enable it to meet its
contractual obligations for 2002 without the further issuance of debt or a
sustained drawdown of its committed bank lines.

     At December 31, 2001, GATX's contractual commitments were (in millions):

<Table>
<Caption>
                                                      PAYMENTS DUE BY PERIOD
                                     --------------------------------------------------------
                                                                                     YEARS
DECEMBER 31                           TOTAL       2002     2003-2004   2005-2006   THEREAFTER
- -----------                          --------   --------   ---------   ---------   ----------
<S>                                  <C>        <C>        <C>         <C>         <C>
Long-Term Debt.....................  $3,625.5   $  854.5   $1,391.0    $1,077.1     $  302.9
Capital Lease Obligations..........     237.1       35.1       63.7        35.7        102.6
Operating Leases -- Recourse.......   1,993.8      136.5      265.9       291.7      1,299.7
Operating Leases -- Nonrecourse....     718.4       37.4       79.9        81.6        519.5
Unconditional Purchase
  Obligations......................   1,132.7      694.5      438.2          --           --
Other..............................      71.9         --       37.8        34.1           --
                                     --------   --------   --------    --------     --------
                                     $7,779.4   $1,758.0   $2,276.5    $1,520.2     $2,224.7
                                     ========   ========   ========    ========     ========
</Table>

     GATX has commitments of $885.1 million for firm orders and options for 27
new aircraft to be delivered between 2002 and 2004. Other unconditional purchase
obligations include $194.3 million of specialty finance primarily related to
business jet aircraft and marine equipment purchases and $45.0 million related
to new venture transactions generated in the ordinary course of business.
Commitments to purchase railcars total $8.3 million. Additionally, under the
terms of the DEC acquisition agreement GATX is obligated to invest $71.9 million
in DEC over the next five years.

                                        24
<PAGE>

     At December 31, 2001, GATX's unconditional purchase obligations by segment
and business unit were (in millions):

<Table>
<Caption>
                                                      PAYMENTS DUE BY PERIOD
                                      ------------------------------------------------------
                                                                                    YEARS
DECEMBER 31                            TOTAL      2002    2003-2004   2005-2006   THEREAFTER
- -----------                           --------   ------   ---------   ---------   ----------
<S>                                   <C>        <C>      <C>         <C>         <C>
GATX RAIL...........................  $    8.3   $  8.3    $   --      $   --        $ --
FINANCIAL SERVICES
  Air...............................     885.1    516.9     368.2          --          --
  Specialty Finance.................     194.3    124.3      70.0          --          --
  Technology........................        --       --        --          --          --
  Venture Finance...................      45.0     45.0        --          --          --
                                      --------   ------    ------      ------        ----
TOTAL FINANCIAL SERVICES............   1,124.4    686.2     438.2      $   --          --
                                      --------   ------    ------      ------        ----
                                      $1,132.7   $694.5    $438.2      $   --        $ --
                                      ========   ======    ======      ======        ====
</Table>

     GATX has various commercial commitments, such as guarantees and standby
letters of credit, that could potentially require performance in the event of
demands by third parties. Similar to GATX's on balance sheet investments, these
guarantees expose GATX to credit and market risk; accordingly, GATX evaluates
commitments and other contingent obligations using the same techniques used to
evaluate funded transactions.

     Guarantees are commitments issued to guarantee performance of an affiliate
to a third party, generally in the form of lease and loan payment guarantees, or
to guarantee the value of an asset at the end of a lease. Lease and loan payment
guarantees generally involve guaranteeing repayment of the financing utilized to
acquire assets being leased by an affiliate to third parties, and are in lieu of
making direct equity investments in the affiliate. GATX is not aware of any
event of default which would require it to satisfy these guarantees, and expects
the affiliates to generate sufficient cash flow to satisfy their lease and loan
obligations.

     Asset residual value guarantees represent GATX's commitment to third
parties that an asset or group of assets will be worth a specified amount at the
end of a lease term. Over 50% of the asset residual value guarantees are related
to rail equipment. Based on known and expected market conditions, management
does not believe that the asset residual value guarantees will result in any
adverse financial impact to GATX.

     GATX and its subsidiaries are also parties to letters of credit and bonds.
Historically, no material claims have been made against these obligations.
Management does not expect any material losses to result from these off-balance
sheet instruments because performance is not expected to be required, and
therefore, is of the opinion that the fair value of these instruments is zero.

     GATX's commercial commitments were (in millions):

<Table>
<Caption>
                                             AMOUNT OF COMMITMENT EXPIRATION PER PERIOD
                                        ----------------------------------------------------
                                                                                    YEARS
DECEMBER 31                             TOTAL     2002    2003-2004   2005-2006   THEREAFTER
- -----------                             ------   ------   ---------   ---------   ----------
<S>                                     <C>      <C>      <C>         <C>         <C>
Standby Letters of Credit and Bonds...  $ 30.0   $ 29.1     $  .9       $  --       $   --
Affiliate Debt -- Recourse to GATX....   131.1     87.2      28.6          .4         14.9
Residual Value Guarantees.............   410.5     26.3      20.9        27.8        335.5
Rental Guarantee......................    40.2       --        --          --         40.2
                                        ------   ------     -----       -----       ------
                                        $611.8   $142.6     $50.4       $28.2       $390.6
                                        ======   ======     =====       =====       ======
</Table>

     At December 31, 2001, $425.0 million of subsidiary net assets were
restricted, limiting the ability of the subsidiaries to transfer assets to GATX
in the form of loans, advances or dividends. The majority of net asset
restrictions relate to the revolving credit agreements and various loan
agreements of GFC. Such restrictions are not expected to have an adverse impact
on the ability of GATX to meet its cash obligations.

                                        25
<PAGE>

OTHER INFORMATION

     On September 11, 2001, terrorists highjacked and crashed four commercial
aircraft resulting in a significant loss of life and a substantial loss of
property. These events have caused significant disruption to the United States'
economy as a whole, and in particular have significantly impacted the airline
industry. The terrorist attacks resulted in a precipitous decline in airline
travel, which in turn has significantly and adversely affected the financial
health of the airline industry.

     One of GATX's primary lines of business is aircraft leasing. The Company
has an interest in 173 aircraft. Of these, 24 aircraft are wholly owned by GATX
and the remainder are owned in combination with other investors. All of the 173
aircraft are Stage III compliant, mostly narrow-body aircraft, with an average
age of approximately nine years. These planes have an estimated useful life of
approximately 25 years.

     At December 31, 2001, the air portfolio consisted of assets with a net book
value of $1.4 billion. In total, the air portfolio accounted for 18.3% of GATX's
total assets (including both on and off balance sheet assets). For the year
ended December 31, 2001, 8.0% of GATX's gross income was derived from its air
portfolio investments. This included lease and interest income, income generated
by joint ventures, remarketing gains, and management fees. GATX's customer base
is diverse in carrier type and geographic location. GATX leases to over 50
airlines in 20 countries and is not highly dependent on any one airline; no
single customer exposure exceeds 10% of the net book value of the total air
portfolio. For aircraft currently on lease, the average remaining lease term is
approximately four years.

     At December 31, 2001, 15 aircraft were not on lease, seven of which are
being remarketed by GATX. The seven GATX aircraft represented approximately 7%
of the net book value of GATX's total air portfolio. Subsequent to year end,
GATX successfully placed six of the seven aircraft; the remaining aircraft
represents less than 1.0% of the net book value of the total air portfolio. The
remaining eight aircraft are being remarketed by The Pembroke Group (Pembroke),
a Dublin-based aircraft lessor in which the Company owns a 50% equity interest.
These eight aircraft represent approximately 3% of the net book value of
Pembroke's aircraft portfolio.

     In 2001, GFC terminated a joint venture with Flightlease, a Swissair Group
Company. The joint venture had contracted with Boeing for the purchase of ten
B737-800 aircraft and with Airbus for the purchase of 38 aircraft. GFC purchased
Flightlease's interest in the Boeing order. GFC also reached an agreement with
Airbus whereby in consideration for its agreement to purchase 19 A320 family
aircraft from Airbus over the next four years, Airbus agreed to release GFC from
any further obligations with respect to the original joint venture order. The
Swissair Group and several of its subsidiary companies are currently in
bankruptcy. GFC does not have any aircraft on lease to Swissair. GFC therefore
expects no material impact from the reorganization of Swissair.

     GFC has 27 planes on order, including the aircraft on order from Airbus and
Boeing. The delivery schedule for these aircraft is as follows: 16 in 2002, six
in 2003 and five in 2004. Currently, there are signed letters of intent to place
these aircraft with lessees for 14 of the 16 aircraft to be delivered in 2002.
Additionally, the renewal schedule for existing aircraft leases is as follows:
seven in 2002, 15 in 2003, 11 in 2004 and 19 in 2005. Leases for the remaining
aircraft will expire subsequent to 2005.

     At December 31, 2001, a subsidiary of Pembroke had an order for 21 Boeing
717 aircraft. During January 2002, an agreement in principle to restructure this
order was reached. Subject to documentation, this agreement will result in the
reduction of the order to fourteen aircraft with deliveries occurring in 2005
and 2006. If Boeing does not meet certain milestones with respect to new 717
program sales, the agreement permits cancellation of the commitment by either
party.

     The effects that these terrorist attacks, or related future events,
including military or police activities in the United States or abroad, future
terrorist activities or threats of such activities, political unrest and
instability, riots and protests, could have on the U.S. economy, global
financial markets and our business cannot presently be determined with any
accuracy. The effects may include, among other things, a permanent decrease in
demand for air travel, consolidation in the airline industry, lower utilization
of new and existing aircraft, lower aircraft rental rates, impairment of air
portfolio assets and fewer available partners for joint
                                        26
<PAGE>

ventures. In the fourth quarter of 2001, GATX and its joint ventures reviewed
their air portfolio for impairment and recorded $17.1 million in asset
impairment charges. Depending upon the severity, scope and duration of these
effects, the impact on GATX's financial position, results of operations, and
cash flows could be material.

CRITICAL ACCOUNTING POLICIES

     Operating lease assets and facilities:  Operating lease assets and
facilities are stated principally at cost. Assets acquired under capital leases
are included in operating lease assets and the related obligations are recorded
as liabilities. Provisions for depreciation include the amortization of the cost
of capital leases. Operating lease assets and facilities are depreciated using
the straight-line method to an estimated residual value. Railcars, locomotives,
aircraft, marine vessels, buildings and leasehold improvements are depreciated
over the estimated useful lives of the assets. Technology equipment is
depreciated over the term of the lease contract.

     Impairment of Long-Lived Assets:  A review for impairment of long-lived
assets, such as operating lease assets and facilities, is performed whenever
events or changes in circumstances indicate that the carrying amount of
long-lived assets may not be recoverable. Recoverability of assets to be held
and used is measured by a comparison of the carrying amount of an asset to
future net cash flows expected to be generated by the asset. If such assets are
considered to be impaired, the impairment loss to be recognized is measured by
the amount by which the carrying amount of the assets exceeds fair value. Assets
to be disposed of are reported at the lower of the carrying amount or fair value
less selling costs.

     Allowance for possible losses:  The purpose of the allowance is to provide
an estimate of possible credit losses inherent in the investment portfolio. GATX
sets the allowance by assessing overall risk and total probable losses in the
portfolio and by reviewing GATX's historical loss experience. GATX charges off
amounts that management considers unrecoverable from obligors or through the
disposition of collateral. GATX assesses the recoverability of investments by
considering factors such as a customer's payment history and financial position,
and the value of collateral based on internal and external appraisal sources.
The allowance for possible losses is periodically reviewed for adequacy
considering changes in economic conditions, collateral values and credit quality
indicators. GATX believes that the allowance is adequate to cover losses
inherent in the portfolio as of December 31, 2001. Because the allowance is
based on judgments and estimates, it is possible that those judgments and
estimates could change in the future, causing a corresponding change in the
recorded allowance.

     Investments in affiliated companies:  Investments in affiliated companies
represent investments in domestic and foreign companies and joint ventures that
are in businesses similar to those of GATX, such as aircraft leasing, rail
equipment leasing, technology equipment leasing and other business activities,
including ventures that provide asset residual value guarantees. Investments in
20 to 50 percent-owned companies and joint ventures are accounted for under the
equity method and are shown as investments in affiliated companies. Certain
investments in joint ventures that exceed 50% ownership are not consolidated and
are also accounted for using the equity method as GATX does not have effective
or voting control of these legal entities. The investments in affiliated
companies are initially recorded at cost and are subsequently adjusted for
GATX's share of the affiliate's undistributed earnings. Distributions, which
include both dividends and the return of principal, reduce the carrying amount
of the investment.

NEW ACCOUNTING PRONOUNCEMENTS

     Effective January 1, 2001, GATX adopted Statement of Financial Accounting
Standards (SFAS) No. 133, Accounting for Derivative Instruments and Hedging
Activities, as amended by SFAS No. 137, Accounting for Derivative Instruments
and Hedging Activities -- Deferral of the Effective Date of FASB Statement No.
133, and SFAS No. 138, Accounting for Certain Derivative Instruments and Certain
Hedging Activities -- an amendment of FASB Statement No. 133. SFAS No. 133, as
amended, establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts. The statement requires that an entity recognize all derivatives as
either assets or liabilities in the

                                        27
<PAGE>

statement of financial position and measure those instruments at fair value.
Derivatives that are not hedges must be adjusted to fair value through income.
If the derivative is a hedge, depending on the qualified nature of the hedge,
changes in fair value of the derivative will either be offset against the change
in fair value of the hedged assets, liabilities, or firm commitments through
earnings or recognized in other comprehensive (loss) income. The change in fair
value of the ineffective portion of a hedge will be immediately recognized in
earnings.

     GATX frequently obtains stock and warrants from non-public, venture
capital-backed companies in connection with its financing activities. Under
previous accounting guidance, both the stock and warrants were generally
accounted for as available-for-sale securities in accordance with SFAS No. 115,
Accounting for Certain Investments in Debt and Equity Securities, with changes
in fair value recorded as unrealized gains or losses in other comprehensive
(loss) income in the equity section of the balance sheet.

     Upon adoption of SFAS No. 133, as amended, these warrants will be accounted
for as derivatives, with prospective changes in fair value recorded in current
earnings. Stock will continue to be accounted for in accordance with SFAS No.
115.

     Apart from warrants, GATX uses interest rate swap agreements, Treasury
derivatives, currency swap agreements, and forward currency sale agreements, as
hedges to manage its exposure to interest rate and currency exchange rate risk
on existing and anticipated transactions. To qualify for hedge accounting under
previous accounting guidance, the derivative instrument must be identified with
and reduce the risk arising from a specific transaction. Interest income or
expense on interest rate swaps and Treasury derivatives was accrued and recorded
as an adjustment to the interest income or expense related to the hedged item.
Realized and unrealized gains on currency swaps and forwards were deferred and
included in the measurement of the hedged investment over the term of the
contract. Fair value changes arising from forward sale agreements were deferred
in the investment section of the balance sheet and recognized as part of other
comprehensive (loss) income in shareholders' equity. The adoption of SFAS No.
133 resulted in $1.1 million being recognized as expense in the consolidated
statement of income and $4.7 million of unrealized gain in other comprehensive
(loss) income in the first quarter of 2001.

     In June 2001, the Financial Accounting Standards Board issued SFAS No. 141,
Business Combinations and SFAS No. 142, Goodwill and Other Intangible Assets,
effective for fiscal years beginning after December 15, 2001. Under the new
rules, goodwill and intangible assets deemed to have indefinite lives will no
longer be amortized but will be subject to annual impairment testing in
accordance with the statements. Other intangible assets will continue to be
amortized over their useful lives.

     GATX will apply the new rules on accounting for goodwill and other
intangible assets beginning in the first quarter of 2002. Application of the
nonamortization provisions of the statement is expected to result in an increase
in pre-tax income from continuing operations of approximately $7.7 million in
2002. During 2002, GATX will perform the first of the required impairment tests
of goodwill and indefinite lived intangible assets as of January 1, 2002, and
has not yet determined what impact, if any, such review will have on the
earnings and financial position of the Company.

     In October 2001, the Financial Accounting Standards Board issued SFAS No.
144, Accounting for the Impairment or Disposal of Long-Lived Assets, effective
for fiscal years beginning after December 15, 2001. This statement supercedes
SFAS No. 121, Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to be Disposed of. Although the new rules retain many of the
fundamental recognition and measurement provisions of SFAS No. 121, they modify
the criteria required to classify an asset as held-for-sale. SFAS No. 144 will
also supersede certain provisions of APB Opinion 30 with regard to reporting the
effects of a disposal of a segment of a business and will require expected
future operating losses from discontinued operations to be separately reported
in discontinued operations during the period in which the losses are incurred
(rather than as of the measurement date as presently required by APB 30). GATX
is currently assessing the impact, if any, of this statement on the Company.

                                        28
<PAGE>

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     GATX, like most other companies, is exposed to certain market risks,
including changes in interest rates and currency exchange rates. To manage these
risks, GATX, pursuant to established and authorized policies, enters into
certain derivative transactions, principally interest rate swaps, Treasury
derivatives and currency swaps. These instruments and other derivatives are
entered into for hedging purposes only. GATX does not hold or issue derivative
financial instruments for speculative purposes.

     GATX's interest expense is affected by changes in interest rates as a
result of its use of variable rate debt instruments, including commercial paper
and other floating rate debt. Based on GATX's variable rate debt at December 31,
2001, if market rates were to increase hypothetically by 10% of GATX's weighted
average floating rate, after-tax interest expense would increase by
approximately $2.0 million in 2002.

     Changes in certain currency exchange rates would also affect GATX's
reported earnings. Based on 2001 reported earnings from continuing operations, a
uniform and hypothetical 10% strengthening in the U.S. dollar versus applicable
foreign currencies would decrease after-tax income from continuing operations in
2002 by approximately $1.5 million.

     The interpretation and analysis of the results from the hypothetical
changes to interest rates and currency exchange rates should not be considered
in isolation; such changes would typically have corresponding offsetting
effects. For example, offsetting effects are present to the extent that floating
rate debt is associated with floating rate assets.

                                        29
<PAGE>

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                           REPORT OF GATX MANAGEMENT

To Our Shareholders

     The management of GATX Corporation is responsible for the preparation,
integrity and objectivity of the accompanying consolidated financial statements
and the related financial information included in the Annual Report on Form 10-K
to shareholders. The financial statements have been prepared in conformity with
generally accepted accounting principles and necessarily include certain amounts
which are based on estimates and informed judgments of management.

     The financial statements have been audited by the Company's independent
auditors, whose report thereon appears on page 31. Their role is to form an
independent opinion as to the fairness with which such statements present the
financial position of the Company and the results of its operations.

     GATX maintains a system of internal accounting controls which is designed
to provide reasonable assurance as to the reliability of its financial records
and the protection of its shareholders' assets. The concept of reasonable
assurance is based on the recognition that the cost of a system of internal
control should not exceed the related benefits. Management believes the
Company's system provides this appropriate balance in all material respects.

     GATX's system of internal controls is further augmented by an audit
committee composed of independent directors, that meets several times during the
year with management, the independent auditors and the internal auditors; an
internal audit program that includes prompt, responsive action by management;
and the annual audit of the Company's financial statements by independent
auditors.

<Table>
<S>                            <C>                             <C>
       RONALD H. ZECH                 BRIAN A. KENNEY               WILLIAM M. MUCKIAN
   Chairman, President and          Vice President and          Vice President, Controller
   Chief Executive Officer        Chief Financial Officer                   and
                                                                 Chief Accounting Officer
</Table>

                                        30
<PAGE>

                         REPORT OF INDEPENDENT AUDITORS

To the Shareholders and Board of Directors of GATX Corporation

     We have audited the accompanying consolidated balance sheets of GATX
Corporation and subsidiaries as of December 31, 2001 and 2000, and the related
consolidated statements of income, changes in shareholders' equity,
comprehensive income, and cash flows for each of the three years in the period
ended December 31, 2001. Our audits also included the financial statement
schedules listed in the index at Item 14(a). These financial statements and
schedules are the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statements and schedules based on
our audits.

     We conducted our audits in accordance with auditing standards generally
accepted in the 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 consolidated financial position of GATX
Corporation and subsidiaries as of December 31, 2001 and 2000, and the results
of their operations and cash flows for each of the three years in the period
ended December 31, 2001, in conformity with accounting principles generally
accepted in the United States. Also, in our opinion, the related financial
statement schedules, when considered in relation to the basic financial
statements taken as a whole, present fairly in all material respects, the
information set forth therein.

                                          ERNST & YOUNG LLP

Chicago, Illinois
January 22, 2002

                                        31
<PAGE>

                       CONSOLIDATED STATEMENTS OF INCOME

<Table>
<Caption>
                                                                     YEAR ENDED DECEMBER 31
                                                              ------------------------------------
                                                                 2001         2000         1999
                                                              ----------   ----------   ----------
                                                               IN MILLIONS, EXCEPT PER SHARE DATA
<S>                                                           <C>          <C>          <C>
GROSS INCOME
Revenues....................................................   $1,488.6     $1,311.8     $1,195.0
Share of affiliates' earnings...............................       32.8         78.1         63.6
                                                               --------     --------     --------
TOTAL GROSS INCOME..........................................    1,521.4      1,389.9      1,258.6

OWNERSHIP COSTS
Depreciation and amortization...............................      415.9        333.9        254.6
Interest, net...............................................      249.9        242.6        179.9
Operating lease expense.....................................      194.8        178.7        153.0
                                                               --------     --------     --------
TOTAL OWNERSHIP COSTS.......................................      860.6        755.2        587.5

OTHER COSTS AND EXPENSES
Operating expenses..........................................      241.1        188.8        247.6
Selling, general and administrative.........................      229.7        209.2        203.4
Provision for possible losses...............................       98.4         17.7         11.0
Asset impairment charges....................................       85.2          5.0           --
Provision (reversal) for litigation charges.................      (13.1)       160.5           --
Reduction in workforce charges..............................       13.4           --           --
Fair value adjustments for derivatives......................         .5           --           --
                                                               --------     --------     --------
TOTAL OTHER COSTS AND EXPENSES..............................      655.2        581.2        462.0

INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES.......        5.6         53.5        209.1
INCOME TAX (BENEFIT) PROVISION..............................       (1.9)        22.7         82.8
                                                               --------     --------     --------
INCOME FROM CONTINUING OPERATIONS...........................        7.5         30.8        126.3

DISCONTINUED OPERATIONS
Operating results, net of taxes.............................        1.5         27.4         25.0
Gain on sale of portion of segment, net of taxes............      163.9          8.4           --
                                                               --------     --------     --------
TOTAL DISCONTINUED OPERATIONS...............................      165.4         35.8         25.0
                                                               --------     --------     --------

NET INCOME..................................................   $  172.9     $   66.6     $  151.3
                                                               ========     ========     ========
PER SHARE DATA
Basic:
  Income from continuing operations.........................   $    .15     $    .64     $   2.56
  Income from discontinued operations.......................       3.41          .75          .51
                                                               --------     --------     --------
  Total.....................................................   $   3.56     $   1.39     $   3.07
                                                               ========     ========     ========
  Average number of common shares (in thousands)............     48,512       47,880       49,296
Diluted:
  Income from continuing operations.........................   $    .15     $    .63     $   2.51
  Income from discontinued operations.......................       3.36          .74          .50
                                                               --------     --------     --------
  Total.....................................................   $   3.51     $   1.37     $   3.01
                                                               ========     ========     ========
  Average number of common shares and common share
     equivalents (in thousands).............................     49,202       48,753       50,301

Dividends declared per common share.........................   $   1.24     $   1.20     $   1.10
                                                               ========     ========     ========
</Table>

The accompanying notes are an integral part of these consolidated financial
statements.
                                        32
<PAGE>

                          CONSOLIDATED BALANCE SHEETS

<Table>
<Caption>
                                                                   DECEMBER 31
                                                              ---------------------
                                                                2001        2000
                                                              ---------   ---------
                                                                   IN MILLIONS
<S>                                                           <C>         <C>
ASSETS

CASH AND CASH EQUIVALENTS...................................  $   222.9   $   158.0
RESTRICTED CASH.............................................      124.4        15.6

RECEIVABLES
Rent and other receivables..................................      144.2       124.9
Finance leases..............................................      868.3       878.3
Secured loans...............................................      557.4       538.0
Less: allowance for possible losses.........................      (94.2)      (95.2)
                                                              ---------   ---------
                                                                1,475.7     1,446.0
OPERATING LEASE ASSETS, FACILITIES AND OTHER
Railcars and service facilities.............................    2,958.2     2,949.9
Operating lease investments and other.......................    1,794.0     1,488.7
Less: allowance for depreciation............................   (2,028.3)   (1,779.4)
                                                              ---------   ---------
                                                                2,723.9     2,659.2
Progress payments for aircraft and other equipment..........      260.0        11.5
                                                              ---------   ---------
                                                                2,983.9     2,670.7

INVESTMENTS IN AFFILIATED COMPANIES.........................      953.0       967.9
OTHER ASSETS................................................      349.8       374.6
NET ASSETS OF DISCONTINUED OPERATIONS.......................         --       630.9
                                                              ---------   ---------
                                                              $ 6,109.7   $ 6,263.7
                                                              =========   =========
LIABILITIES, DEFERRED ITEMS AND SHAREHOLDERS' EQUITY

ACCOUNTS PAYABLE............................................  $   293.6   $   317.3
ACCRUED EXPENSES............................................       36.8       127.4

DEBT
Short-term..................................................      328.5       557.2
Long-term:
  Recourse..................................................    2,897.3     3,093.9
  Nonrecourse...............................................      728.2       494.2
Capital lease obligations...................................      163.0       164.2
                                                              ---------   ---------
                                                                4,117.0     4,309.5

DEFERRED INCOME TAXES.......................................      464.5       410.8
OTHER DEFERRED ITEMS........................................      316.0       309.2
                                                              ---------   ---------
TOTAL LIABILITIES AND DEFERRED ITEMS........................    5,227.9     5,474.2

SHAREHOLDERS' EQUITY
Preferred stock.............................................         --          --
Common stock................................................       35.4        35.0
Additional capital..........................................      384.7       366.1
Reinvested earnings.........................................      664.9       552.2
Accumulated other comprehensive loss........................      (74.1)      (34.4)
                                                              ---------   ---------
                                                                1,010.9       918.9
Less: cost of common shares in treasury.....................     (129.1)     (129.4)
                                                              ---------   ---------
TOTAL SHAREHOLDERS' EQUITY..................................      881.8       789.5
                                                              ---------   ---------
                                                              $ 6,109.7   $ 6,263.7
                                                              =========   =========
</Table>

The accompanying notes are an integral part of these consolidated financial
statements.
                                        33
<PAGE>

                     CONSOLIDATED STATEMENTS OF CASH FLOWS

<Table>
<Caption>
                                                                   YEAR ENDED DECEMBER 31
                                                              ---------------------------------
                                                                2001        2000        1999
                                                              ---------   ---------   ---------
                                                                         IN MILLIONS
<S>                                                           <C>         <C>         <C>
OPERATING ACTIVITIES
Income from continuing operations...........................  $     7.5   $    30.8   $   126.3
Adjustments to reconcile income from continuing operations
  to net cash provided by continuing operations:
    Realized gains on remarketing of leased equipment.......      (79.9)      (53.4)      (60.1)
    Gain on sales of securities.............................      (38.7)      (52.3)      (14.7)
    Depreciation and amortization...........................      415.9       333.9       254.6
    Provision for possible losses...........................       98.4        17.7        11.0
    Asset impairment charges................................       85.2         5.0          --
    Deferred income taxes...................................      126.9        26.8        53.0
    Provision (reversal) for litigation charges.............      (13.1)      160.5          --
    Payments related to litigation settlement...............     (141.0)       (6.0)         --
Other, including working capital............................     (105.5)      (65.2)      (97.0)
                                                              ---------   ---------   ---------
    Net cash provided by continuing operations..............      355.7       397.8       273.1

INVESTING ACTIVITIES
Additions to equipment on lease, net of nonrecourse
  financing for leveraged leases............................     (672.2)     (700.8)     (697.0)
Additions to operating lease assets and facilities..........     (168.8)     (394.5)     (366.4)
Secured loans extended......................................     (305.5)     (436.1)     (268.8)
Investments in affiliated companies.........................     (249.4)     (244.4)     (168.0)
Progress payments...........................................     (300.1)     (123.4)     (105.1)
Other investments...........................................      (98.2)      (29.2)        (.7)
                                                              ---------   ---------   ---------
Portfolio investments and capital additions.................   (1,794.2)   (1,928.4)   (1,606.0)
Portfolio proceeds..........................................    1,031.4       627.8       517.7
Proceeds from other asset sales.............................      207.1       304.3       208.7
                                                              ---------   ---------   ---------
    Net cash used in investing activities of continuing
      operations............................................     (555.7)     (996.3)     (879.6)

FINANCING ACTIVITIES
Proceeds from issuance of long-term debt....................      790.3     1,587.4       981.5
Repayment of long-term debt.................................   (1,018.2)   (1,072.2)     (351.6)
Net (decrease) increase in short-term debt..................     (228.7)      180.2        95.6
Repayment of capital lease obligations......................       (1.2)      (15.7)      (16.3)
Issuance (repurchase) of common stock and other.............       19.3       (20.1)      (27.3)
Cash dividends..............................................      (60.2)      (57.4)      (54.3)
                                                              ---------   ---------   ---------
    Net cash (used in) provided by financing activities of
      continuing operations.................................     (498.7)      602.2       627.6
NET TRANSFERS (TO) FROM DISCONTINUED OPERATIONS.............      (30.7)       10.7       (19.6)
                                                              ---------   ---------   ---------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS FROM
  CONTINUING OPERATIONS.....................................     (729.4)       14.4         1.5
PROCEEDS FROM SALE OF PORTION OF SEGMENT....................    1,185.0        74.7          --
TAXES PAID ON GAIN FROM SALE OF SEGMENT.....................     (281.9)         --          --
                                                              ---------   ---------   ---------
                                                                  173.7        89.1         1.5
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS FROM
  DISCONTINUED OPERATIONS...................................      (12.3)       (5.5)        6.5
                                                              ---------   ---------   ---------
NET INCREASE IN CASH AND CASH EQUIVALENTS...................  $   161.4   $    83.6   $     8.0
                                                              =========   =========   =========
</Table>

The accompanying notes are an integral part of these consolidated financial
statements.
                                        34
<PAGE>

           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

<Table>
<Caption>
                                                                    DECEMBER 31
                                         ------------------------------------------------------------------
                                          2001      2000      1999        2001         2000         1999
                                         DOLLARS   DOLLARS   DOLLARS     SHARES       SHARES       SHARES
                                         -------   -------   -------   ----------   ----------   ----------
                                                        IN MILLIONS, EXCEPT NUMBER OF SHARES
<S>                                      <C>       <C>       <C>       <C>          <C>          <C>
PREFERRED STOCK
Balance at beginning of period.........  $    --   $    --   $   --        23,614       25,311       26,065
Conversion of preferred stock into
  common stock.........................       --        --       --          (203)      (1,697)        (754)
                                         -------   -------   ------    ----------   ----------   ----------
Balance at end of period...............       --        --       --        23,411       23,614       25,311

COMMON STOCK
Balance at beginning of period.........     35.0      34.5     34.3    56,020,736   55,198,346   54,822,163
Issuance of common stock...............       .4        .5       .2       713,634      813,905      372,413
Conversion of preferred stock into
  common stock.........................       --        --       --         1,015        8,485        3,770
                                         -------   -------   ------    ----------   ----------   ----------
Balance at end of period...............     35.4      35.0     34.5    56,735,385   56,020,736   55,198,346

TREASURY STOCK
Balance at beginning of period.........   (129.4)    (81.4)   (46.8)   (8,002,595)  (6,599,047)  (5,538,230)
Purchase of common stock...............       --     (48.0)   (34.6)           --   (1,407,900)  (1,065,010)
Issuance of stock......................       .3        --       --        23,433        4,352        4,193
                                         -------   -------   ------    ----------   ----------   ----------
Balance at end of period...............   (129.1)   (129.4)   (81.4)   (7,979,162)  (8,002,595)  (6,599,047)

ADDITIONAL CAPITAL
Balance at beginning of period.........    366.1     338.7    331.6
Issuance of common stock...............     18.6      27.4      7.1
                                         -------   -------   ------
Balance at end of period...............    384.7     366.1    338.7

REINVESTED EARNINGS
Balance at beginning of period.........    552.2     543.0    446.0
Net income.............................    172.9      66.6    151.3
Dividends declared.....................    (60.2)    (57.4)   (54.3)
                                         -------   -------   ------
Balance at end of period...............    664.9     552.2    543.0

ACCUMULATED OTHER COMPREHENSIVE (LOSS)
  INCOME
Balance at beginning of period.........    (34.4)      1.2    (32.2)
Foreign currency translation (loss)
  gain.................................     (3.3)    (28.6)     5.1
Unrealized (loss) gain on securities,
  net..................................    (24.5)     (7.0)    28.3
Unrealized loss on derivative
  instruments..........................     (6.9)       --       --
Minimum pension liability..............     (5.0)       --       --
                                         -------   -------   ------
Balance at end of period...............    (74.1)    (34.4)     1.2
                                         -------   -------   ------
Total Shareholders' Equity.............  $ 881.8   $ 789.5   $836.0
                                         =======   =======   ======
</Table>

The accompanying notes are an integral part of these consolidated financial
statements.
                                        35
<PAGE>

                CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

<Table>
<Caption>
                                                               YEAR ENDED DECEMBER 31
                                                              ------------------------
                                                               2001     2000     1999
                                                              ------   ------   ------
                                                                    IN MILLIONS
<S>                                                           <C>      <C>      <C>
Net income..................................................  $172.9   $ 66.6   $151.3
Other comprehensive (loss) income, net of tax:
  Foreign currency translation (loss) gain..................    (3.3)   (28.6)     5.1
  Unrealized (loss) gain on securities, net of
     reclassification adjustments(a)........................   (24.5)    (7.0)    28.3
  Unrealized loss on derivative instruments.................    (6.9)      --       --
  Minimum pension liability.................................    (5.0)      --       --
                                                              ------   ------   ------
Other comprehensive (loss) income...........................   (39.7)   (35.6)    33.4
                                                              ------   ------   ------
COMPREHENSIVE INCOME........................................  $133.2   $ 31.0   $184.7
                                                              ======   ======   ======
(a) Reclassification adjustments:
    Unrealized (loss) gain on securities....................  $ (1.0)  $ 24.6   $ 37.3
    Less: reclassification adjustments for gains realized
        included in net income..............................   (23.5)   (31.6)    (9.0)
                                                              ------   ------   ------
    Net unrealized (loss) gain on securities................  $(24.5)  $ (7.0)  $ 28.3
                                                              ======   ======   ======
</Table>

The accompanying notes are an integral part of these consolidated financial
statements.
                                        36
<PAGE>

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.  SIGNIFICANT ACCOUNTING POLICIES

     Consolidation -- The consolidated financial statements include the accounts
of GATX and its majority-owned subsidiaries. Investments in 20 to 50
percent-owned companies and joint ventures are accounted for under the equity
method and are shown as investments in affiliated companies, with pre-tax
operating results shown as share of affiliates' earnings. Certain investments in
joint ventures that exceed 50% ownership are not consolidated and are also
accounted for using the equity method as GATX does not have effective or voting
control of these legal entities. The consolidated financial statements reflect
the ISG segment as discontinued operations for all periods presented.

     Cash Equivalents -- GATX considers all highly liquid investments with a
maturity of three months or less when purchased to be cash equivalents.

     Operating Lease Assets and Facilities -- Operating lease assets and
facilities are stated principally at cost. Assets acquired under capital leases
are included in operating lease assets and the related obligations are recorded
as liabilities. Provisions for depreciation include the amortization of capital
leases. Operating lease assets and facilities are depreciated using the
straight-line method to an estimated residual value. Assets listed below are
depreciated over their estimated useful lives. Technology equipment, machinery
and related equipment are depreciated over the term of the lease contract. The
estimated useful lives of depreciable assets are as follows:

<Table>
<S>                                                           <C>
Railcars....................................................  20 - 38 years
Locomotives.................................................       28 years
Aircraft....................................................       25 years
Buildings and leasehold improvements........................   5 - 40 years
Marine vessels..............................................  15 - 50 years
</Table>

     Operating lease assets and facilities by segment and business unit are as
follows (in millions):

<Table>
<Caption>
                                                                   DECEMBER 31
                                                              ---------------------
                                                                2001        2000
                                                              ---------   ---------
<S>                                                           <C>         <C>
GATX RAIL...................................................  $ 2,958.2   $ 2,949.9
FINANCIAL SERVICES
  Air.......................................................      553.1       539.1
  Specialty Finance.........................................      415.2       306.8
  Technology................................................      755.9       597.1
  Venture Finance...........................................       10.9          --
  Other.....................................................       40.9        26.4
                                                              ---------   ---------
TOTAL FINANCIAL SERVICES....................................    1,776.0     1,469.4
CORPORATE AND OTHER.........................................       18.0        19.3
                                                              ---------   ---------
                                                                4,752.2     4,438.6
                                                              ---------   ---------
LESS: ALLOWANCE FOR DEPRECIATION............................   (2,028.3)   (1,779.4)
                                                              ---------   ---------
                                                              $ 2,723.9   $ 2,659.2
                                                              =========   =========
</Table>

     Progress Payments for Aircraft and Other Equipment -- GATX classifies
amounts paid toward the construction of wholly owned aircraft and other
equipment, including capitalized interest, as progress payments.

     Goodwill -- GATX has classified the cost in excess of the fair value of net
assets acquired as goodwill. Goodwill, which is included in other assets, is
being amortized on a straight-line basis over 10 to 40 years. GATX continually
evaluates the existence of goodwill impairment on the basis of whether the
goodwill is

                                        37
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

recoverable from projected undiscounted net cash flows of the related business.
Goodwill, net of accumulated amortization of $24.3 million and $17.1 million,
was $63.3 million and $39.9 million as of December 31, 2001 and 2000,
respectively. Amortization expense was $4.6 million, $6.3 million and $2.5
million in 2001, 2000, and 1999, respectively.

     Long-Lived Assets -- A review for impairment of long-lived assets, such as
operating lease assets and facilities, is performed whenever events or changes
in circumstances indicate that the carrying amount of long-lived assets may not
be recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to future net cash flows expected
to be generated by the asset. If such assets are considered to be impaired, the
impairment to be recognized is measured by the amount by which the carrying
amount of the assets exceeds the fair value of the assets. Assets to be disposed
of are reported at the lower of the carrying amount or fair value less costs to
sell.

     Allowance for Possible Losses -- The purpose of the allowance is to provide
for credit and collateral losses inherent in the investment portfolio. GATX sets
the allowance by assessing overall risk and total probable losses in the
portfolio and by reviewing GATX's historical loss experience. GATX charges off
amounts that management considers unrecoverable from obligors or the disposition
of collateral. GATX assesses the recoverability of investments by considering
factors such as a customer's payment history and financial position, and the
value of collateral based on internal and external appraisal sources. The
allowance for possible losses is periodically reviewed for adequacy considering
changes in economic conditions, collateral values and credit quality indicators.
GATX believes that the allowance is adequate to cover losses inherent in the
portfolio as of December 31, 2001. Because the allowance is based on judgments
and estimates, it is possible that those judgments and estimates could change in
the future, causing a corresponding change in the recorded allowance.

     Income Taxes -- United States income taxes have not been provided on the
undistributed earnings of foreign subsidiaries and affiliates that GATX intends
to permanently reinvest in these foreign operations. The cumulative amount of
such earnings was $172.8 million at December 31, 2001.

     Other Deferred Items -- Other deferred items include the accrual for
post-retirement benefits other than pensions; environmental, general liability,
litigation and workers' compensation reserves; and other deferred credits.

     Derivatives -- Effective January 1, 2001, GATX adopted SFAS No. 133,
Accounting for Derivative Instruments and Hedging Activities, as amended by SFAS
No. 137, Accounting for Derivative Instruments and Hedging
Activities -- Deferral of the Effective Date of FASB Statement No. 133, and SFAS
No. 138, Accounting for Certain Derivative Instruments and Certain Hedging
Activities -- an amendment of FASB Statement No. 133. SFAS No. 133, as amended,
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts. The
statement requires that an entity recognize all derivatives as either assets or
liabilities in the statement of financial position and measure those instruments
at fair value. GATX records the fair value of all derivatives as either other
assets or long term recourse debt on the balance sheet. At December 31, 2001,
GATX had not discontinued any hedges because it was probable that the original
forecasted transaction would not occur.

     Instruments that meet established accounting criteria are formally
designated as qualifying hedges at the inception of the contract. These criteria
demonstrate that the derivative is expected to be highly effective at offsetting
changes in fair value of underlying exposure both at inception of the hedging
relationship and on an ongoing basis. The change in fair value of the
ineffective portion of all hedges is immediately recognized in earnings. For the
year ended December 31, 2001, a loss of $0.9 million was recognized in earnings
for hedge ineffectiveness. Derivatives that are not designated as qualifying
hedges are adjusted to fair value through earnings immediately. For the year
ended December 31, 2001, a net gain of $0.4 million was recognized in earnings
for derivatives not qualifying as hedges.

                                        38
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     GATX uses interest rate and currency swap agreements, Treasury derivatives,
and forward sale agreements as hedges to manage its exposure to interest rate
and currency exchange rate risk on existing and anticipated transactions. GATX
also enters into foreign exchange forward contracts to hedge foreign currency
exposure of a net investment in a foreign operation.

Fair Value Hedges
     For derivatives designated as fair value hedges, changes in both the
derivative and the hedged item attributable to the risk being hedged are
recognized in earnings.

Cash Flow Hedges
     For derivatives designated as cash flow hedges, the effective portion of
the derivative's gain or loss is recorded as part of other comprehensive (loss)
income in shareholders' equity and subsequently recognized in the income
statement when the hedged forecasted transaction affects earnings. Gains or
losses resulting from the early termination of derivatives designated as cash
flow hedges are included in other comprehensive (loss) income and recognized in
income when the original hedged transaction affects earnings.

Hedge of Net Investment in Foreign Operations
     Changes in fair value of derivatives designated as a hedge of the net
investment in foreign operations are included in other comprehensive (loss)
income as part of the cumulative translation adjustment.

     The adoption of SFAS No. 133, as amended, resulted in $1.1 million being
recognized as expense in the consolidated statement of income and $4.7 million
of unrealized gain in other comprehensive (loss) income in the first quarter
2001.

     Prior to January 1, 2001 and the adoption of SFAS No. 133, as amended, GATX
used financial instruments such as interest rate and currency swaps, forwards
and similar contracts to set interest and exchange rates on existing or
anticipated transactions, which were not recorded on the balance sheet. The fair
values of GATX's off balance sheet financial instruments (futures, swaps,
forwards, options, guarantees, and lending and purchase commitments) were based
on current market prices, settlement values or fees currently charged to enter
into similar agreements. Fair values of hedge contracts were not recognized in
the financial statements. Net amounts paid or received on such contracts were
recognized over the term of the contract as an adjustment to interest expense or
the basis of the hedged financial instrument.

     Environmental Liabilities -- Expenditures that relate to current or future
operations are expensed or capitalized as appropriate. Expenditures that relate
to an existing condition caused by past operations, and which do not contribute
to current or future revenue generation, are charged to environmental reserves.
Reserves are recorded in accordance with accounting guidelines to cover work at
identified sites when GATX's liability for environmental cleanup is both
probable and a reasonable estimate of associated costs can be made; adjustments
to initial estimates are recorded as necessary.

     Revenue Recognition -- The majority of GATX's gross income is derived from
the rentals of railcars, commercial aircraft, technology equipment, and marine
vessels. In addition, income is derived from finance leases, asset remarketing,
sales of equity securities, secured loans, technology equipment sales, and other
services.

     Lease and Loan Origination Costs -- Initial direct costs of leases are
deferred and amortized over the lease term, either as an adjustment to the yield
for direct finance and leveraged leases (collectively, finance leases), or on a
straight-line basis for operating leases. Loan origination fees and related
direct loan origination costs for a given loan are offset, and the net amount is
deferred and amortized over the term of the loan as an adjustment to interest
income.

                                        39
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Residual Values -- GATX has investments in the residual values of its
leasing portfolio. The residual values represent the estimate of the values of
the assets at the end of the lease contracts. GATX initially records these based
on appraisals and estimates. Realization of the residual values is dependent on
GATX's future ability to market the assets under existing market conditions.
GATX reviews residual values periodically to determine that recorded amounts are
appropriate. For finance leases, GATX reviews the estimated residual values of
leased equipment at least annually, and any other-than-temporary declines in
value are immediately charged to income. For operating leases, GATX reviews the
estimated salvage values of leased equipment at least annually, and changes in
values are recorded as adjustments to depreciation expense over the remaining
useful life of the asset. In addition to a periodic review, if events or changes
in circumstances trigger a review of operating lease assets for impairment, any
such impairment is immediately charged to income as an impairment loss.

     Investments in Equity Securities -- GATX's venture portfolio includes stock
warrants received from investee companies and common stock resulting from
exercising the warrants. Under the provisions of SFAS No. 133, as amended, the
warrants are accounted for as derivatives, with changes in fair value recorded
in current earnings. All other investments are classified as available-for-sale
in accordance with SFAS No. 115, Accounting for Certain Investments in Debt and
Equity Securities. The securities are carried at fair value. Unrealized gains
and losses arising from marking the portfolio to fair value are included on a
net-of-tax basis as a separate component of accumulated other comprehensive
(loss) income. The unrealized gains on these securities were $3.4 million and
$27.9 million at the end of 2001 and 2000, respectively.

     Foreign Currency Translation -- The assets and liabilities of GATX's
operations located outside the United States are translated at exchange rates in
effect at year end, and income statements are translated at the average exchange
rates for the year. Adjustments resulting from the translation of foreign
currency financial statements are deferred and recorded as a separate component
of accumulated other comprehensive (loss) income in the shareholders' equity
section of the balance sheet. The cumulative foreign currency translation
adjustment was $(65.6) million and $(62.3) million at the end of 2001 and 2000,
respectively.

     Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles necessarily requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements as well as revenues and expenses during the reporting
period. Actual amounts when ultimately realized could differ from those
estimates.

     Reclassification -- Certain amounts in the 2000 and 1999 financial
statements have been reclassified to conform to the 2001 presentation.

     New Accounting Pronouncements -- In June 2001, the Financial Accounting
Standards Board issued SFAS No. 141, Business Combinations and SFAS No. 142,
Goodwill and Other Intangible Assets, effective for fiscal years beginning after
December 15, 2001. SFAS No. 141 requires business combinations initiated after
June 30, 2001 to be accounted for using the purchase method of accounting. Under
SFAS No. 142, goodwill and intangible assets deemed to have indefinite lives
will no longer be amortized but will be subject to annual impairment testing in
accordance with the statements. Other intangible assets will continue to be
amortized over their useful lives.

     GATX will apply the new rules on accounting for goodwill and other
intangible assets beginning in the first quarter of 2002. Application of the
nonamortization provisions of the statement is expected to result in an increase
in pre-tax income from continuing operations of approximately $7.7 million in
2002. During 2002, GATX will perform the first of the required impairment tests
of goodwill and indefinite lived intangible assets as of January 1, 2002, and
has not yet determined what impact, if any, such review will have on the
earnings and financial position of the Company.

     In October 2001, the Financial Accounting Standards Board issued SFAS No.
144, Accounting for the Impairment or Disposal of Long-Lived Assets, effective
for fiscal years beginning after December 15, 2001.

                                        40
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

This statement supercedes SFAS No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of. Although
retaining many of the fundamental recognition and measurement provisions of SFAS
No. 121, the new rules modify the criteria required to classify an asset as
held-for-sale. SFAS No. 144 will also supersede certain provisions of APB
Opinion 30 with regard to reporting the effects of a disposal of a segment of a
business and will require expected future operating losses from discontinued
operations to be separately reported in discontinued operations during the
period in which the losses are incurred (rather than as of the measurement date
as presently required by APB 30). GATX is currently assessing the impact, if
any, of this statement on the Company.

NOTE 2.  ACCOUNTING FOR LEASES

     The following information pertains to GATX as a lessor:

     Finance Leases -- GATX's finance leases are comprised of direct financing
leases and leveraged leases. Investment in direct finance leases consists of
lease receivables, plus the estimated residual value of the equipment at the
lease termination dates, less unearned income. Lease receivables represent the
total rent to be received over the term of the lease reduced by rent already
collected. Initial unearned income is the amount by which the original sum of
the lease receivable and the estimated residual value exceeds the original cost
of the leased equipment. Unearned income is amortized to lease income over the
lease term in a manner that produces a constant rate of return on the net
investment in the lease.

     Finance leases that are financed principally with nonrecourse borrowings at
lease inception and that meet certain criteria are accounted for as leveraged
leases. Leveraged lease receivables are stated net of the related nonrecourse
debt. Initial unearned income represents the excess of anticipated cash flows
(including estimated residual values, net of the related debt service) over the
original investment in the lease.

     The components of the investment in finance leases were (in millions):

<Table>
<Caption>
                                                                  DECEMBER 31
                                                              -------------------
                                                                2001       2000
                                                              --------   --------
<S>                                                           <C>        <C>
Net minimum future lease receivables........................  $  894.9   $  800.7
Estimated residual values...................................     248.8      368.4
                                                              --------   --------
                                                               1,143.7    1,169.1
Less: unearned income.......................................    (275.4)    (290.8)
                                                              --------   --------
Investment in finance leases................................  $  868.3   $  878.3
                                                              ========   ========
</Table>

     Operating Leases -- The majority of railcar assets and certain other
equipment leases included in operating lease assets are accounted for as
operating leases. Rental income from operating leases is usually reported on a
straight-line basis over the term of the lease.

                                        41
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Minimum Future Receipts -- Minimum future lease receipts from finance
leases and minimum future rental receipts from noncancelable operating leases by
year at December 31, 2001 were (in millions):

<Table>
<Caption>
                                                          FINANCE   OPERATING
                                                          LEASES     LEASES      TOTAL
                                                          -------   ---------   --------
<S>                                                       <C>       <C>         <C>
2002....................................................  $328.9    $  829.8    $1,158.7
2003....................................................   195.7       525.0       720.7
2004....................................................    95.1       357.2       452.3
2005....................................................    54.6       245.8       300.4
2006....................................................    28.8       160.8       189.6
Years thereafter........................................   191.8       417.6       609.4
                                                          ------    --------    --------
                                                          $894.9    $2,536.2    $3,431.1
                                                          ======    ========    ========
</Table>

     The following information pertains to GATX as a lessee:

     Capital Leases -- Assets classified as operating lease assets and finance
leases that have been financed under capital leases were (in millions):

<Table>
<Caption>
                                                                 DECEMBER 31
                                                              -----------------
                                                               2001      2000
                                                              -------   -------
<S>                                                           <C>       <C>
Railcars....................................................  $ 159.1   $ 149.5
Marine vessels..............................................    147.7     147.7
Aircraft....................................................     15.2        --
                                                              -------   -------
                                                                322.0     297.2
Less: allowance for depreciation............................   (202.4)   (192.2)
                                                              -------   -------
                                                                119.6     105.0
Finance leases..............................................     12.3      19.4
                                                              -------   -------
                                                              $ 131.9   $ 124.4
                                                              =======   =======
</Table>

     Operating Leases -- GATX has financed railcars, aircraft, and other assets
through sale-leasebacks that are accounted for as operating leases. In addition,
GATX leases certain other assets and office facilities. For one of the operating
leases, a subsidiary of GATX has provided a guarantee to the lessor that the
residual value will be the projected fair market value of the assets. Total
operating lease expense for the years ended December 31, 2001, 2000, and 1999
was $194.8 million, $178.7 million, and $153.0 million, respectively.

                                        42
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Future Minimum Rental Payments -- Future minimum rental payments due under
noncancelable leases at December 31, 2001 were (in millions):

<Table>
<Caption>
                                                                               NONRECOURSE
                                                         CAPITAL   OPERATING    OPERATING
                                                         LEASES     LEASES       LEASES
                                                         -------   ---------   -----------
<S>                                                      <C>       <C>         <C>
2002...................................................  $ 35.1    $  136.5      $ 37.4
2003...................................................    32.7       129.8        40.0
2004...................................................    31.0       136.1        39.9
2005...................................................    19.2       147.7        41.5
2006...................................................    16.5       144.0        40.1
Years thereafter.......................................   102.6     1,299.7       519.5
                                                         ------    --------      ------
                                                          237.1    $1,993.8      $718.4
                                                                   ========      ======
Less: amounts representing interest....................   (74.1)
                                                         ------
Present value of future minimum capital lease
  payments.............................................  $163.0
                                                         ======
</Table>

     The above capital lease amounts and certain operating leases do not include
the costs of licenses, taxes, insurance, and maintenance that GATX is required
to pay. Interest expense on the above capital leases was $15.0 million in 2001,
$14.4 million in 2000, and $14.6 million in 1999.

     The amounts shown as nonrecourse operating leases reflect rental payments
of three bankruptcy remote, special-purpose corporations that are wholly owned
by GATX. These rentals are consolidated for accounting purposes, but do not
represent legal obligations of GATX.

NOTE 3.  SECURED LOANS

     Secured loans are recorded at the principal amount outstanding plus accrued
interest. The loan portfolio is reviewed regularly, and a loan is classified as
impaired and written down when it is probable that GATX will be unable to
collect all amounts due under the loan agreement. Since most loans are
collateralized, impairment is generally measured as the amount by which the
recorded investment in the loan exceeds the fair value of the collateral, and
any adjustment is considered in determining the provision for possible losses.
Generally, interest income is not recognized on impaired loans until the
outstanding principal is recovered.

     The types of loans in GATX's portfolio are as follows (in millions):

<Table>
<Caption>
                                                                DECEMBER 31
                                                              ---------------
                                                               2001     2000
                                                              ------   ------
<S>                                                           <C>      <C>
Equipment...................................................  $223.5   $333.1
Venture.....................................................   323.1    193.7
Golf Courses................................................    10.8     11.2
                                                              ------   ------
Total Investments...........................................  $557.4   $538.0
                                                              ======   ======
Impaired loans (included in total)..........................  $ 43.0   $ 62.9
                                                              ======   ======
</Table>

     Impaired loans with identified allowance for possible loss requirements
were $17.5 million and $42.1 million at December 31, 2001 and 2000,
respectively. The average balance of impaired loans was $53.0 million and $42.6
million in 2001 and 2000, respectively.

                                        43
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     At December 31, 2001, secured loan principal due by year was as follows (in
millions):

<Table>
<Caption>
                                                                LOAN
                                                              PRINCIPAL
                                                              ---------
<S>                                                           <C>
2002........................................................   $170.5
2003........................................................    146.2
2004........................................................     94.4
2005........................................................     18.5
2006........................................................     40.3
Years thereafter............................................     87.5
                                                               ------
                                                               $557.4
                                                               ======
</Table>

NOTE 4.  ALLOWANCE FOR POSSIBLE LOSSES

     The purpose of the allowance is to provide for credit losses inherent in
the investment portfolio. GATX sets the allowance by assessing overall risk and
probable losses in the portfolio and by reviewing the Company's historical loss
experience. GATX charges off amounts that management considers unrecoverable
from obligors or through the disposition of collateral. GATX assesses the
recoverability of investments by considering factors such as a customer's
payment history and financial position, and the value of collateral based on
internal and external appraisal sources.

     The following summarizes changes in the allowance for possible losses (in
millions):

<Table>
<Caption>
                                                             YEAR ENDED DECEMBER 31
                                                            -------------------------
                                                             2001      2000     1999
                                                            -------   ------   ------
<S>                                                         <C>       <C>      <C>
Balance at beginning of the year..........................  $  95.2   $113.5   $133.6
Provision for possible losses.............................     98.4     17.7     11.0
Charges to allowance......................................   (105.2)   (37.0)   (34.8)
Recoveries and other......................................      5.8      1.0      3.7
                                                            -------   ------   ------
Balance at end of the year................................  $  94.2   $ 95.2   $113.5
                                                            =======   ======   ======
</Table>

     The charges to allowance in 2001 were primarily due to write-offs related
to venture and steel related investments.

     There were no material changes in estimation methods or assumptions for the
allowances during 2001. GATX believes that the allowance is adequate to cover
losses inherent in the portfolio as of December 31, 2001. Because the allowance
is based on judgments and estimates, it is possible that those judgments and
estimates could change in the future, causing a corresponding change in the
recorded allowance.

NOTE 5.  INVESTMENTS IN AFFILIATED COMPANIES

     Investments in affiliated companies represent investments in domestic and
foreign companies and joint ventures that are in businesses similar to those of
GATX, such as commercial aircraft leasing, rail equipment leasing, technology
equipment leasing and other business activities, including ventures that provide
asset residual value guarantees in both domestic and foreign markets.

     The investments in affiliated companies are initially recorded at cost,
including goodwill at acquisition date, and are subsequently adjusted for GATX's
share of affiliates' undistributed earnings. Share of affiliates' earnings is
also adjusted for the amortization of goodwill. Distributions, which reflect
both dividends and the return of principal, reduce the carrying amount of the
investment. Distributions received from such affiliates were $225.6 million,
$119.7 million, and $68.3 million in 2001, 2000 and 1999, respectively.

                                        44
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     GATX has two investments that are in excess of 10% of the total investment
in affiliated companies; a 12.1% investment in an Air affiliate and a 10.2%
investment in a Specialty Finance affiliate. The following table shows GATX's
investments in affiliated companies by segment and business unit (in millions):

<Table>
<Caption>
                                                                DECEMBER 31
                                                              ---------------
                                                               2001     2000
                                                              ------   ------
<S>                                                           <C>      <C>
GATX RAIL...................................................  $200.6   $205.9
FINANCIAL SERVICES
  Air.......................................................   523.5    512.4
  Specialty Finance.........................................   205.9    184.0
  Technology................................................    14.1     13.0
  Venture Finance...........................................     8.9     52.1
                                                              ------   ------
TOTAL FINANCIAL SERVICES....................................   752.4    761.5
CORPORATE AND OTHER.........................................      --       .5
                                                              ------   ------
                                                              $953.0   $967.9
                                                              ======   ======
</Table>

     Affiliated companies conduct their businesses throughout the world and
there is no geographical concentration of risk.

     The following table shows GATX's pre-tax share of affiliates' earnings by
segment and business unit (in millions):

<Table>
<Caption>
                                                              YEAR ENDED DECEMBER 31
                                                              ----------------------
                                                               2001    2000    1999
                                                              ------   -----   -----
<S>                                                           <C>      <C>     <C>
GATX RAIL...................................................  $  7.4   $20.6   $22.5
FINANCIAL SERVICES
  Air.......................................................    33.1    34.6    25.3
  Specialty Finance.........................................    21.9    15.8    14.1
  Technology................................................     2.4     3.1     (.2)
  Venture Finance...........................................   (32.0)    3.9     1.9
                                                              ------   -----   -----
TOTAL FINANCIAL SERVICES....................................    25.4    57.4    41.1
CORPORATE AND OTHER.........................................      --      .1      --
                                                              ------   -----   -----
                                                              $ 32.8   $78.1   $63.6
                                                              ======   =====   =====
</Table>

     For purposes of preparing the following information, GATX makes certain
adjustments to the information provided by the joint ventures. Pre-tax income is
adjusted to reverse interest expense recognized by the joint ventures on loans
from the Company. In addition, the Company records its loans to the joint
ventures as equity contributions, therefore, loan balances are reclassified from
liabilities to equity.

     For all affiliated companies held at the end of the year, operating
results, as if GATX held 100 percent interest, were (in millions):

<Table>
<Caption>
                                                              YEAR ENDED DECEMBER 31
                                                             ------------------------
                                                              2001     2000     1999
                                                             ------   ------   ------
                                                                   (UNAUDITED)
<S>                                                          <C>      <C>      <C>
Gross income...............................................  $865.1   $717.2   $603.5
Pre-tax income.............................................    32.6    203.4    145.4
</Table>

                                        45
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     For the year ended 2001, pre-tax income as if GATX held 100 percent
interest, was less than GATX's pre-tax share of affiliates' earnings due to
losses in the Venture Finance business unit of $131.9 million. GATX's share of
these losses was $35.6 million.

     For all affiliated companies held at the end of a year, summarized balance
sheet data, as if GATX held 100 percent interest, were (in millions):

<Table>
<Caption>
                                                                  DECEMBER 31
                                                              -------------------
                                                                2001       2000
                                                              --------   --------
                                                                  (UNAUDITED)
<S>                                                           <C>        <C>
Total assets................................................  $6,461.0   $5,209.2
Long-term liabilities.......................................   3,932.1    2,164.6
Other liabilities...........................................     396.5      623.5
                                                              --------   --------
Shareholders' equity........................................  $2,132.4   $2,421.1
                                                              ========   ========
</Table>

     GATX's wholly owned subsidiary, GATX Financial Corporation, has provided a
total of $131.1 million in debt guarantees and $229.3 million in residual value
guarantees for affiliated companies.

NOTE 6.  FOREIGN OPERATIONS

     GATX has a number of investments in subsidiaries and affiliated companies
that are located in or derive revenues from foreign countries. Foreign entities
contribute significantly to share of affiliates' earnings. The foreign
identifiable assets represent investments in affiliated companies as well as
fully consolidated railcar operations in Canada, Mexico and Poland, and foreign
lease, loan and other investments.

<Table>
<Caption>
                                                          YEAR ENDED OR AT DECEMBER 31
                                                         ------------------------------
                                                           2001       2000       1999
                                                         --------   --------   --------
                                                                  IN MILLIONS
<S>                                                      <C>        <C>        <C>
REVENUES
Foreign................................................  $  267.3   $  209.3   $  164.1
United States..........................................   1,221.3    1,102.5    1,030.9
                                                         --------   --------   --------
                                                         $1,488.6   $1,311.8   $1,195.0
                                                         ========   ========   ========
SHARE OF AFFILIATES' EARNINGS
Foreign................................................  $   47.6   $   43.8   $   28.4
United States..........................................     (14.8)      34.3       35.2
                                                         --------   --------   --------
                                                         $   32.8   $   78.1   $   63.6
                                                         ========   ========   ========
IDENTIFIABLE ASSETS FOR CONTINUING OPERATIONS
Foreign................................................  $1,690.3   $1,200.3   $  943.9
United States..........................................   4,419.4    4,432.5    3,783.0
                                                         --------   --------   --------
                                                         $6,109.7   $5,632.8   $4,726.9
                                                         ========   ========   ========
</Table>

     Foreign cash flows generated are used to meet local operating needs and for
reinvestment. For foreign functional currency entities, the translation of the
financial statements into U.S. dollars results in an unrealized foreign currency
translation adjustment, a component of accumulated other comprehensive (loss)
income.

                                        46
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 7.  SHORT-TERM DEBT AND LINES OF CREDIT

     Short-term debt (in millions) and weighted average interest rates as of
year end were:

<Table>
<Caption>
                                                                  DECEMBER 31
                                                         -----------------------------
                                                          2001    2001    2000    2000
                                                         AMOUNT   RATE   AMOUNT   RATE
                                                         ------   ----   ------   ----
<S>                                                      <C>      <C>    <C>      <C>
Commercial paper.......................................  $168.5   3.05%  $345.6   7.62%
Other short-term borrowings............................   160.0   3.71%   211.6   7.86%
                                                         ------          ------
                                                         $328.5          $557.2
                                                         ======          ======
</Table>

     GFC has commitments under credit agreements with a group of financial
institutions for revolving credit loans totaling $775.0 million. While at year
end no borrowings were outstanding, availability under the credit line was
reduced by $168.5 million of commercial paper outstanding. GFC's other
short-term borrowings included $120.0 million under unsecured money market lines
at December 31, 2001.

     GFC's revolving credit agreements include a 364-day agreement for $141.7
million expiring in 2002, which GFC intends to renew, and two other agreements
for $350.0 million and $283.3 million expiring in 2003 and 2004, respectively.
The annual commitment fees are based on a percentage of the commitment and
totaled approximately $0.7 million in 2001 and $0.8 million in 2000 and 1999.

     GFC's revolving credit agreements contain various restrictive covenants and
requirements to maintain a defined minimum net worth and certain financial
ratios. GFC met all credit agreement requirements at December 31, 2001.

     Interest expense on short-term debt was $7.4 million in 2001, $31.7 million
in 2000, and $25.1 million in 1999. The portion of interest expense allocated to
discontinued operations was $0.7 million, $5.8 million and $2.2 million for
2001, 2000 and 1999 respectively.

NOTE 8.  LONG-TERM DEBT

     Long-term debt and the range of interest rates as of year end were (in
millions):

<Table>
<Caption>
                                                                         DECEMBER 31
                                                          FINAL      -------------------
                                      INTEREST RATES    MATURITY       2001       2000
                                      --------------   -----------   --------   --------
<S>                                   <C>              <C>           <C>        <C>
VARIABLE RATE
Term notes and other obligations....  2.16% - 12.76%   2002 - 2013   $  836.1   $  829.2
Nonrecourse obligations.............  2.53% -  3.48%   2002 - 2015       72.5       91.2
                                                                     --------   --------
                                                                        908.6      920.4
FIXED RATE
Term notes and other obligations....  4.12% - 10.13%   2002 - 2011    2,061.2    2,264.7
Nonrecourse obligations.............  6.53% -  8.35%   2003 - 2021      655.7      403.0
                                                                     --------   --------
                                                                      2,716.9    2,667.7
                                                                     --------   --------
                                                                     $3,625.5   $3,588.1
                                                                     ========   ========
</Table>

                                        47
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Maturities of GATX's long-term debt as of December 31, 2001, for the next
five years were (in millions):

<Table>
<Caption>
                                                       TERM NOTES
                                                       AND OTHER    NONRECOURSE   TOTAL
                                                       ----------   -----------   ------
<S>                                                    <C>          <C>           <C>
2002.................................................    $562.4       $292.1      $854.5
2003.................................................     705.4        161.1       866.5
2004.................................................     324.2        200.3       524.5
2005.................................................     278.6         28.6       307.2
2006.................................................     755.4         14.5       769.9
</Table>

     At December 31, 2001, certain technology assets, aircraft, railcars, and
other equipment with a net carrying value of $1,012.7 million were pledged as
collateral for $882.8 million of notes and obligations.

     Interest expense on long-term debt, net of capitalized interest, was $252.2
million in 2001, $253.5 million in 2000 and $191.9 million in 1999. Interest
expense capitalized as part of the cost of construction of major assets was
$14.4 million in 2001, $10.6 million in 2000 and $4.6 million in 1999. Interest
allocated to discontinued operations in 2001, 2000 and 1999 was $5.0 million,
$51.2 million and $49.5 million, respectively.

NOTE 9.  FAIR VALUE OF FINANCIAL INSTRUMENTS

     GATX Corporation and its subsidiaries may enter into authorized derivative
transactions for the purpose of reducing earnings volatility, hedging specific
economic exposures, including adverse movements in foreign currency exchange
rates, and changing interest rate characteristics of debt securities. These
instruments are entered into for hedging purposes only. GATX does not hold or
issue derivative financial instruments for purposes other than hedging, except
for warrants, which are not designated as accounting hedges under SFAS No. 133,
as amended.

 FAIR VALUE HEDGES

     GATX uses interest rate swaps to convert fixed rate debt to floating rate
debt and to manage the fixed to floating rate mix of the debt portfolio. The
fair value of interest rate swap agreements is determined based on the
differences between the contractual rate of interest and the rates currently
quoted for agreements of similar terms and maturities. As of December 31, 2001,
maturities for interest rate swaps designated as fair value hedges range from
2002-2011.

 CASH FLOW HEDGES

     GATX's interest expense is affected by changes in interest rates as a
result of its use of variable rate debt instruments, including commercial paper
and other floating rate debt. GATX uses interest rate swaps and forward starting
interest rate swaps to convert floating rate debt to fixed rate debt and to
manage the floating to fixed rate ratio of the debt portfolio. The fair value of
interest rate swap agreements is determined based on the differences between the
contractual rate of interest and the rates currently quoted for agreements of
similar terms and maturities. As of December 31, 2001, maturities for interest
rate swaps qualifying as cash flow hedges range from 2002-2011.

     GATX enters into currency swaps, currency and interest rate forwards, and
Treasury derivatives as hedges to manage its exposure to interest rate and
currency exchange rate risk on existing and anticipated transactions. The fair
values of currency swaps, currency and interest rate forwards, and Treasury
derivatives are based on interest rate swap rates, LIBOR futures, currency
rates, and current forward foreign exchange rates. As of December 31, 2001,
maturities for the previously mentioned hedges range from 2002-2011.

     As of December 31, 2001, GATX expects to reclassify $0.5 million of net
losses on derivative instruments from accumulated other comprehensive income to
earnings within the next twelve months due to hedging a secured rail car
financing.

                                        48
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

 HEDGE OF NET INVESTMENT IN FOREIGN OPERATIONS

     GATX has also entered into a foreign exchange forward contract to hedge
foreign currency exposure of an investment with operations located in Germany.
The fair value of the foreign exchange forward is determined by the current
forward foreign exchange rate. As of December 31, 2001, the net gain, included
in unrealized loss on derivatives, that related to the foreign exchange forward
contract was $8.9 million. The foreign exchange forward contract matures in
2002.

 OTHER DERIVATIVES

     GATX frequently obtains warrants from non-public, venture backed companies
in connection with its financing activities. Upon adoption of SFAS No. 133, as
amended, these warrants are accounted for as derivatives. Upon receipt, fair
value is generally not ascertainable due to the early-stage nature of the
investee companies. Accordingly, assigned values are nominal. Prior to an
initial public offering (IPO) of these companies, the fair value of pre-IPO
warrants is deemed to be zero. Accordingly, no amounts were recognized in
earnings for changes in fair value of pre-IPO warrants. The fair value of
warrants subsequent to the IPO is based on currently quoted prices of the
underlying stock.

 OTHER FINANCIAL INSTRUMENTS

     The fair value of other financial instruments represents the amount at
which the instrument could be exchanged in a current transaction between willing
parties. The following methods and assumptions were used to estimate the fair
value of other financial instruments:

     The carrying amount of cash and cash equivalents, rent receivables,
accounts payable, and short-term debt approximates fair value because of the
short maturity of those instruments. Also, the carrying amount of variable rate
secured loans approximates fair value.

     The fair value of fixed rate secured loans was estimated using discounted
cash flow analyses, at interest rates currently offered for loans with similar
terms to borrowers of similar credit quality.

     The fair value of variable and fixed rate long-term debt was estimated by
performing a discounted cash flow calculation using the term and market interest
rate for each note based on GATX's current incremental borrowing rates for
similar borrowing arrangements. Portions of variable rate long-term debt have
effectively been converted to fixed rate debt by utilizing interest rate swaps
(GATX pays fixed rate interest, receives floating rate interest). Portions of
fixed rate long-term debt have effectively been converted to floating rate debt
by utilizing interest rate swaps (GATX pays floating rate interest, receives
fixed rate interest). In such instances, the increase (decrease) in the fair
value of the variable or fixed rate long-term debt would be offset in part by
the increase (decrease) in the fair value of the interest rate swap.

                                        49
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The following table sets forth the carrying amounts and fair values of
GATX's financial instruments (in millions):

<Table>
<Caption>
                                                              DECEMBER 31
                                               -----------------------------------------
                                                 2001       2001       2000       2000
                                               CARRYING     FAIR     CARRYING     FAIR
                                                AMOUNT     VALUE      AMOUNT     VALUE
                                               --------   --------   --------   --------
<S>                                            <C>        <C>        <C>        <C>
ASSETS
Secured loans -- fixed.......................  $  526.1   $  514.8   $  527.4   $  571.9
Derivative instruments.......................      50.0       50.0         --       35.1
                                               --------   --------   --------   --------
                                               $  576.1   $  564.8   $  527.4   $  607.0
                                               ========   ========   ========   ========
LIABILITIES
Long-term debt -- fixed......................  $2,716.9   $2,539.4   $2,667.7   $2,610.4
Long-term debt -- variable...................     908.6      859.7      920.4      920.4
Derivative instruments.......................      18.6       18.6         --        7.2
                                               --------   --------   --------   --------
                                               $3,644.1   $3,417.7   $3,588.1   $3,538.0
                                               ========   ========   ========   ========
</Table>

     In the event that a counterparty fails to meet the terms of the interest
rate swap agreement or a foreign exchange contract, GATX's exposure is limited
to the interest rate or currency differential. GATX manages the credit risk of
counterparties by dealing only with institutions that the Company considers
financially sound and by avoiding concentrations of risk with a single
counterparty. GATX considers the risk of non-performance to be remote.

NOTE 10.  FINANCIAL INSTRUMENTS WITH OFF BALANCE SHEET RISK

     Prior to January 1, 2001 and the adoption of SFAS No. 133, as amended, GATX
utilized off balance sheet financial instruments in the normal course of
business to manage financial market risk, including interest rate and foreign
exchange risk.

     At December 31, 2000, GATX had the following off balance sheet financial
instruments (in millions):

<Table>
<Caption>
                       NOTIONAL
                        AMOUNT      PAY RATE/INDEX     RECEIVE RATE/INDEX     MATURITY
                       --------   ------------------   -------------------   -----------
<S>                    <C>        <C>                  <C>                   <C>
INTEREST RATE SWAPS
GATX pays fixed,
  receives
  floating...........   $384.3         4.93% - 7.54%   LIBOR - LIBOR+1.57%   2001 - 2011
GATX pays floating,
  receives fixed.....    285.0    LIBOR - LIBOR+.75%         5.90% - 7.20%   2001 - 2006
</Table>

<Table>
<Caption>
                                                      RECEIVE   DELIVER      MATURITY
                                                      -------   -------     -----------
<S>                                                   <C>       <C>         <C>
CURRENCY SWAPS AND FORWARDS
Canadian dollar swaps...............................  $137.8    C$188.9     2001 - 2013
Euro forward........................................  $ 28.7      E24.5            2011
Deutsche mark forwards..............................  $ 46.8       84.3DM          2002
</Table>

                                        50
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Following is a summary of GATX's interest rate hedge activity as of
December 31, 2000 (in millions):

<Table>
<Caption>
                                                              PAY FIXED   PAY FLOATING
                                                              ---------   ------------
<S>                                                           <C>         <C>
INTEREST RATE SWAPS
Balance at January 1, 1999..................................   $ 772.8       $702.0
Additions...................................................      85.3           --
Maturities..................................................    (262.9)       (10.0)
                                                               -------       ------
Balance at December 31, 1999................................     595.2        692.0
Additions...................................................     206.7        150.0
Maturities..................................................    (417.6)      (557.0)
                                                               -------       ------
Balance at December 31, 2000................................   $ 384.3       $285.0
                                                               =======       ======
</Table>

     GATX uses interest rate swaps and forward starting interest rate swaps to
convert floating rate debt to fixed rate debt and to manage the floating/fixed
rate mix of the debt portfolio. GATX also uses forward starting interest rate
swaps and treasury derivatives to manage interest rate risk associated with the
anticipated issuance of debt.

     Historically, GATX had a program that utilized interest rate swaps to match
the cash flow characteristics of its debt portfolio and its railcar leases. The
interest rate swaps effectively converted GATX's long-term fixed rate debt to
debt with maturities of three months to five years, matching the terms of the
railcar leases. During 2000, GATX terminated this program and implemented a new
program that utilizes interest rate swaps to achieve a target level of floating
interest rate exposure in its debt portfolio to reduce income volatility over
the long term. GATX uses interest rate swaps in addition to commercial paper and
floating rate medium-term notes to match fund its floating rate lease and loan
portfolio with floating rate borrowings.

     The net amount payable or receivable from the interest rate swap agreements
is accrued as an adjustment to interest expense. The fair value of interest rate
swap agreements is determined based on the differences between the contractual
rate of interest and the rates currently quoted for agreements of similar terms
and maturities. The fair value of the interest rate swaps was $1.0 million at
December 31, 2000.

     As of December 31, 2000, GATX had entered into currency swaps and forwards
to hedge $137.8 million of debt obligations of its Canadian subsidiaries, $46.8
million in debt obligations associated with a German joint venture and $28.7
million in future euro receipts for a leveraged lease transaction. The fair
value of the aggregate of currency swap and forward agreements was $26.9 million
at December 31, 2000.

NOTE 11.  PENSION AND OTHER POST-RETIREMENT BENEFITS

     GATX maintains noncontributory defined benefit pension plans covering its
employees and the employees of certain of its subsidiaries. Benefits payable
under the pension plans are based on years of service and/or final average
salary. The funding policy for the pension plans is based on an actuarially
determined cost method allowable under Internal Revenue Service regulations.

     In addition to the pension plans, GATX's other post-retirement plans
provide health care, life insurance and other benefits for certain retired
employees who meet established criteria. Most domestic employees are eligible
for health care and life insurance benefits if they retire from GATX with
immediate benefits under the GATX pension plan. The plans are either
contributory or noncontributory, depending on various factors.

                                        51
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The following tables set forth pension obligations and plan assets as of
December 31 and other post-retirement obligations as of December 31 (in
millions):

<Table>
<Caption>
                                                                                    2001       2000
                                                              2001       2000     RETIREE    RETIREE
                                                            PENSION    PENSION     HEALTH     HEALTH
                                                            BENEFITS   BENEFITS   AND LIFE   AND LIFE
                                                            --------   --------   --------   --------
<S>                                                         <C>        <C>        <C>        <C>
CHANGE IN BENEFIT OBLIGATION
Benefit obligation at beginning of period.................   $312.3     $312.2     $ 63.4     $ 68.7
Service cost..............................................      5.7        8.3         .4         .7
Interest cost.............................................     22.1       21.8        4.6        4.5
Plan amendments...........................................       .5         .7         --         --
Actuarial loss (gain).....................................      1.5       (8.7)      12.0       (4.5)
Benefits paid.............................................    (38.0)     (22.0)      (6.8)      (6.0)
                                                             ------     ------     ------     ------
Ongoing benefit obligation................................    304.1      312.3       73.6       63.4
                                                             ------     ------     ------     ------
Curtailments..............................................    (14.7)        --       (1.2)        --
Special termination benefits..............................     12.4         --         .2         --
                                                             ------     ------     ------     ------
Benefit obligation at end of period.......................   $301.8     $312.3     $ 72.6     $ 63.4
                                                             ======     ======     ======     ======
CHANGE IN FAIR VALUE OF PLAN ASSETS
Plan assets at beginning of period........................   $324.5     $353.5     $   --     $   --
Actual return on plan assets..............................    (15.1)      (7.5)        --         --
Company contributions.....................................      1.2         .5        6.8        6.0
Benefits paid.............................................    (38.0)     (22.0)      (6.8)      (6.0)
                                                             ------     ------     ------     ------
Plan assets at end of period..............................   $272.6     $324.5     $   --     $   --
                                                             ======     ======     ======     ======
FUNDED STATUS
Funded status of the plan.................................   $(29.2)    $ 12.2     $(72.6)    $(63.4)
Unrecognized net loss (gain)..............................     20.3      (22.3)       3.7      (11.7)
Unrecognized prior service cost...........................      2.0        2.0         --         --
Unrecognized net transition (asset) obligation............      (.1)       (.1)        .3         .4
                                                             ------     ------     ------     ------
Accrued cost..............................................   $ (7.0)    $ (8.2)    $(68.6)    $(74.7)
                                                             ======     ======     ======     ======
AMOUNT RECOGNIZED
Prepaid benefit cost......................................   $  1.4     $  1.4     $   --     $   --
Accrued benefit liability.................................     (8.7)     (10.3)     (68.9)     (75.1)
Intangible asset..........................................       .3         .7         .3         .4
                                                             ------     ------     ------     ------
Total recognized..........................................   $ (7.0)    $ (8.2)    $(68.6)    $(74.7)
                                                             ======     ======     ======     ======
</Table>

                                        52
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     The components of pension and other post-retirement benefit costs are as
follows (in millions):

<Table>
<Caption>
                                                                              2001       2000       1999
                                             2001       2000       1999     RETIREE    RETIREE    RETIREE
                                           PENSION    PENSION    PENSION     HEALTH     HEALTH     HEALTH
                                           BENEFITS   BENEFITS   BENEFITS   AND LIFE   AND LIFE   AND LIFE
                                           --------   --------   --------   --------   --------   --------
<S>                                        <C>        <C>        <C>        <C>        <C>        <C>
Service cost.............................   $  5.7     $  8.3     $  7.4     $  .4       $ .7       $ .7
Interest cost............................     22.1       21.8       20.6       4.6        4.5        4.6
Expected return on plan assets...........    (26.7)     (26.1)     (23.9)       --         --         --
Amortization of:
  Unrecognized prior service cost........       .3         .4         .4        --         --         --
  Unrecognized net loss (gain)...........       .2         .3         .2       (.6)       (.5)       (.4)
  Unrecognized net asset (obligation)....       --         --        (.1)       .1         --         .1
                                            ------     ------     ------     -----       ----       ----
Ongoing net costs........................      1.6        4.7        4.6       4.5        4.7        5.0
                                            ------     ------     ------     -----       ----       ----
Recognized gain due to curtailment.......    (14.0)        --         --      (1.1)        --         --
Recognized special termination benefits
  expense................................     12.4         --         --        .2         --         --
                                            ------     ------     ------     -----       ----       ----
Net costs................................   $   --     $  4.7     $  4.6     $ 3.6       $4.7       $5.0
                                            ======     ======     ======     =====       ====       ====
</Table>

     A special termination benefit expense of $12.6 million was incurred in 2001
for certain extra benefits paid to terminated or retired employees. Offsetting
this expense was a $15.1 million curtailment credit resulting from the
elimination of future service cost for covered employee groups.

     Of the total special termination benefits incurred in 2001, $8.9 million
related to discontinued operations. The portion of the curtailment credit
related to discontinued operations was $14.5 million in 2001. Pension costs
include a credit of $0.1 million and expense of $1.2 million and $1.4 million
related to discontinued operations for the years ended December 31, 2001, 2000
and 1999, respectively.

     GATX amortizes the prior service cost using a straight-line method over the
average remaining service period of employees expected to receive benefits under
the plan.

     Assumptions as of December 31:

<Table>
<Caption>
                                                                            2001       2000
                                                      2001       2000     RETIREE    RETIREE
                                                    PENSION    PENSION     HEALTH     HEALTH
                                                    BENEFITS   BENEFITS   AND LIFE   AND LIFE
                                                    --------   --------   --------   --------
<S>                                                 <C>        <C>        <C>        <C>
Discount rate.....................................    7.50%      7.50%     7.50%      7.50%
Expected return on plan assets....................    8.75%      8.75%      N/A        N/A
Rate of compensation increases....................    5.00%      5.00%     5.00%      5.00%
</Table>

     The health care cost trend rate has a significant effect on the other
post-retirement benefit cost and obligation. For 2001, the assumed health care
cost trend rate was 5.0% for participants over the age of 65 and 6.0% for
participants under the age of 65. Due to increasing health care and drug costs,
the assumed health care cost trend rate anticipated for 2002 will be 12.0% for
participants over the age of 65 and 10.0% for participants under the age of 65.
The assumed health care cost trend rates are projected to decline gradually over
a seven-year period to 6.0% and remain at that level thereafter. A 1% increase
in the trend rate would increase the cost by $0.3 million and the obligation by
$3.9 million. A 1% decrease in the trend rate would decrease the cost by $0.3
million and the obligation by $3.7 million.

     In addition to its defined benefit plans, GATX maintains two 401(k)
retirement plans that are available to substantially all salaried and certain
other employee groups. GATX may contribute to the plans as specified by their
respective terms, and as determined by the Board of Directors. Contributions to
such plans for

                                        53
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

continuing operations were $2.0 million, $1.8 million, and $1.6 million for
2001, 2000, and 1999, respectively. Contributions related to discontinued
operations were $0.2 million, $0.9 million, and $2.7 million for 2001, 2000, and
1999, respectively.

NOTE 12.  INCOME TAXES

     Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.

     Significant components of GATX's deferred tax liabilities and assets for
continuing operations were (in millions):

<Table>
<Caption>
                                                                DECEMBER 31
                                                              ---------------
                                                               2001     2000
                                                              ------   ------
<S>                                                           <C>      <C>
DEFERRED TAX LIABILITIES
Book/tax basis difference due to depreciation...............  $230.1   $197.5
Leveraged leases............................................    95.1     80.6
Investment in affiliated companies..........................    96.3     67.9
Lease accounting (other than leveraged).....................   114.0    192.3
Other.......................................................    82.1     67.2
                                                              ------   ------
Total deferred tax liabilities..............................  $617.6   $605.5

DEFERRED TAX ASSETS
Alternative minimum tax credit..............................      --     18.9
Accruals not currently deductible for tax purposes..........    53.0     82.9
Allowance for possible losses...............................    36.5     37.0
Post-retirement benefits other than pensions................    23.7     21.6
Other.......................................................    39.9     34.3
                                                              ------   ------
Total deferred tax assets...................................   153.1    194.7
                                                              ------   ------
Net deferred tax liabilities................................  $464.5   $410.8
                                                              ======   ======
</Table>

     At December 31, 2001, GATX had utilized all of its alternative minimum tax
credit.

                                        54
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     GATX and its United States subsidiaries file a consolidated federal income
tax return. Income taxes for continuing operations consisted of (in millions):

<Table>
<Caption>
                                                              YEAR ENDED DECEMBER 31
                                                             ------------------------
                                                              2001      2000    1999
                                                             -------   ------   -----
<S>                                                          <C>       <C>      <C>
CURRENT
Domestic:
  Federal..................................................  $(149.7)  $(18.5)  $14.4
  State and local..........................................      4.5      3.1     4.0
                                                             -------   ------   -----
                                                              (145.2)   (15.4)   18.4
Foreign....................................................     16.4     11.3    11.4
                                                             -------   ------   -----
                                                              (128.8)    (4.1)   29.8
DEFERRED
Domestic:
  Federal..................................................    145.2     24.5    44.6
  State and local..........................................     (7.2)    (2.4)    5.7
                                                             -------   ------   -----
                                                               138.0     22.1    50.3
Foreign....................................................    (11.1)     4.7     2.7
                                                             -------   ------   -----
                                                               126.9     26.8    53.0
                                                             -------   ------   -----
Income tax expense.........................................  $  (1.9)  $ 22.7   $82.8
                                                             =======   ======   =====
Income taxes (refunded) paid...............................  $(132.2)  $(18.3)  $28.7
                                                             =======   ======   =====
</Table>

     The reasons for the difference between GATX's effective income tax rate and
the federal statutory income tax rate were (in millions):

<Table>
<Caption>
                                                              YEAR ENDED DECEMBER 31
                                                             ------------------------
                                                              2001     2000     1999
                                                             ------    -----    -----
<S>                                                          <C>       <C>      <C>
Income taxes at federal statutory rate.....................  $  2.0    $18.7    $73.2
Adjust for effect of:
  Tax rate decrease on deferred taxes......................    (6.1)      --       --
  State income taxes.......................................    (1.7)      .7      6.3
  Corporate owned life insurance...........................    (1.6)     (.9)    (1.6)
  Tax audit reserve........................................     4.3      1.1      1.0
  Foreign income...........................................      .3      2.4      3.2
  Other....................................................      .9       .7       .7
                                                             ------    -----    -----
Income tax expense.........................................  $ (1.9)   $22.7    $82.8
                                                             ======    =====    =====
Effective income tax rate..................................   (34.1)%   42.4%    39.6%
                                                             ======    =====    =====
</Table>

NOTE 13.  SHAREHOLDERS' EQUITY

     In accordance with GATX's amended certificate of incorporation, 120 million
shares of common stock are authorized, at a par value of $.625 per share. As of
December 31, 2001, 56,735,385 shares were issued and 48,756,223 shares were
outstanding.

     GATX's certificate of incorporation also authorizes 5 million shares of
preferred stock at a par value of $1.00 per share. At December 31, 2001, 23,411
shares of preferred stock were outstanding. Shares of preferred

                                        55
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

stock issued and outstanding consist of Series A and B $2.50 cumulative
convertible preferred stock, which entitle holders to a cumulative annual cash
dividend of $2.50 per share. Each share of such preferred stock may be called
for redemption by GATX at $63 per share, has a liquidating value of $60 per
share, and may be converted into five shares of common stock.

     Holders of both series of $2.50 convertible preferred stock and common
stock are entitled to one vote for each share held. Except in certain instances,
all such classes vote together as a single class.

     A total of 8,547,874 shares of common stock were reserved at December 31,
2001, for the following:

<Table>
<Caption>
                                                               SHARES
                                                              ---------
<S>                                                           <C>
Conversion of outstanding preferred stock...................    114,598
Incentive compensation programs.............................  4,868,800
Employee service awards.....................................     36,250
Employee stock purchase plan................................  3,528,226
                                                              ---------
                                                              8,547,874
                                                              =========
</Table>

     In February 2002, GATX completed a private offering of $175.0 million of
five-year, 7.50% senior unsecured convertible notes. The notes are convertible
into GATX Corporation common stock at a price of $34.09 per share. Subsequent to
December 31, 2001, 5,133,471 shares were reserved for conversion of the
convertible notes.

     To ensure the fair value to all shareholders in the event of an unsolicited
takeover offer for the Company, GATX adopted a Shareholders' Rights Plan in
August 1998. Shareholders received a distribution of one right for each share of
the Company's common stock held. Initially the rights are represented by GATX's
common stock certificates and are not exercisable. The rights will be
exercisable only if a person acquires or announces a tender offer that would
result in beneficial ownership of 20 percent or more of the Company's common
stock. If a person acquires beneficial ownership of 20 percent or more of the
Company's common stock, all holders of rights other than the acquiring person
will be entitled to purchase the Company's common stock at half price. The
rights are scheduled to expire on August 14, 2008.

NOTE 14.  INCENTIVE COMPENSATION PLANS

     The GATX Corporation 1995 Long Term Incentive Compensation Plan (the 1995
Plan) contains provisions for the granting of nonqualified stock options,
incentive stock options, stock appreciation rights (SARs), cash and common stock
individual performance units (IPUs), restricted stock rights, restricted common
stock, performance awards and exchange stock options. An aggregate of 5,000,000
shares of common stock may be issued under the 1995 Plan. As of December 31,
2001, 1,304,994 shares were available for issuance under the 1995 Plan.

     Nonqualified stock options and incentive stock options may be granted for
the purchase of common stock for periods not longer than ten years from the date
of grant. The exercise price will not be less than the higher of market value at
date of grant or par value of the common stock. Except for options issued under
the Exchange Stock Option Program (see below), all options become exercisable
commencing on a date no earlier than one year from the date of grant.

     IPUs may be granted to key employees and, if predetermined performance
goals are met, will be redeemed in cash and common stock, as applicable, with
the redemption value determined in part by the fair market value of the common
stock as of the date of redemption and in part by the extent to which pre-
established performance goals have been achieved. A total of 28,744 IPUs were
granted during 2001 and 94,831 IPUs in total were outstanding at the end of the
year. In 2001, 17,040 shares of common stock and $1.5 million in cash were paid
to the participants in redemption of previously issued IPUs.

                                        56
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Restricted stock rights may be granted to key employees entitling them to
receive a specified number of shares of restricted common stock. The recipients
of restricted common stock are entitled to all dividends and voting rights, but
the shares are not transferable prior to the expiration of a "restriction
period" as determined at the discretion of the Compensation Committee of the
Board of Directors. Performance Awards are granted to employees who have been
granted restricted stock rights or restricted common stock, but these Awards may
not exceed the market value of the restricted common stock when restrictions
lapse. The Performance Awards provide cash payments if certain criteria and
earnings goals are met over a predetermined period. During 2001, one grant
totaling 515 shares of restricted stock was made.

     The Exchange Stock Option Program became part of the 1995 Plan in 1999 and
allows key employees to make an irrevocable election to exchange up to 25% of
their pensionable incentive payments for stock options, with a minimum
contribution of $5,000 in any calendar year. The purchase price of the options
is based on a percentage of the Black-Scholes value of stock options of GATX
common stock as specified by the Compensation Committee. Exchange Stock Options
are granted in January and are exercisable immediately following grant thereof.
All Exchange Stock Options will terminate on the tenth anniversary of the date
of grant. The exercise price of the options is the fair market value of the
common stock on the grant date. In January 2001, 70,275 options were granted for
the 2000 plan year. No options were granted for the 2001 plan year.

     Under the GATX Employee Stock Purchase Plan, which became effective July 1,
1999, GATX is authorized to issue up to 247,167 shares of common stock to
eligible employees during the calendar year. Such employees may have up to
$10,000 of earnings withheld to purchase GATX common stock. The purchase price
of the stock on the date of exercise is 85% of the lesser of its market price at
the beginning or end of the plan year. In accordance with the plan, GATX sold
53,553 shares to employees in 2001.

                                        57
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Stock options are outstanding under the GATX Corporation 1985 Long Term
Incentive Compensation Plan (the 1985 Plan), as amended, but no additional
options, stock or awards may be issued thereunder. Data with respect to both the
1985 Plan and the 1995 Plan, including the range of exercise prices per share
for 2001 and 2000, are set forth below:

                   NUMBER OF SHARES UNDER STOCK OPTION PLANS

<Table>
<Caption>
                                                                                     PRICE
                                                           2001        2000        PER SHARE
                                                         ---------   ---------   --------------
<S>                                                      <C>         <C>         <C>
Outstanding at January 1...............................  3,458,042   3,651,100   $12.75 - 39.75
Granted................................................    659,956     881,871    31.25 - 45.06
Exercised..............................................   (559,225)   (811,903)   12.75 - 39.72
Canceled...............................................   (222,990)   (263,026)   23.78 - 39.72
                                                         ---------   ---------   --------------
Outstanding at December 31.............................  3,335,783   3,458,042   $12.75 - 45.06
                                                         ---------   ---------   --------------
Outstanding at December 31, by year granted:
  1991.................................................         --      49,000   $   -- - 14.00
  1992.................................................     56,700      98,200       -- - 12.75
  1993.................................................     91,000     141,500       -- - 18.84
  1994.................................................    194,150     224,900       -- - 20.91
  1995.................................................    226,876     270,576    23.78 - 25.28
  1996.................................................    352,150     480,763    23.16 - 24.91
  1997.................................................    349,920     427,970    27.44 - 33.47
  1998.................................................    369,338     434,262    33.38 - 39.72
  1999.................................................    401,572     500,100    30.78 - 39.75
  2000.................................................    662,871     830,771    28.69 - 36.22
  2001.................................................    631,206          --    31.25 - 45.06
                                                         ---------   ---------   --------------
Total..................................................  3,335,783   3,458,042   $12.75 - 45.06
                                                         =========   =========   ==============
Options exercisable at December 31.....................  2,442,309   2,365,356
                                                         =========   =========
Options available for future grant at December 31......  1,304,994   1,758,015
                                                         =========   =========
</Table>

     Accounting for Stock Options -- GATX has elected to follow Accounting
Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, in
accounting for its employee stock options. Under these guidelines, no
compensation expense is recognized because the exercise price of GATX's employee
stock options equals the market price of the underlying stock on the measurement
date.

     Pro forma information regarding net income and earnings per share is
required by SFAS No. 123, Accounting for Stock-Based Compensation, and has been
determined as if GATX had accounted for its employee stock options under the
fair value method. The fair value for these options was estimated at the date of
grant using a Black-Scholes option pricing model with the following assumptions
for 2001, 2000 and 1999: dividend yield of 2.9%, 2.8%, and 3.1%, respectively;
volatility factor of the expected market price of GATX's common stock of .24,
 .23, and .20, respectively; expected life of the option of five years, five
years, and six years, respectively; and weighted average risk-free interest rate
of 4.3%, 5.0%, and 6.5%, respectively.

     The Black-Scholes model, one of the most frequently referenced models to
value options, was developed for use in estimating the fair value of traded
options that have no vesting restrictions and are fully transferable. In
addition, option valuation models require the input of highly subjective
assumptions, including expected stock price volatility. Because GATX's employee
stock options have characteristics significantly different from

                                        58
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

those of traded options, and because changes in the subjective input assumptions
can materially affect the fair value estimate, in management's opinion the
existing models do not necessarily provide a reliable single measure of the fair
value of its employee stock options.

     For purposes of this pro forma disclosure, the estimated fair value of the
options is amortized to expense over the option vesting period. The resultant
pro forma net income and earnings per share were (in millions, except for
earnings per share information):

<Table>
<Caption>
                                                              YEAR ENDED DECEMBER 31,
                                                              -----------------------
                                                               2001    2000     1999
                                                              ------   -----   ------
<S>                                                           <C>      <C>     <C>
Pro forma net income........................................  $169.4   $62.3   $148.5
Pro forma earnings per share:
  Basic.....................................................  $ 3.49   $1.30   $ 3.01
  Diluted...................................................  $ 3.44   $1.28   $ 2.95
</Table>

NOTE 15.  COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS OF CREDIT RISK

     GATX's revenues are derived from a wide range of industries and companies.
Approximately 15% of total revenues are generated from the transportation of
products for the chemical industry; for similar services, 10% of revenues are
derived from the petroleum industry. In addition, approximately 18% of GATX's
assets (on and off balance sheet) consist of commercial aircraft operated by
various domestic and international airlines.

     Under its lease agreements, GATX retains legal ownership of the asset
except where such assets have been financed by sale-leasebacks. With most loan
financings, the loan is collateralized by the equipment. GATX performs credit
evaluations prior to approval of a lease or loan contract. Subsequently, the
creditworthiness of the customer and the value of the collateral are monitored
on an ongoing basis. GATX maintains an allowance for possible losses and other
reserves to provide for potential losses that could arise should customers
become unable to discharge their obligations to GATX.

     At December 31, 2001, GATX's unconditional purchase obligations consisted
primarily of scheduled aircraft acquisitions. GATX had commitments of $885.1
million for firm orders and options for 27 new aircraft to be delivered between
2002 and 2004. Additional unconditional purchase obligations include $239.3
million of specialty finance and venture finance commitments and $8.3 million of
railcar commitments. Additionally, under the terms of the DEC acquisition
agreement GATX is obligated to invest $71.9 million in DEC over the next five
years.

     GATX has various commercial commitments, such as guarantees and standby
letters of credit, that could potentially require performance in the event of
demands by third parties. Similar to GATX's on balance sheet investments, these
guarantees expose GATX to credit and market risk; accordingly, GATX evaluates
commitment and other contingent obligations using the same techniques used to
evaluate funded transactions. GATX's subsidiaries had $581.8 million of residual
value, rental or loan guarantees outstanding at December 31, 2001.

     Guarantees are commitments issued to guarantee performance of an affiliate
to a third party, generally in the form of lease and loan payment guarantees, or
to guarantee the value of an asset at the end of a lease. Lease and loan payment
guarantees generally involve guaranteeing repayment of the financing utilized to
acquire assets being leased by an affiliate to third parties, and are in lieu of
making direct equity investments in the affiliate. GATX is not aware of any
event of default which would require it to satisfy these guarantees, and expects
the affiliates to generate sufficient cash flow to satisfy their lease and loan
obligations.

     Asset residual value guarantees represent GATX's commitment to third
parties that an asset or group of assets will be worth a specified amount at the
end of a lease term. Over 50% of the asset residual value guarantees are related
to rail equipment. Revenue is earned for providing these asset value guarantees
in the form of an initial fee (which is amortized into income over the
guaranteed period) and by sharing in any

                                        59
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

proceeds received upon disposition of the assets in excess of the amount
guaranteed (which is recorded when realized). Based on known and expected market
conditions, management does not believe that the asset residual value guarantees
will result in any adverse financial impact to GATX.

     GATX and its subsidiaries are also parties to letters of credit and bonds
totaling $30.0 million and $30.5 million at December 31, 2001 and 2000,
respectively. In GATX's past experience, virtually no claims have been made
against these financial instruments. Management does not expect any material
losses to result from these off balance sheet instruments because performance is
not expected to be required, and, therefore, is of the opinion that the fair
value of these instruments is zero.

     GATX and its subsidiaries are engaged in various matters of litigation and
have a number of unresolved claims pending, including proceedings under
governmental laws and regulations related to environmental matters. While the
amounts claimed are substantial, and the ultimate liability with respect to such
litigation and claims cannot be determined at this time, it is the opinion of
management that amounts, if any, required to be paid by GATX and its
subsidiaries in the discharge of such liabilities, are not likely to be material
to GATX's consolidated financial position or results of operations.

NOTE 16.  DISCONTINUED OPERATIONS

     As of December 31, 2001, GATX has substantially completed the divestiture
of its ISG segment. The ISG segment was comprised of Terminals, Logistics, and
minor business development efforts.

     GATX sold 81% of Logistics in May 2000 and the remaining 19% in December
2000. In the first quarter of 2001, GATX sold the majority of Terminals'
domestic operations. The sale included substantially all of Terminals' domestic
terminaling operations, the Central Florida Pipeline Company and Calnev Pipe
Line Company. Also in the first quarter of 2001, GATX sold substantially all of
Terminals' European operations. In the second and third quarters of 2001,
Terminals sold its Asian operations and its interest in a distillate and
blending distribution affiliate. Additionally, in the first quarter GATX sold
various smaller supply chain businesses.

     A net after-tax gain of $163.9 million was recognized on the sales of ISG
assets in 2001. The 2001 gain on sale of portion of segment primarily reflects
the sale of substantially all of the GATX's interest in GATX Terminals
Corporation and its subsidiary companies and is net of taxes of $179.1 million.
The 2000 gain on sale of portion of segment reflects the sale of GATX Logistics,
Inc. and was $8.4 million, including a tax benefit of $5.2 million.

     GATX's financial statements have been restated to reflect the ISG segment
as a discontinued operation for all periods presented. Corporate allocations to
discontinued operations were for services provided. Operating results include
interest expense on debt that was assumed by the buyer and an allocation of the
interest expense on GATX's general credit facilities based on actual historical
financing requirements. In connection with the disposition of the ISG segment,
GATX retained $46.9 million of on-going liabilities, consisting primarily of
pension and other post-retirement obligations.

     Operating results of the discontinued ISG operation are presented below (in
millions):

<Table>
<Caption>
                                                              YEAR ENDED DECEMBER 31
                                                              -----------------------
                                                              2001     2000     1999
                                                              -----   ------   ------
<S>                                                           <C>     <C>      <C>
Gross income................................................  $35.0   $469.9   $599.4
Income, net of taxes of $3.8, $16.8, and $19.8..............    1.5     27.4     25.0
</Table>

                                        60
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

     Assets and liabilities of the discontinued operations are summarized below
(in millions):

<Table>
<Caption>
                                                                DECEMBER 31
                                                              ---------------
                                                               2001     2000
                                                              ------   ------
<S>                                                           <C>      <C>
Accounts receivable, net....................................  $  1.3   $ 41.5
Tank storage terminals, pipelines and other, net............     2.0    856.6
Investment in affiliated companies..........................      --     73.9
Other assets................................................      .5     67.5

Accounts payable and accrued expenses.......................     2.2     64.9
Long-term debt..............................................      --    147.8
Deferred items..............................................     1.6    195.9
                                                              ------   ------
Net Assets of Discontinued Operations.......................  $   --   $630.9
                                                              ======   ======
</Table>

NOTE 17.  FINANCIAL DATA OF BUSINESS SEGMENTS

     The financial data presented below conforms to SFAS No. 131, Disclosures
about Segments of an Enterprise and Related Information, and depict the
profitability, financial position and cash flow of each of GATX's continuing
business segments. Segment profitability is presented to reflect operating
results inclusive of allocated support expenses from the parent company and
interest costs based upon the debt levels shown below.

     GATX provides its services and products through two operating segments:
Financial Services and GATX Rail. Through these businesses, GATX combines asset
knowledge and services, structuring expertise, partnering and risk capital to
serve customers and partners worldwide. GATX specializes in railcar and
locomotive leasing, aircraft operating leasing, information technology leasing
and venture finance.

     The Financial Services segment consists of the following four business
units:

     - Air, which is a leading aircraft lessor, focused on leasing newer,
       narrow-body aircraft used by commercial airlines throughout the world.

     - Technology, which provides lease financing and asset management services
       related to information technology equipment, primarily to Fortune 1000
       companies.

     - Venture Finance, which provides secured loan and lease financing to
       early-stage companies.

     - Specialty Finance, which acts as an investor, arranger and manager of
       financing services involving a variety of asset types and industries,
       with an established presence in the marine business.

     In prior years, the Financial Services segment included a rail business
unit, which leased freight cars and locomotives under operating and finance
leases. In 2001, GATX combined the rail business unit of Financial Services with
GATX Rail, a full service lessor of specialized railcars, primarily tank cars
into one rail segment. The financial data for GATX Rail and Financial Services
has been restated for all periods presented to reflect the change in the
composition of each operating segment.

                                        61
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<Table>
<Caption>
                                                                     CORPORATE
                                              FINANCIAL     GATX        AND      INTER-
                                              SERVICES      RAIL       OTHER     SEGMENT    TOTAL
                                              ---------   --------   ---------   -------   --------
                                                                   IN MILLIONS
<S>                                           <C>         <C>        <C>         <C>       <C>
2001
PROFITABILITY
Revenues....................................  $  817.1    $  668.7    $  3.0     $  (.2)   $1,488.6
Share of affiliates' earnings...............      25.4         7.4        --         --        32.8
                                              --------    --------    ------     ------    --------
Gross income................................     842.5       676.1       3.0        (.2)    1,521.4
Depreciation and amortization...............    (295.8)     (117.8)     (1.5)       (.8)     (415.9)
Interest expense............................    (182.8)      (66.3)      (.8)        --      (249.9)
(Loss) income from continuing operations
  before taxes..............................     (32.8)       62.0     (23.6)        --         5.6
(Loss) income from continuing operations....     (18.9)       44.1     (17.7)        --         7.5
                                              --------    --------    ------     ------    --------
FINANCIAL POSITION
Debt........................................   2,856.7     1,185.7     131.5      (56.9)    4,117.0
Equity......................................     409.8       504.2     (32.4)        .2       881.8
Investments in affiliated companies.........     752.4       200.6        --         --       953.0
Identifiable assets.........................   3,701.6     2,280.9     183.9      (56.7)    6,109.7
                                              --------    --------    ------     ------    --------
ITEMS AFFECTING CASH FLOW
Net cash provided by continuing
  operations................................     149.6       126.4      60.8       18.9       355.7
Portfolio proceeds..........................     997.1        34.3        --         --     1,031.4
                                              --------    --------    ------     ------    --------
Total cash provided.........................   1,146.7       160.7      60.8       18.9     1,387.1
Portfolio investments and capital
  additions.................................   1,423.8       370.1        .3         --     1,794.2
                                              --------    --------    ------     ------    --------
2000
PROFITABILITY
Revenues....................................  $  650.8    $  655.4    $  7.3     $ (1.7)   $1,311.8
Share of affiliates' earnings...............      57.4        20.6        .1         --        78.1
                                              --------    --------    ------     ------    --------
Gross income................................     708.2       676.0       7.4       (1.7)    1,389.9
Depreciation and amortization...............    (215.5)     (115.6)     (1.6)      (1.2)     (333.9)
Interest expense............................    (160.8)      (74.6)     (7.9)        .7      (242.6)
(Loss) income from continuing operations
  before taxes..............................     (50.7)      133.2     (29.3)        .3        53.5
(Loss) income from continuing operations....     (30.4)       82.2     (21.2)        .2        30.8
                                              --------    --------    ------     ------    --------
FINANCIAL POSITION
Debt........................................   2,638.4     1,045.5     663.7      (38.1)    4,309.5
Equity......................................     272.6       454.1      62.1         .7       789.5
Investments in affiliated companies.........     761.5       205.9        .5         --       967.9
Identifiable assets.........................   3,543.6     2,091.2      35.1      (37.1)    5,632.8
                                              --------    --------    ------     ------    --------
ITEMS AFFECTING CASH FLOW
Net cash provided by (used in) continuing
  operations................................     227.3       169.3     (32.1)      33.3       397.8
Portfolio proceeds..........................     553.3        74.5        --         --       627.8
                                              --------    --------    ------     ------    --------
Total cash provided.........................     780.6       243.8     (32.1)      33.3     1,025.6
Portfolio investments and capital
  additions.................................   1,444.9       482.7        .8         --     1,928.4
                                              --------    --------    ------     ------    --------
</Table>

                                        62
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

<Table>
<Caption>
                                                                     CORPORATE
                                              FINANCIAL     GATX        AND      INTER-
                                              SERVICES      RAIL       OTHER     SEGMENT    TOTAL
                                              ---------   --------   ---------   -------   --------
                                                                   IN MILLIONS
<S>                                           <C>         <C>        <C>         <C>       <C>
1999
PROFITABILITY
Revenues....................................  $  550.9    $  645.6    $  1.9     $ (3.4)   $1,195.0
Share of affiliates' earnings...............      41.1        22.5        --         --        63.6
                                              --------    --------    ------     ------    --------
Gross income................................     592.0       668.1       1.9       (3.4)    1,258.6
Depreciation and amortization...............    (138.8)     (113.3)     (1.3)      (1.2)     (254.6)
Interest expense............................    (105.6)      (69.4)     (7.3)       2.4      (179.9)
Income (loss) from continuing operations
  before taxes..............................      86.2       147.4     (24.9)        .4       209.1
Income (loss) from continuing operations....      52.2        90.5     (16.6)        .2       126.3
                                              --------    --------    ------     ------    --------
FINANCIAL POSITION
Debt........................................   1,998.7     1,087.6     579.7       (8.8)    3,657.2
Equity......................................     277.9       406.9     150.7         .5       836.0
Investments in affiliated companies.........     566.9       208.0        .7         --       775.6
Identifiable assets.........................   2,711.5     2,062.6     (39.2)      (8.0)    4,726.9
                                              --------    --------    ------     ------    --------
ITEMS AFFECTING CASH FLOW
Net cash provided by (used in) continuing
  operations................................     135.9       152.3     (20.1)       5.0       273.1
Portfolio proceeds..........................     459.6        58.1        --         --       517.7
                                              --------    --------    ------     ------    --------
Total cash provided (used)..................     595.5       210.4     (20.1)       5.0       790.8
Portfolio investments and capital
  additions.................................   1,115.1       489.2       1.7         --     1,606.0
                                              --------    --------    ------     ------    --------
</Table>

NOTE 18.  OTHER ASSETS

     The following table summarizes the components of other assets (in
millions):

<Table>
<Caption>
                                                                DECEMBER 31
                                                              ---------------
                                                               2001     2000
                                                              ------   ------
<S>                                                           <C>      <C>
Assets held for sale........................................  $ 48.6   $  2.2
Fair value of derivatives...................................    31.4       --
Goodwill, net of accumulated amortization...................    63.3     39.9
Deferred financing costs....................................    26.1     24.8
Inventory...................................................    13.3     18.1
Available for sale securities...............................     7.3     46.1
Held to maturity securities.................................     6.6     96.1
Investments carried at cost and other investments...........    44.5     31.3
Prepaid items...............................................    24.6     28.4
Other.......................................................    84.1     87.7
                                                              ------   ------
                                                              $349.8   $374.6
                                                              ======   ======
</Table>

                                        63
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 19.  REVENUE COMPONENTS

     The following table summarizes the components of revenue (in millions):

<Table>
<Caption>
                                                             YEAR ENDED DECEMBER 31
                                                         ------------------------------
                                                           2001       2000       1999
                                                         --------   --------   --------
<S>                                                      <C>        <C>        <C>
Lease income...........................................  $1,140.1   $  987.0   $  855.8
Marine operating income................................      77.7       88.2       81.8
Interest income........................................      71.6       60.1       40.8
Asset remarketing gains, including residual sharing
  fees.................................................      99.0       57.2       75.5
Gain on sale of equity securities......................      38.7       52.3       14.7
Fees...................................................      19.5       20.1       16.4
Other income...........................................      42.0       46.9      110.0
                                                         --------   --------   --------
                                                         $1,488.6   $1,311.8   $1,195.0
                                                         ========   ========   ========
</Table>

     Other income includes railcar maintenance revenue. Additionally, other
income in 1999 includes revenue of $67.0 million from the value added technology
equipment sales and service business, which was sold in June 1999.

NOTE 20.  PORTFOLIO PROCEEDS

     The following table summarizes the components of portfolio proceeds (in
millions):

<Table>
<Caption>
                                                                YEAR ENDED DECEMBER 31
                                                              --------------------------
                                                                2001      2000     1999
                                                              --------   ------   ------
<S>                                                           <C>        <C>      <C>
Lease rents received, net of earned income and leveraged
  lease nonrecourse debt service............................  $  252.3   $151.7   $147.3
Loan principal received.....................................     216.0    160.6     88.7
Proceeds from asset remarketing.............................     318.3    178.4    220.4
Proceeds from sale of equity securities.....................      35.2     52.3     14.7
Investment recovery from investments in affiliated               209.6     84.8     46.6
  companies.................................................
                                                              --------   ------   ------
                                                              $1,031.4   $627.8   $517.7
                                                              ========   ======   ======
</Table>

NOTE 21.  REDUCTION IN WORKFORCE

     During 2001, GATX recorded a pre-tax charge of $13.4 million related to its
2001 reduction in workforce. This action was part of GATX's previously announced
initiative to reduce selling, general and administrative costs in response to
current economic conditions and the divestiture of ISG operations.

     The reduction in workforce charge included involuntary employee separation
and benefit costs for 147 employees company wide, as well as legal fees,
occupancy and other costs. The employee groups terminated included professional
and administrative staff, including corporate personnel.

     As of December 31, 2001, 143 of the employee terminations were completed.
The amount of termination benefits paid in 2001 totaled $2.4 million. Remaining
cash payments will be funded from ongoing operations and are not expected to
have a material impact on GATX's liquidity.

                                        64
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 22.  EARNINGS PER SHARE

     Basic earnings per share is computed by dividing net income by the weighted
average number of shares of common stock outstanding during each year. Shares
issued during the year and shares reacquired during the year are weighted for
the portion of the year that they were outstanding. Diluted earnings per share
is computed in a manner consistent with that of basic earnings per share except
that the weighted average shares outstanding are increased to include additional
shares from the assumed conversion of preferred stock and the assumed exercise
of stock options, if dilutive. The number of additional shares is calculated by
assuming that outstanding options were exercised and that the proceeds from such
exercises were used to acquire shares of common stock at the average market
price during the reporting period.

     The following table sets forth the computation of basic and diluted net
income per common share (in millions, except per share amounts):

<Table>
<Caption>
                                                              YEAR ENDED DECEMBER 31
                                                              -----------------------
                                                               2001    2000     1999
                                                              ------   -----   ------
<S>                                                           <C>      <C>     <C>
NUMERATOR:
  Income from continuing operations.........................  $  7.5   $30.8   $126.3
  Income from discontinued operations.......................   165.4    35.8     25.0
     Less: dividends paid and accrued on preferred stock....      .1      .1       .1
                                                              ------   -----   ------
NUMERATOR FOR BASIC EARNINGS PER SHARE -- INCOME AVAILABLE
  TO COMMON SHAREHOLDERS....................................  $172.8   $66.5   $151.2
Effect of dilutive securities:
     Add: dividends paid and accrued on preferred stock.....      .1      .1       .1
                                                              ------   -----   ------
NUMERATOR FOR DILUTED EARNINGS PER SHARE -- INCOME AVAILABLE
  TO COMMON SHAREHOLDERS....................................  $172.9   $66.6   $151.3
DENOMINATOR:
  DENOMINATOR FOR BASIC EARNINGS PER SHARE -- WEIGHTED
     AVERAGE SHARES.........................................    48.5    47.9     49.3
Effect of dilutive securities:
  Stock options.............................................      .6      .8       .9
  Convertible preferred stock...............................      .1      .1       .1
                                                              ------   -----   ------
DENOMINATOR FOR DILUTED EARNINGS PER SHARE -- ADJUSTED
  WEIGHTED AVERAGE AND ASSUMED CONVERSION...................    49.2    48.8     50.3
BASIC EARNINGS PER SHARE:
  Income from continuing operations.........................  $  .15   $ .64   $ 2.56
  Income from discontinued operations.......................    3.41     .75      .51
                                                              ------   -----   ------
TOTAL BASIC EARNINGS PER SHARE..............................  $ 3.56   $1.39   $ 3.07
                                                              ======   =====   ======
DILUTED EARNINGS PER SHARE:
  Income from continuing operations.........................  $  .15   $ .63   $ 2.51
  Income from discontinued operations.......................    3.36   $ .74      .50
                                                              ------   -----   ------
TOTAL DILUTED EARNINGS PER SHARE............................  $ 3.51   $1.37   $ 3.01
                                                              ======   =====   ======
</Table>

     The Company had approximately 1.3 million, 3.5 million and 3.7 million
stock options outstanding at December 31, 2001, 2000, and 1999, respectively,
which have been excluded from the computation of diluted earnings per share
since they were antidilutive.

                                        65
<PAGE>
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

                     CONSOLIDATED QUARTERLY FINANCIAL DATA
                                  (UNAUDITED)

<Table>
<Caption>
                                                    FIRST    SECOND     THIRD    FOURTH
                                                   QUARTER   QUARTER   QUARTER   QUARTER    TOTAL
                                                   -------   -------   -------   -------   --------
                                                          IN MILLIONS, EXCEPT PER SHARE DATA
<S>                                                <C>       <C>       <C>       <C>       <C>
2001(c)(b)
Gross income.....................................  $370.5    $437.2    $368.8    $344.9    $1,521.4
Ownership costs and operating expenses from
  continuing operations..........................   275.1     286.8     272.7     267.1     1,101.7
Income (loss) from continuing operations.........     4.4      22.5      (7.3)    (12.1)        7.5
Income (loss) from discontinued operations.......   166.3       (.9)       --        --       165.4
                                                   ------    ------    ------    ------    --------
Net income (loss)................................  $170.7    $ 21.6    $ (7.3)   $(12.1)   $  172.9
                                                   ======    ======    ======    ======    ========
PER SHARE DATA:(c)
Basic:
  Income (loss) from continuing operations.......  $   .9    $  .46    $ (.15)   $ (.25)   $    .15
  Income (loss) from discontinued operations.....    3.44       (.1)       --        --        3.41
                                                   ------    ------    ------    ------    --------
     Total.......................................  $ 3.53    $  .45    $ (.15)   $ (.25)   $   3.56
                                                   ======    ======    ======    ======    ========
Diluted:
  Income (loss) from continuing operations.......  $   .9    $  .46    $ (.15)   $ (.25)   $    .15
  Income (loss) from discontinued operations.....    3.36       (.2)       --        --        3.36
                                                   ------    ------    ------    ------    --------
     Total.......................................  $ 3.45    $  .44    $ (.15)   $ (.25)   $   3.51
                                                   ======    ======    ======    ======    ========
2000(d)
Gross income.....................................  $308.8    $342.3    $364.1    $374.7    $1,389.9
Ownership costs and operating expenses from
  continuing operations..........................   204.2     233.5     244.2     262.1       944.0
Income (loss) from continuing operations.........    37.6      32.4      37.6     (76.8)       30.8
Income from discontinued operations..............     3.0       9.1       7.5      16.2        35.8
                                                   ------    ------    ------    ------    --------
Net income (loss)................................  $ 40.6    $ 41.5    $ 45.1    $(60.6)   $   66.6
                                                   ======    ======    ======    ======    ========
PER SHARE DATA:(c)
Basic:
  Income (loss) from continuing operations.......  $  .78    $  .68    $  .79    $(1.61)   $    .64
  Income from discontinued operations............     .06       .19       .16       .34         .75
                                                   ------    ------    ------    ------    --------
     Total.......................................  $  .84    $  .87    $  .95    $(1.27)   $   1.39
                                                   ======    ======    ======    ======    ========
Diluted:
  Income (loss) from continuing operations.......  $  .76    $  .67    $  .78    $(1.60)   $    .63
  Income from discontinued operations............     .06       .19       .15       .33         .74
                                                   ------    ------    ------    ------    --------
     Total.......................................  $  .82    $  .86    $  .93    $(1.27)   $   1.37
                                                   ======    ======    ======    ======    ========
</Table>

- ---------------

(a) In the first quarter of 2001, gain on sale of portion of segment was $343.0
    million on a pre-tax basis, $163.9 million on an after-tax basis.

(b) The quarterly 2001 and 2000 share of affiliates' earnings and depreciation
    amounts have been restated to reflect the reclassification of goodwill
    amortization related to investments in affiliated companies.

(c) Quarterly earnings per share results may not be additive, as per share
    amounts are computed independently for each quarter and the full year is
    based on the respective weighted average common shares and common stock
    equivalents outstanding.

(d) In the fourth quarter of 2000, the provision for litigation was $160.5
    million on a pre-tax basis, $97.6 million on an after-tax basis.

                                        66
<PAGE>

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

     None.

                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Information required by this item regarding directors is contained in
sections entitled "Nominees For Directors" and "Additional Information
Concerning Nominees" in the GATX Proxy Statement dated March 22, 2002, which
sections are incorporated herein by reference. Information regarding officers is
included at the end of Part I.

ITEM 11.  EXECUTIVE COMPENSATION

     Information required by this item regarding executive compensation is
contained in sections entitled "Compensation of Directors" and "Compensation of
Executive Officers" in the GATX Proxy Statement dated March 22, 2002, which
sections are incorporated herein by reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Information required by this item regarding the Company's Common Stock is
contained in sections entitled "Nominees For Directors," "Security Ownership of
Management" and "Beneficial Ownership of Common Stock" in the GATX Proxy
Statement dated March 22, 2002, which sections are incorporated herein by
reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     None.

                                        67
<PAGE>

                                    PART IV

ITEM 14.  FINANCIAL STATEMENT SCHEDULES, REPORTS ON FORM 8-K AND EXHIBITS.

(a) 1.   Financial Statements

<Table>
<Caption>
                                                                      PAGE
                                                                      ----
<S>     <C>                                                           <C>
        Documents Filed as Part of this Report:
        Report of Independent Public Accountants -- Ernst & Young      31
        Consolidated Statements of Income -- Years Ended December
        31, 2001, 2000, and 1999.                                      32
        Consolidated Balance Sheets -- December 31, 2001 and 2000.     33
        Consolidated Statements of Cash Flows -- Years Ended
        December 31, 2001, 2000, and 1999.                             34
        Consolidated Statements of Changes in Shareholders'
        Equity -- December 31, 2001, 2000 and 1999.                    35
        Consolidated Statements of Comprehensive Income -- Years
        Ended December 31, 2001, 2000, and 1999.                       36
        Notes to Consolidated Financial Statements                     37
</Table>

    2.   Financial Statement Schedules:

<Table>
<S>     <C>                                                           <C>
        Schedule I Condensed Financial Information of Registrant      72
        Schedule II Valuation and Qualifying Accounts                 76
</Table>

       All other schedules for which provision is made in the applicable
       accounting regulation of the Securities and Exchange Commission are not
       required under the related instructions or are inapplicable, and,
       therefore, have been omitted.

(b)     Report on Form 8-K.

       Form 8-K filed on January 23, 2002 reporting GATX Corporation's 2001 year
       end and fourth quarter results.

       Form 8-K filed on January 28, 2002 reporting GATX Corporation's intention
       to offer $150 million of convertible senior unsecured notes. The notes
       are expected to have a 5-year maturity, and may be converted into shares
       of common stock of GATX Corporation.

       Form 8-K filed on February 1, 2002 reporting that GATX Corporation
       completed a private offering of $175 million of senior unsecured
       convertible notes issued under Rule 144A. The offering was increased from
       $150 million to $175 million as a result of the underwriters exercising
       the over-allotment option due to strong investor demand. The 5-year notes
       carry a 7.50% coupon and may be convertible into GATX Corporation common
       stock at a price of $34.09 per share, a 16% premium over the common stock
       closing price on January 28, 2002. The net proceeds of the offering will
       be used by GATX Financial Corporation, a wholly owned subsidiary of GATX
       Corporation, for repayment of indebtedness and general corporate
       purposes.

                                        68
<PAGE>

(c)       Exhibit Index

<Table>
<Caption>
  EXHIBIT
  NUMBER                        EXHIBIT DESCRIPTION                        PAGE
  -------                       -------------------                        ----
  <S>       <C>                                                            <C>
  3A.       Restated Certificate of Incorporation of GATX Corporation,
            as amended, incorporated by reference to GATX's Annual
            Report on Form 10-K for the fiscal year ended December 31,
            1991, file number 1-2328.
  3B.       By-Laws of GATX Corporation, as amended January 26, 2001,
            submitted to the SEC with the electronic submission of this
            report on Form 10-K.
  10A.      GATX Corporation 1985 Long Term Incentive Compensation Plan,
            as amended, and restated as of April 27, 1990, incorporated
            by reference to GATX's Annual Report on Form 10-K for the
            fiscal year ended December 31, 1990, file No. 1-2328.
            Amendment to said Plan effective as of April 1, 1991,
            incorporated by reference to GATX's Annual Report on Form
            10-K for the fiscal year ended December 31, 1991, file
            number 1-2328; Sixth Amendment to said Plan effective
            January 31,1997, incorporated by reference to GATX's Annual
            Report on Form 10-K for the fiscal year ended December 31,
            1999, file number 1-2328; Seventh Amendment to said Plan
            effective June 9, 2000, and Eighth Amendment of said Plan
            effective January 26, 2001, incorporated by reference to
            GATX's Annual Report on Form 10-K for the fiscal year ended
            December 31, 2000, file number 1-2328.
  10B.      GATX Corporation 1995 Long Term Incentive Compensation Plan,
            Incorporated by reference to GATX's Quarterly Report on Form
            10-Q for the quarterly period ended March 31, 1995, file
            number 1-2328. First Amendment of said Plan effective as of
            January 31, 1997 submitted to the SEC on Form 10-K for the
            fiscal year ended December 31, 1996, file number 1 2328;
            Second Amendment of said Plan effective as of December 5,
            1997 incorporated by reference to GATX's Annual Report on
            Form 10-K for the fiscal year ended December 31, 1999, file
            number 1-2328; Third Amendment of said Plan effective as of
            April 24, 1998, submitted to the SEC with the electronic
            submission of this report on Form 10-K; Fourth Amendment of
            said Plan effective June 9, 2000, and Fifth Amendment of
            said Plan effective January 26, 2001, incorporated by
            reference to GATX's Annual Report on Form 10-K for the
            fiscal year ended December 31, 2000, file number 1-2328.
  10C.      GATX Corporation Deferred Fee Plan for Directors, as amended
            and restated as of July 1, 1998, incorporated by reference
            to GATX's Annual Report on Form 10-K for the fiscal year
            ended December 31, 1999, file number 1-2328.
  10D.      1984 Executive Deferred Income Plan Participation Agreement
            between GATX Corporation and participating directors and
            executive officers dated September 1, 1984, as amended,
            incorporated by reference to GATX's Annual Report on Form
            10-K for the fiscal year ended December 31, 1991, file
            number 1-2328.
  10E.      1985 Executive Deferred Income Plan Participation Agreement
            between GATX Corporation and participating directors and
            executive officers dated July 1, 1985, as amended,
            incorporated by reference to GATX's Annual Report on Form
            10-K for the fiscal year ended December 31, 1991, file
            number 1-2328.
  10F.      1987 Executive Deferred Income Plan Participation Agreement
            between GATX Corporation and participating directors and
            executive officers dated December 31, 1986, as amended,
            incorporated by reference to GATX's Annual Report on Form
            10-K for the fiscal year ended December 31, 1991, file
            number 1-2328.
  10G.      Amendment to Executive Deferred Income Plan Participation
            Agreements between GATX and certain participating directors
            and participating executive officers entered into as of
            January 1, 1990, incorporated by reference to GATX's Annual
            Report on Form 10-K for the fiscal year ended December 31,
            1989, file number 1-2328.
</Table>

                                        69
<PAGE>

<Table>
<Caption>
  EXHIBIT
  NUMBER                        EXHIBIT DESCRIPTION                        PAGE
  -------                       -------------------                        ----
  <S>       <C>                                                            <C>
  10H.      Retirement Supplement to Executive Deferred Income Plan
            Participation Agreements entered into as of January 23,
            1990, between GATX and certain participating directors
            incorporated by reference to GATX's Annual Report on Form
            10-K for the fiscal year ended December 31, 1989, file
            number 1-2328 and between GATX and certain other
            participating directors incorporated by reference to GATX's
            Annual Report on Form 10-K for the fiscal year ended
            December 31, 1990, file number 1-2328.
  10I.      Amendment to Executive Deferred Income Plan Participation
            Agreements between GATX and participating executive officers
            entered into as of April 23, 1993, incorporated by reference
            to GATX's Annual Report on Form 10-K for the fiscal year
            ended December 31, 1993, file number 1-2328.
  10J.      Summary Directors' Deferred Stock Plan effective as of April
            26, 1996, incorporated by reference to GATX's Quarterly
            Report on Form 10-Q for the quarterly period ended September
            30, 1996, file number 1-2328.
  10K.      Agreements for Continued Employment Following Change of
            Control or Disposition of a Subsidiary between GATX
            Corporation and certain executive officers dated as of
            January 1, 2001, submitted to the SEC with the electronic
            submission of this report on Form 10-K.
  12.       Statement regarding computation of ratios of earnings to
            combined fixed charges and preferred stock dividends.          77
  21.       Subsidiaries of the Registrant.                                78
  23.       Consent of Independent Auditors.                               79
  24.       Powers of Attorney with respect to the Annual Report on Form
            10-K for the fiscal year ended December 31, 2001, file
            Number 1-2328, submitted to the SEC along with the
            electronic submission of this Report on Form 10-K.
  99A.      Undertakings to the GATX Corporation Salaried Employees
            Retirement Savings Plan, incorporated by reference to GATX's
            Annual Report on Form 10-K for the fiscal year ended
            December 31, 1982, file number 1-2328.
  99B.      Undertakings to the GATX Corporation 1995 Long Term
            Incentive Plan for the fiscal year ended December 31, 1995,
            file number 1-2328, Incorporated by reference to GATX's
            Annual Report on Form 10-K for the year ended December 31,
            1995.
</Table>

                                        70
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                                     GATX CORPORATION
                                                       (Registrant)

                                                  /s/ RONALD H. ZECH
                                          --------------------------------------
                                                      Ronald H. Zech
                                                 Chairman, President and
                                                 Chief Executive Officer
                                                      March 22, 2002

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.

<Table>
<S>     <C>                                                <C>                            <C>

                   /s/ RONALD H. ZECH                        Chairman, President and
 ------------------------------------------------------      Chief Executive Officer
                     Ronald H. Zech
                     March 22, 2002


                  /s/ BRIAN A. KENNEY                        Vice President and Chief
 ------------------------------------------------------         Financial Officer
                    Brian A. Kenney
                     March 22, 2002


                 /s/ WILLIAM M. MUCKIAN                     Vice President, Controller
 ------------------------------------------------------    and Chief Accounting Officer
                   William M. Muckian
                     March 22, 2002


                    Rod F. Dammeyer                                  Director
                     James M. Denny                                  Director
                   Richard Fairbanks                                 Director
                    William C. Foote                                 Director
                    Deborah M. Fretz                                 Director
                     Miles L. Marsh                                  Director
                   Michael E. Murphy                                 Director
                  John W. Rogers, Jr.                                Director


  By                 /s/ RONALD J. CIANCIO
        ------------------------------------------------
                       Ronald J. Ciancio
                       (Attorney in Fact)
                         March 22, 2002
</Table>

                                        71
<PAGE>

          SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                                GATX CORPORATION
                                (PARENT COMPANY)

                              STATEMENTS OF INCOME

<Table>
<Caption>
                                                               YEAR ENDED DECEMBER 31
                                                              ------------------------
                                                               2001     2000     1999
                                                              ------   ------   ------
                                                                    IN MILLIONS
<S>                                                           <C>      <C>      <C>
GROSS INCOME................................................  $  2.9   $  6.2   $  1.9

COST AND EXPENSES
Depreciation and amortization...............................     1.5      1.6      1.4
Interest....................................................    29.5     29.1     28.2
Selling, general and administrative.........................    23.5     23.3     17.6
                                                              ------   ------   ------
TOTAL COSTS AND EXPENSES....................................    54.5     54.0     47.2

LOSS BEFORE INCOME TAXES AND SHARE OF NET INCOME OF
  CONTINUING OPERATIONS.....................................   (51.6)   (47.8)   (45.3)
INCOME TAX BENEFIT..........................................   (15.8)   (14.8)   (15.4)
                                                              ------   ------   ------

LOSS BEFORE SHARE OF NET INCOME FROM CONTINUING
  SUBSIDIARIES..............................................   (35.8)   (33.0)   (29.9)
SHARE OF NET INCOME FROM CONTINUING SUBSIDIARIES............    43.3     63.8    156.2
                                                              ------   ------   ------
INCOME FROM CONTINUING OPERATIONS...........................     7.5     30.8    126.3

SHARE OF NET INCOME FROM DISCONTINUED OPERATIONS
Operating results, net of taxes.............................     1.5     27.4     25.0
Gain on sale of portion of segment, net of taxes............   163.9      8.4       --
                                                              ------   ------   ------
TOTAL DISCONTINUED OPERATIONS...............................   165.4     35.8     25.0
                                                              ------   ------   ------
NET INCOME..................................................  $172.9   $ 66.6   $151.3
                                                              ======   ======   ======
</Table>

- ---------------
NOTE: Certain amounts in the 2000 and 1999 financial statements have been
      reclassified to conform to the 2001 presentation.

                                        72
<PAGE>

          SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                                GATX CORPORATION
                                (PARENT COMPANY)

                                 BALANCE SHEETS

<Table>
<Caption>
                                                                  DECEMBER 31
                                                              -------------------
                                                                2001       2000
                                                              --------   --------
                                                                  IN MILLIONS
<S>                                                           <C>        <C>
ASSETS
CASH AND CASH EQUIVALENTS...................................  $     .1   $    (.8)
RECEIVABLES.................................................        --       17.0
PROPERTY AND EQUIPMENT......................................      13.6       13.7
Less:  allowance for depreciation...........................     (10.5)      (7.9)
                                                              --------   --------
                                                                   3.1        5.8
OTHER ASSETS................................................      15.9       31.6
INVESTMENT IN CONTINUING OPERATIONS.........................   1,445.8      676.7
NET ASSETS OF DISCONTINUED OPERATIONS.......................        --      630.9
                                                              --------   --------
                                                              $1,464.9   $1,361.2
                                                              ========   ========
LIABILITIES, DEFERRED ITEMS AND SHAREHOLDERS' EQUITY
ACCOUNTS PAYABLE AND ACCRUED EXPENSES.......................  $    2.5   $   34.8
DUE TO SUBSIDIARIES.........................................     439.6      535.1
OTHER DEFERRED ITEMS........................................     141.0        1.8
                                                              --------   --------
TOTAL LIABILITIES AND DEFERRED ITEMS........................     583.1      571.7

SHAREHOLDERS' EQUITY
Preferred stock.............................................        --         --
Common stock................................................      35.4       35.0
Additional capital..........................................     384.7      366.1
Reinvested earnings.........................................     664.9      552.2
Accumulated other comprehensive loss........................     (74.1)     (34.4)
                                                              --------   --------
                                                               1,010.9      918.9
Less: cost of common shares in treasury.....................    (129.1)    (129.4)
                                                              --------   --------
TOTAL SHAREHOLDERS' EQUITY..................................     881.8      789.5
                                                              --------   --------
                                                              $1,464.9   $1,361.2
                                                              ========   ========
</Table>

                                        73
<PAGE>

          SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                                GATX CORPORATION
                                (PARENT COMPANY)

                            STATEMENTS OF CASH FLOWS

<Table>
<Caption>
                                                               YEAR ENDED DECEMBER 31
                                                              -------------------------
                                                               2001      2000     1999
                                                              -------   ------   ------
                                                                     IN MILLIONS
<S>                                                           <C>       <C>      <C>
OPERATING ACTIVITIES
Income from continuing operations...........................  $   7.5   $ 30.8   $126.3
Adjustments to reconcile income from continuing operations
  to net cash provided by continuing operations:
     Depreciation and amortization..........................      1.3      1.6      1.4
     Deferred income taxes (benefit)........................    147.1     (9.7)    (7.4)
     Share of net income of continuing subsidiaries less
      dividends received....................................     27.8    (19.1)   (64.6)
Other, including working capital............................     (1.0)    (8.2)     4.3
                                                              -------   ------   ------
     Net cash provided by (used in) continuing operations...    182.7     (4.6)    60.0
INVESTING ACTIVITIES
Additions to property and equipment.........................      (.3)     (.8)    (1.1)
Proceeds from other asset sales.............................       .3       --       --
                                                              -------   ------   ------
     Net cash used in investing activities of continuing
      operations............................................       --      (.8)    (1.1)
FINANCING ACTIVITIES
Investment in subsidiaries..................................    (50.0)   (35.0)      --
Advances (to) from continuing subsidiaries..................    (95.5)    43.4     19.5
Issuance (repurchase) of common stock and other.............     19.3    (20.1)   (27.3)
Cash dividends..............................................    (60.2)   (57.4)   (54.3)
                                                              -------   ------   ------
     Net cash used in financing activities of continuing
      operations............................................   (186.4)   (69.1)   (62.1)
NET TRANSFERS TO DISCONTINUED OPERATIONS....................     (1.5)   (17.5)   (13.0)
                                                              -------   ------   ------
NET DECREASE IN CASH AND CASH EQUIVALENTS FROM CONTINUING
  OPERATIONS................................................     (5.2)   (92.0)   (16.2)
PROCEEDS FROM SALE OF PORTION OF SEGMENT....................      7.1     74.7       --
TAXES PAID ON GAIN FROM SALE OF SEGMENT.....................     (2.5)      --       --
                                                              -------   ------   ------
                                                                  (.6)   (17.3)   (16.2)
NET INCREASE IN CASH AND CASH EQUIVALENTS FROM DISCONTINUED
  OPERATIONS................................................      1.5     17.6     14.9
                                                              -------   ------   ------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS........  $    .9   $   .3   $ (1.3)
                                                              =======   ======   ======
</Table>

                                        74
<PAGE>

          SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                                GATX CORPORATION
                                (PARENT COMPANY)

                       STATEMENTS OF COMPREHENSIVE INCOME

<Table>
<Caption>
                                                               YEAR ENDED DECEMBER 31
                                                              ------------------------
                                                               2001     2000     1999
                                                              ------   ------   ------
                                                                    IN MILLIONS
<S>                                                           <C>      <C>      <C>
Net income..................................................  $172.9   $ 66.6   $151.3
Other comprehensive (loss) income, net of tax:
  Foreign currency translation (loss) gain..................    (3.3)   (28.6)     5.1
  Unrealized (loss) gain on securities, net of
     reclassification adjustments(a)........................   (24.5)    (7.0)    28.3
  Unrealized loss on derivative instruments.................    (6.9)      --       --
  Minimum pension liability.................................    (5.0)      --       --
                                                              ------   ------   ------
Other comprehensive (loss) income...........................   (39.7)   (35.6)    33.4
                                                              ------   ------   ------
COMPREHENSIVE INCOME........................................  $133.2   $ 31.0   $184.7
                                                              ======   ======   ======
(a) Reclassification adjustments:
    Unrealized (loss) gain on securities....................  $ (1.0)  $ 24.6   $ 37.3
    Less: reclassification adjustments for gains realized
          included in net income............................   (23.5)   (31.6)    (9.0)
                                                              ------   ------   ------
    Net unrealized (loss) gain on securities................  $(24.5)  $ (7.0)  $ 28.3
                                                              ======   ======   ======
</Table>

                                        75
<PAGE>

                SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS

                       GATX CORPORATION AND SUBSIDIARIES

<Table>
<Caption>
COL. A                                  COL. B       COL. C         COL. D         COL. E        COL. F
- ------                                ----------   ----------   --------------   ----------     ---------
                                                            ADDITIONS
                                                   ---------------------------
                                      BALANCE AT   CHARGED TO     CHARGED TO                     BALANCE
                                      BEGINNING    COSTS AND    OTHER ACCOUNTS   DEDUCTIONS     AT END OF
DESCRIPTION                           OF PERIOD     EXPENSES       DESCRIBE       DESCRIBE       PERIOD
- -----------                           ----------   ----------   --------------   ----------     ---------
                                                                  IN MILLIONS
<S>                                   <C>          <C>          <C>              <C>            <C>
Year ended December 31, 2001:
  Allowance for possible
     losses(a)......................    $ 95.2       $98.4           $5.8(b)      $(105.2)(c)    $ 94.2
Year ended December 31, 2000:
  Allowance for possible
     losses(a)......................    $113.5       $17.7           $1.0(b)      $ (37.0)(c)    $ 95.2
Year ended December 31, 1999:
  Allowance for possible
     losses(a)......................    $133.6       $11.0           $3.7(b)      $ (34.8)(c)    $113.5
</Table>

- ---------------

(a) Deducted from asset accounts.

(b) Represents principally the recovery of amounts previously written off and
    the transfer from other accounts.

(c) Represents principally uncollectible amounts written off.

                                        76

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.B
<SEQUENCE>3
<FILENAME>c67993ex3-b.txt
<DESCRIPTION>BY-LAWS OF GATX CORPORATION
<TEXT>
<PAGE>
                                                                      EXHIBIT 3B

                                                                         1/26/01
                                   BY-LAWS OF
                                GATX CORPORATION

                                    ARTICLE I

                             MEETING OF SHAREHOLDERS

     SECTION 1. PLACE OF MEETING. Every meeting of the shareholders of GATX
Corporation (hereinafter called the Corporation) shall be held at the principal
office of the Corporation in the State of New York, or at such other place in or
out of said State as shall be specified in the notice of such meeting or waiver
of such notice.

     SECTION 2. ANNUAL MEETINGS. The annual meeting of the shareholders shall be
held at the hour specified in the notice of such meeting, or waiver of such
notice, on the fourth Friday of April in each year (or if that day shall be a
legal holiday, then on the next succeeding business day) or on such other date
as the Board may determine for the election of directors and for the transaction
of such other business as may properly come before the meeting.

     SECTION 3. SPECIAL MEETINGS. Special meetings of the shareholders may,
unless otherwise provided by law, be called by the Chairman of the Board or the
President of the Corporation, or by a majority of the Board of Directors of the
Corporation (hereinafter called the Board).

     SECTION 4. NOTICE OF MEETINGS. Notice of the time and place of holding of
each meeting of the shareholders and of the purpose or purposes for which the
meeting is called shall be in writing and signed by the President or a
Vice-President or the Secretary or an Assistant Secretary of the Corporation. A
copy of such notice shall be served, either personally or by mail, upon each
shareholder entitled to vote at the meeting not less than ten (10) nor more than
sixty (60) days before the meeting. If mailed, such copy shall be directed to
the shareholder at his address as it appears on the stock book, unless he shall
have filed with the Secretary of the Corporation a written request that notices
intended for him be mailed to some other place, in which case it shall be mailed
to the address designated in such request. No notice need be given of any
adjourned meeting, except when expressly required by law.

<PAGE>

     SECTION 5. QUORUM. Unless otherwise provided by law or in the Certificate
of Incorporation of the Corporation as amended (hereinafter called the
Certificate of Incorporation), the presence of the holders of record, in person
or represented by proxy, of a majority of the shares of stock entitled to be
voted thereat shall be necessary to constitute a quorum for the transaction of
business at any meeting of shareholders. In the absence of a quorum at any such
meeting or any adjournment or adjournments thereof, a majority in voting
interest of those present in person or represented by proxy, or in the absence
therefrom of all the shareholders, any officer entitled to preside at, or to act
as secretary of, such meeting, may adjourn such meeting from time to time until
a quorum is present thereat. At any adjourned meeting at which a quorum is
present any business may be transacted which might have been transacted at the
meeting as originally called.

     SECTION 6. ORGANIZATION. At each meeting of the shareholders, the Chairman
of the Board, the President or a Vice-President designated for the purpose by
the Chairman (with priority in the order named), or in the absence of said
officers, a chairman chosen by a majority vote of the shareholders present in
person or represented by proxy and entitled to vote thereat shall act as
chairman. The Secretary shall act as secretary at each meeting of the
shareholders, or in his absence the chairman may appoint any person present to
act as secretary of the meeting.

     SECTION 7. ORDER OF BUSINESS. The order of business at all meetings of the
shareholders shall be determined by the chairman of the meeting.

     SECTION 8. VOTING. Unless otherwise provided by law or in the Certificate
of Incorporation, the Common Stock only shall have voting power. Each holder of
record of shares of stock of the Corporation entitled to vote at any meeting of
shareholders shall, in all matters, be entitled to one vote for each share of
stock owned by him. Shareholders may vote either in person or by proxy. Except
as otherwise provided by law or these By-laws, or by the Certificate of
Incorporation, the majority of the votes cast shall prevail on all matters
submitted to vote at any meeting of the shareholders. Unless so directed by the
chairman of the meeting, the vote at such meeting need not be by ballot, except
that all elections of directors by shareholders shall be by ballot. At the
direction of such chairman that a vote by ballot be taken on any question, such
vote shall be taken. On a

                                      -2-
<PAGE>

vote by ballot each ballot shall be signed by the shareholder voting, or by his
proxy as such if there be such proxy. Except as otherwise provided by law or by
these By-laws all voting may be via voce.

     SECTION 9. INSPECTORS OF ELECTION. At each meeting of the shareholders the
chairman of such meeting shall appoint one or more inspectors of election to act
thereat. No director or candidate for the office of director shall be appointed
such inspector. Each inspector of election so appointed, before entering upon
the discharge of his duties, shall be sworn faithfully to execute the duties of
inspector at such meeting with strict impartiality and according to the best of
his ability, and the oath so taken shall be subscribed by such inspectors. Such
inspectors of election, after the voting on any question, shall make a
certificate of the result of the vote taken. Inspectors need not be
shareholders.

     SECTION 10. RECORD DATE. The Board may fix a day and hour not more than
sixty (60) days prior to the day and hour then fixed for the holding of any
meeting of shareholders as the time as of which shareholders entitled to notice
of and to vote at such meeting shall be determined, and all persons who were
holders of record of voting stock at such time and no others shall be entitled
to notice of and to vote at such meeting.

     SECTION 11. ADVANCE NOTIFICATION OF SHAREHOLDER NOMINATIONS FOR DIRECTORS
AND OTHER PROPOSALS. No shareholder may propose to nominate persons for election
to the Board at an annual meeting of the shareholders of the Corporation or to
bring other business before an annual meeting of the shareholders of the
Corporation, unless such shareholder gives timely notice thereof to the
Secretary of the Corporation. To be timely, a shareholder's notice must be
addressed to the Secretary of the Corporation and received at the principal
executive offices of the Corporation not more than one hundred twenty (120) days
and not less than ninety (90) days prior to the first anniversary date of the
immediately preceding annual meeting; provided, however, that in the event the
annual meeting is called for a date which is not within sixty (60) days before
or after such anniversary date, notice by the shareholder, to be timely, must be
received no later than the close of business on the fifteenth (15th) day
following the day on which notice of the date of the annual meeting was mailed
or public disclosure of the date of the annual meeting was made, whichever
occurs first.

                                      -3-
<PAGE>

     Such shareholder's notice shall set forth: (a) as to each person whom the
shareholder proposes to nominate at the annual meeting for election to the
Board, (i) the name, age, business address and residential address of such
person, (ii) the principal occupation or employment of such person, (iii) the
class and number of shares of the Corporation which are beneficially owned by
such person, (iv) a description of all arrangements or understandings between
such shareholder and such person, (v) all information relating to such person
that is required to be disclosed in solicitations of proxies for election of
directors, or is otherwise required, in each case pursuant to Regulation 14A
under the Securities Exchange Act of 1934, as amended, and any other rules of
the Securities and Exchange Commission, (vi) such other information as may be
reasonably required by the Corporation to determine the eligibility of such
person to serve as a director of the Corporation, and (vii) any such person's
written consent to serve as a director if so elected; (b) as to any other
business that such shareholder proposes to bring before the annual meeting, (i)
a description of the business desired to be brought before the meeting in
sufficient detail for such business to be summarized in the agenda for the
meeting, (ii) the reasons for conducting such business at the meeting, and (iii)
any material interest in such business of such shareholder and the beneficial
owner, if any, on whose behalf the proposal is made; and (c) as to the
shareholder giving the notice and the beneficial owner, if any, on whose behalf
the nomination or proposal is made, (i) the name and address of such
shareholder, as it appears on the Corporation's books, and of any such
beneficial owner, and (ii) the class and number of shares of the Corporation
which are owned beneficially and of record by such shareholder and any such
beneficial owner. Notwithstanding compliance with the foregoing requirements, no
person proposed to be nominated to the Board by a shareholder pursuant to this
procedure shall become a nominee for election to the Board and no other business
shall be considered at the annual meeting unless the shareholder who has
provided the notice or his proxy, nominates such person or introduces such
business at the meeting, as the case may be. The presiding officer of the annual
meeting shall, if the facts warrant, refuse to acknowledge a nomination or the

                                      -4-
<PAGE>

consideration of business which was not made in compliance with the foregoing
requirements.

                                   ARTICLE II

                                    DIRECTORS

     SECTION 1. NUMBER, ELECTION, TERM, POWERS. The Corporation shall have such
number of directors, not less than three (3) nor more than twenty-one (21), as
shall from time to time be determined by the vote of a majority of the entire
board. Except as otherwise provided herein, the directors shall be chosen at the
annual meeting of shareholders in each year, by a plurality of the votes cast in
the election therefor. The term of office of each director shall (unless vacated
as provided herein) be from the time of his election and qualification until the
annual meeting of shareholders next succeeding his election and until his
successor shall have been duly elected and qualified, or until his earlier death
or resignation. The directors shall act only as a board and the individual
directors shall have no power as such. The Board shall have, in the management
of the Corporation's affairs, all powers which are not inconsistent with the
laws of the State of New York or these By-laws, or the Certificate of
Incorporation.

     SECTION 2. QUALIFICATIONS. All directors shall be at least twenty-one (21)
years of age.

     SECTION 3. FIRST MEETING. After each election of directors by the
shareholders, on the same day and at the conclusion of the meeting of
shareholders at which such election shall be held, and at the place where such
election is held, the newly elected Board shall meet for the purpose of
organization, the election of officers and the transaction of other business.
Notice of such meeting need not be given. If a quorum shall not be present at
such time and place, but at least one director is present, then such meeting
shall be adjourned as provided in Section 6 of this Article II. If no director
shall be present at such time and place, then such meeting may be held at any
other time and place which shall be specified in a notice given as hereinafter
provided for special meetings of the Board or in a waiver of notice thereof.

     SECTION 4. REGULAR MEETINGS. Regular meetings of the Board shall be held at
such times and places as the Board by resolution may determine. If any day fixed
for a

                                      -5-
<PAGE>

regular meeting shall be a legal holiday at the place where the meeting is to be
held, then the meeting which would otherwise be held on that day shall be held
at the same hour on the next succeeding business day at said place. Except as
provided by law or these By-laws, notice of regular meetings need not be given.

     SECTION 5. SPECIAL MEETINGS. Special meetings of the Board shall be held
whenever called by the Chairman of the Board or the President or by the
Secretary at the request of a majority of the members of the Board. Except as
otherwise provided by law, notice of each such special meeting shall be mailed
to each director, addressed to him at his residence or usual place of business,
at least two days before the day on which such meeting is to be held, or shall
be sent addressed to him at such place by telegraph, cable or wireless, or be
delivered personally or by telephone, not later than the day before the day on
which such meeting is to be held. Notice of any meeting of the Board need not,
however, be given to any director, if waived by him as in these By-laws
provided. Except as otherwise specifically provided by law or these By-laws, the
notice or waiver of notice of any meeting of the Board need not contain any
statement of the purposes of the meeting or any specification of the business to
be transacted thereat.

     SECTION 6. QUORUM. Unless otherwise provided by law or in the Certificate
of Incorporation or in these By-laws, the presence of not less than one-third of
the number of directors as fixed in accordance with these By-laws shall be
necessary to constitute a quorum for the transaction of business by the Board.
In the absence of a quorum, a majority of the directors present may adjourn any
meeting of the Board from time to time until a quorum shall be present thereat.
Notice of any adjourned meeting need not be given. At any adjourned meeting at
which a quorum is present any business may be transacted which might have been
transacted at the meeting as originally called.

     SECTION 7. VOTING. At all meetings of directors, a quorum being present,
all matters, except those the manner of deciding upon which is otherwise
provided by law or these By-laws, or in the Certificate of Incorporation, shall
be decided by the vote of a majority of the directors present.

     SECTION 8. ORGANIZATION. At each meeting of the Board the Chairman of the
Board or, in the Chairman's absence, a director chosen by a majority of the
directors present,

                                      -6-
<PAGE>

shall act as chairman. The Secretary, or in the Secretary's absence any person
appointed by the chairman, shall act as secretary of the meeting. Any meeting of
the Board may be adjourned by the vote of a majority of the directors present at
such meeting.

     SECTION 9. VACANCIES. Any vacancy in the Board whether arising from death,
resignation, an increase in the number of directors or any other cause, may be
filled by the vote of a majority of the remaining directors, provided that, in
the case of a vacancy occurring through the resignation of a director, the
resigning director shall be entitled to vote with the other directors for his
successor.

     SECTION 10. PLACE OF MEETING. The Board may hold its meetings at such place
or places within or without the State of New York as it may from time to time by
resolution determine or as shall be specified or fixed in the respective notices
or waivers of notice thereof.

     SECTION 11. INDEMNIFICATION. (a) The Corporation shall indemnify to the
fullest extent permitted by law, any person made, or threatened to be made, a
party to an action or proceeding, civil or criminal (including an action by or
in the right of the Corporation or by or in the right of any other corporation
or business entity of any type or kind, domestic or foreign, which any director
or officer of the Corporation served in any capacity at the request of the
Corporation), by reason of the fact that he or she, his or her testator or
intestate, was a director or officer of the Corporation (or such director or
officer, his or her testator or intestate served the Corporation or such other
corporation or business entity in any capacity), against judgments, fines,
amounts paid in settlement and reasonable expenses, including attorneys' fees
actually and necessarily incurred as a result of such action or proceeding, or
any appeal therein, and the Corporation may pay, in advance of final disposition
of any such action or proceeding, expenses (including attorneys' fees) incurred
by such person in defending such action or proceeding.

     The Corporation may indemnify, and make advancements to, any person made,
or threatened to be made, a party to any such action or proceeding by reason of
the fact that he or she, his or her testator or intestate, is or was an agent or
employee (other than a director or officer) of the Corporation (or served
another corporation or business entity at the request of the Corporation in any
capacity), on such terms, to such extent, and subject

                                      -7-
<PAGE>

to such conditions, as the Board shall determine, including payment, in advance
of final disposition of any such action or proceeding, expenses (including
attorneys' fees) incurred by such person in defending such action or proceeding.

     In addition to the foregoing, the Corporation shall indemnify to the
fullest extent permitted by law, any person made, or threatened to be made, a
party to an action or proceeding, civil or criminal, by reason of the fact that
such person, his or her testator or intestate, is or was a director or officer
of any other corporation or business entity, of any type or kind, domestic or
foreign, which any such person served at the request of the Corporation, against
judgments, fines, amounts paid in settlement (with the prior consent of the
Corporation) and reasonable expenses, including attorneys' fees actually and
necessarily incurred as a result of such action or proceeding, or any appeal
therein, and the Corporation may pay, in advance of final disposition of any
such action or proceeding, expenses (including attorneys' fees) incurred by such
person in defending such action or proceeding.

     (b) A person shall be presumed to be entitled to indemnification for any
act or omission covered by this By-law. The burden of proof of establishing that
a person is not entitled to indemnification because of the failure to fulfill
some requirement of New York law, the Corporation's charter, or the By-laws
shall be on the Corporation.

     (c) If a claim under this By-law is not paid in full by the Corporation
within thirty days after a written claim has been received by the Corporation,
the claimant may at any time thereafter bring suit against the Corporation to
recover the unpaid amount of the claim and, if successful in whole or in part,
the claimant shall be entitled to be paid also the expense of prosecuting such
claim, including attorneys' fees.

     SECTION 12. ACTION BY WRITTEN CONSENT. Unless otherwise provided by law or
in the Certificate of Incorporation of the Corporation, any action required or
permitted to be taken by the Board or any committee thereof may be taken without
a meeting if all members of the Board or the committee consent in writing to the
adoption of a resolution authorizing the action. The resolution and the written
consents thereto by the members of the Board or committee shall be filed with
the minutes of the proceedings of the Board or committee.

                                      -8-
<PAGE>

     SECTION 13. ACTION BY MEANS OF CONFERENCE TELEPHONE. Any one or more
members of the Board may participate in a regular or special meeting of the
Board by means of a conference telephone or similar communications equipment
allowing all persons participating in the meeting to hear each other at the same
time. Participation by such means shall constitute presence in person at a
meeting.

                                   ARTICLE III

                                   COMMITTEES

     SECTION 1. COMMITTEES. On the terms, to the extent and subject to the
conditions, prescribed by law or by resolution of the Board, the Board, by
resolution adopted by a majority of the entire Board, may designate from among
its members an Executive Committee and other committees, each of which shall
consist of three or more directors and shall have the authority of the Board.
The Board may designate one or more directors as alternate members of any
committee, who may act in the place of any absent member or members of such
committee. The presence of not less than one-third of the number of members of
any committee or two members of such committee, whichever shall be greater,
shall be necessary to constitute a quorum of such committee and, except as
otherwise provided by law, the Certificate of Incorporation or these By-laws, a
majority vote of the committee members present shall be the act of the
committee.

     SECTION 2. ACTION BY MEANS OF CONFERENCE TELEPHONE. Any one or more members
of any committee of the Board may participate in a meeting of such committee by
means of a conference telephone or similar communications equipment allowing all
persons participating in the meeting to hear each other at the same time.
Participation by such means shall constitute presence in person at a meeting.

                                   ARTICLE IV

                                    OFFICERS

     SECTION 1. NUMBER. The officers of the Corporation shall be a Chairman of
the Board, a President, one or more Vice-Presidents, a Secretary, a Treasurer
and a Controller. The officers of the Corporation may also include, at the
option of the Board, one or more Vice-Chairmen of the Board, each of whom shall
be a member of the Board. Two or more offices may be conferred upon one person,
except the offices of President

                                      -9-
<PAGE>

and Secretary. The Board may require any officer, agent or employee to give
security for faithful performance of such person's duties.

     SECTION 2. ELECTION, TERM OF OFFICE, QUALIFICATION. The officers of the
Corporation shall be chosen by the Board as soon as practicable after each
annual election of directors, each such officer to hold office until his
successor shall have been chosen and qualified, or until his earlier death or
resignation, or removal in the manner hereinafter provided.

     SECTION 3. SUBORDINATE OFFICERS. The Board may appoint as subordinate
officers, assistants to any officer including assistant secretaries and
assistant treasurers, agents or employees as the Board may deem necessary or
advisable, each of whom shall serve for such period, have such authority and
perform such duties as the Board may from time to time determine or as may be
set forth in these By-laws. The Board may delegate to any officer the power to
appoint and remove subordinate officers, assistant secretaries, assistant
treasurers, agents or employees.

     SECTION 4. MANAGEMENT DIRECTION. The Board shall designate an officer of
the Corporation to be the chief executive officer of the Corporation and such
chief executive officer shall have, subject to the control of the Board, general
and active supervision and direction over the property, business and affairs of
the Corporation and the personnel thereof.

     SECTION 5. THE CHAIRMAN OF THE BOARD. The Chairman of the Board shall
perform all duties customarily incident to the office of Chairman of the Board
and such other duties as may from time to time be assigned to him by the Board.
He shall, if present, preside at all meetings of the shareholders and of the
Board.

     SECTION 6. THE VICE-CHAIRMAN OF THE BOARD. Each Vice-Chairman of the Board
shall have such authority and perform such duties as may from time to time be
assigned by these By-laws, the Board or the Chairman of the Board.

     SECTION 7. THE PRESIDENT. The President shall perform all duties
customarily incident to the office of President and such other duties as may
from time to time be assigned to him by the Board. In case of the absence or
inability to act of the Chairman of the Board, the President shall perform the
duties of the Chairman of the Board, and

                                      -10-
<PAGE>

when so acting shall have all the powers of and be subject to all the
restrictions upon the Chairman of the Board.

     SECTION 8. VICE-PRESIDENTS. Each Vice-President shall have such powers and
perform such duties as the Board, the Chairman of the Board or the President may
from time to time prescribe, and shall perform such other duties as may be
prescribed by these By-laws. In case of the absence or inability to act of the
President, then one of the Vice-Presidents who shall be designated for the
purpose by the Board shall perform the duties of the President, and when so
acting shall have all the powers of and be subject to all the restrictions upon
the President.

     SECTION 9. THE SECRETARY. The Secretary shall act as secretary of, and keep
the minutes of, all meetings of the Board and of the shareholders; he shall
cause to be given such notice of all meetings of the shareholders and directors
as required; he shall be custodian of the seal of the Corporation and shall
affix the seal or cause it to be affixed to all certificates and documents, the
execution of which on behalf of the Corporation under its seal shall have been
specifically or generally authorized; he shall have charge of the books, records
and papers of the Corporation relating to its organization as a corporation; and
he shall in general perform all the duties incident to the office of Secretary.
He shall also have such other powers and perform such other duties, not
inconsistent with these By-laws, as the Chairman of the Board, the President or
the Board shall from time to time prescribe.

     SECTION 10. THE TREASURER. The Treasurer shall have charge and custody of,
and be responsible for, all the funds and securities of the Corporation and
shall keep full and accurate accounts of receipts and disbursements in books
belonging to the Corporation and shall deposit all moneys and other valuable
effects in the name of and to the credit of the Corporation in such banks or
other depositaries as may be designated by the Board; he shall disburse the
funds of the Corporation, taking proper vouchers for such disbursements, and
shall render to the Chairman of the Board, the President or the Board, whenever
any one or more of them may require him so to do, a statement of all his
transactions as Treasurer; and, in general, he shall perform all the duties
incident to the

                                      -11-
<PAGE>

office of Treasurer and such other duties as may from time to time be assigned
to him by the Chairman of the Board, the President or the Board.

     SECTION 11. THE CONTROLLER. The Controller shall keep accurate accounts, in
such form as may be approved by the Board of Directors, of all financial
transactions of the Corporation; he shall supervise and direct the keeping of
all of the financial records and accounting records of the Corporation, and
shall have general charge, supervision and direction of the accounting
departments of the Corporation; he shall discharge such other duties and have
such other powers as may be required of or granted to him by the Board.

     SECTION 12. ASSISTANTS TO THE PRESIDENT. Each assistant to the President
shall, at the request of the President, aid and assist him in the performance of
his duties and the exercise of his powers, and have such other powers and
perform such other duties as may from time to time be assigned to him by the
Chairman of the Board, the President or the Board.

     SECTION 13. ASSISTANT SECRETARIES. In case of the absence or inability to
act of the Secretary, the Assistant Secretary, or, if there shall be more than
one, any of the Assistant Secretaries, shall perform the duties of the
Secretary, and, when so acting shall have all the powers of, and be subject to
all the restrictions upon, the Secretary. Each of the Assistant Secretaries
shall perform such other duties as from time to time may be assigned to him by
the Chairman of the Board, the President, the Secretary or the Board.

     SECTION 14. ASSISTANT TREASURERS. In case of the absence or inability to
act of the Treasurer, the Assistant Treasurer, or, if there be more than one,
any of the Assistant Treasurers, shall perform the duties of the Treasurer, and,
when so acting, shall have all the powers of, and be subject to all the
restrictions upon, the Treasurer. Each of the Assistant Treasurers shall perform
such other duties as from time to time may be assigned to him by the Chairman of
the Board, the President, the Treasurer or the Board.

     SECTION 15. GENERAL PROVISIONS. All officers shall serve under the
direction of and at the pleasure of the Board and be subject to removal thereby
at any time with or without cause. Any vacancy occurring in any office may be
filled by the Board.

                                      -12-
<PAGE>

                                    ARTICLE V

                 CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.

     SECTION 1. EXECUTION OF CONTRACTS. Except as otherwise provided by law or
in these By-laws, the Chairman of the Board, any Vice-Chairman of the Board, the
President or any Vice-President shall have authority to execute and deliver any
and all instruments for and in the name of the Corporation. The Board may
authorize any other officer or officers, agent or agents to execute and deliver
any instrument for and in the name of the Corporation and such authority may be
general or confined to specific instances. Unless authorized by the Board or by
these By-laws, no officer, agent or employee shall have any power or authority
to bind the Corporation by any contract or engagement or to pledge its credit or
to render it pecuniarily liable for any purpose or to any amount.

     SECTION 2. INDEBTEDNESS. No loans shall be contracted on behalf of the
Corporation and no negotiable paper shall be issued in its name unless
authorized by the resolutions of the Board. When authorized by the Board so to
do, any officer or agent of the Corporation thereunto authorized may effect
loans and advances for the Corporation from any bank, trust company or other
institution, or from any firm, corporation or individual, and for such loans and
advances may make, execute and deliver promissory notes, bonds, or other
certificates or evidences of indebtedness of the Corporation and, when
authorized so to do, may pledge, hypothecate or transfer any securities or other
property of the Corporation as security for any such loans or advances. Such
authority may be general or confined to specific instances.

     SECTION 3. CHECKS, DRAFTS, ETC. All checks, drafts, and other orders for
the payment of moneys out of the funds of the Corporation and all notes or other
evidences of indebtedness of the Corporation shall be signed on behalf of the
Corporation in such manner as shall from time to time be determined by
resolution of the Board.

     SECTION 4. DEPOSITS. All funds of the Corporation not otherwise employed
shall be deposited from time to time to the credit of the Corporation in such
banks, trust companies or other depositaries as the Board may select or as may
be selected by any officer or officers, agent or agents of the Corporation to
whom such power may from time to time be delegated by the Board; and, for the
purpose of such deposit, the Chairman of the Board, the President, any
Vice-President, the Treasurer or the Secretary, or any other officer, agent or
employee of the Corporation to whom such power may be delegated by

                                      -13-
<PAGE>

the Board, may endorse, assign and deliver checks, drafts and other orders for
the payment of moneys which are payable to the order of the Corporation.

                                   ARTICLE VI

                              SHARES AND DIVIDENDS

     SECTION 1. CONSIDERATION FOR ISSUE OF STOCK. No stock shall be issued
except as permitted under the Business Corporation Law of the State of New York.

     SECTION 2. CERTIFICATES. The shares of the Corporation shall either be
represented by certificates or shall be uncertificated and represented by book
entry registered in the name of the holder on the books and records of the
Corporation or its transfer agent. At the direction of the Corporation to its
stock transfer agent and absent a specific request for a certificate by the
registered holder or transferee thereof, all shares of the Corporation shall be
uncertificated upon the original issuance thereof by the Corporation or upon the
surrender of the certificate representing such shares to the Corporation (Direct
Registration of shares). If shares are represented by certificates, each holder
of record of shares of stock of the Corporation shall be provided with a
certificate or certificates of stock representing the number of shares owned by
such holder, in such form as shall be approved by the Board, signed by the
Chairman of the Board, or President or a Vice-President and the Treasurer or an
Assistant Treasurer or the Secretary or an Assistant Secretary, and sealed with
the seal of the Corporation, which seal may be an engraved or printed facsimile,
certifying the number of shares owned by him in the Corporation. The signatures
of the officers upon a certificate may be facsimiles if the certificate is
countersigned by a transfer agent or registered by a registrar other than the
Corporation itself or its employee. In case any such person who shall have
signed, or whose facsimile signature has been placed upon, such certificate
shall have ceased to hold such position before such certificate is issued, it
may be issued by the Corporation with the same effect as if such person had not
ceased to hold such position at the date of its issue. Upon the election of the
Corporation to provide for Direct Registration of shares, such certificates
shall be provided only upon request to the Corporation by the registered holder
or transferee thereof.

                                      -14-
<PAGE>

     SECTION 3. TRANSFER OF SHARES. Transfers of shares of the capital stock of
the Corporation shall be made only on the books of the Corporation by the holder
thereof, or by his attorney thereunto authorized by a power of attorney duly
executed and filed with the agent or officer in charge of such books, subject to
such proof or guaranty signature as the Corporation or its transfer agent may
require, if any, and on surrender of the certificate or certificates for such
shares, properly endorsed, or upon receipt of proper transfer instructions from
the owner of uncertificated shares, or upon the escheat of said shares under the
laws of any state of the United States. A person in whose name shares of stock
stand on the books of the Corporation shall be deemed the owner thereof as
regards the Corporation, provided that whenever any transfer of shares shall be
made for collateral security, and not absolutely, such fact, if known to the
officer in charge or to said transfer agent, shall be so expressed in the entry
of transfer.

     SECTION 4. RECORD DATE. The Board may fix a day and hour not exceeding
sixty (60) days preceding the date fixed for the payment of any dividend or the
making of any distribution, or for the delivery of evidences of rights or
evidences of interests arising out of any changes, conversion or exchange of
capital stock, as a record time for the determination of the shareholders
entitled to receive such dividend, distribution, rights or interests, and in
such case only shareholders of record at the time so fixed shall be entitled to
receive such dividend, distribution, rights or interests.

     SECTION 5. LOST, STOLEN, DESTROYED OR MUTILATED CERTIFICATES. A certificate
for shares of the stock of the Corporation may be issued in place of any
certificate lost, stolen, destroyed or mutilated, but only on delivery to the
Corporation, unless the Board of Directors otherwise determines, of a bond of
indemnity, in form and amount and with one or more sureties satisfactory to the
Board, or such officer or officers of the Corporation or such transfer agent as
the Board may from time to time designate, and of such evidence of such loss,
theft, destruction or mutilation as the Board, or such officer or officers or
transfer agent, may require.

                                      -15-
<PAGE>

                                   ARTICLE VII

                                OFFICES AND BOOKS

     SECTION 1. OFFICES. The Board may from time to time and at any time
establish offices of the Corporation or branches of its business at whatever
place or places seem to it expedient. Offices or agencies for the transfer and
registration of stock shall at all times be maintained in the City of New York.
Additional such offices or agencies may be maintained elsewhere, in the
discretion of the Board.

     SECTION 2. BOOKS. There shall be kept at the office of the Corporation in
Chicago, Illinois, correct books of all the business and transactions of the
Corporation, and, at the office of the Corporation in the State of New York, or
at the office of a transfer agent of the Corporation in such State, the stock
book of the Corporation, which shall contain the names, alphabetically arranged,
of all persons who are shareholders of the Corporation, showing their respective
places of residence, the number of shares held by them respectively, and the
time when they respectively became the owners thereof. The stock book shall at
all times during business hours be open to the inspection of all persons
permitted by law to inspect the same.

                                  ARTICLE VIII

                                      SEAL

     SECTION 1. The common seal of the Corporation shall consist of a round seal
with the words "GATX CORPORATION" in the margin and the words "NEW YORK, 1916"
in the center thereof.

                                   ARTICLE IX

                                WAIVER OF NOTICE

     SECTION 1. Whenever any notice whatever is required to be given by these
By-laws or the Certificate of Incorporation or by law, the person entitled
thereto may, in person, or in the case of a shareholder, by his duly authorized
attorney, waive such notice in writing (which shall include the use of
telegraph, cable, radio or wireless), whether before or after the meeting or
other matter or event in respect of which such notice is to be given, and in
such event such waiver shall be equivalent to such notice and such notice need
not be given to such person, and any action to be taken after such notice or
after the lapse of a prescribed period of time may be taken without such notice
and without the lapse of any

                                      -16-
<PAGE>

period of time. The presence of a director at any meeting of the Board shall
constitute waiver of notice thereof by him.

                                    ARTICLE X

                                   FISCAL YEAR

     SECTION 1. The fiscal year of the Corporation shall end on the thirty-first
day of December in each year.

                                   ARTICLE XI

                                   AMENDMENTS

     SECTION 1. These By-laws may be altered, changed, amended or repealed and
new By-laws adopted at any regular or special meeting of the Board of Directors,
by a majority vote of all the Directors, provided notice of the proposed
alteration, change, amendment or repeal shall have been given with notice of the
meeting.



                                      -17-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.K
<SEQUENCE>4
<FILENAME>c67993ex10-k.txt
<DESCRIPTION>AGREEMENT FOR CONTINUED EMPLOYMENT
<TEXT>
<PAGE>
                                                                    EXHIBIT 10 K

         AMENDED AGREEMENT FOR EMPLOYMENT FOLLOWING A CHANGE OF CONTROL



                AGREEMENT by and between GATX Corporation, a New York
corporation (the "Company") and ____________ (the "Executive") dated as of the
______________ day of 2002.

                The Board of Directors of the Company (the "Board"), has
determined that it is in the best interests of the Company and its shareholders
to assure that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined below). The Board believes it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control and to encourage the
Executive's full attention and dedication to the Company currently and in the
event of any threatened or pending Change of Control, and to provide the
Executive with compensation and benefits arrangements upon a Change of Control
which ensure that the compensation and benefits expectations of the Executive
will be satisfied and which are competitive with those of other corporations.
Therefore, in order to accomplish these objectives, the Board has caused the
Company to enter into this Agreement.

                NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

                1. Certain Definitions. (a) The "Effective Date" shall mean the
first date during the Change of Control Period (as defined in Section 1(b)) on
which a Change of Control (as defined in Section 2) occurs. Anything in this
Agreement to the contrary notwithstanding, if a Change of Control occurs, and if
the Executive's employment with the Company is terminated prior to the date on
which the Change of Control occurs, and if it is reasonably demonstrated by the
Executive that such termination of employment (i) was at the request of a third
party who has taken steps reasonably calculated to effect a Change of Control or
(ii) otherwise arose in connection with or anticipation of a Change of Control,
then for all purposes of this Agreement the "Effective Date" shall mean the date
immediately prior to the date of such termination of employment.

                (b) The "Change of Control Period" shall mean the period
commencing on January 1, 2001, and ending on the third anniversary of the date
thereof; provided, however, that commencing on January 1, 2002, and on each
annual anniversary of such date (such date and each annual anniversary thereof
shall be hereinafter referred to as the "Renewal Date"), unless previously
terminated, the Change of Control Period shall be automatically extended so as
to terminate three years from such Renewal Date, unless at least 60 days prior
to the Renewal Date the Company shall give notice to the Executive that the
Change of Control Period shall not be so extended.

                2. Change of Control. For the purpose of this Agreement, a
"Change of Control" shall mean:

                (a) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3


<PAGE>

promulgated under the Exchange Act) of 20% or more of either (i) the then
outstanding shares of common stock of the Company (the "Outstanding Company
Common Stock") or (ii) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); provided, however, that
for purposes of this subsection (a), the following acquisitions shall not
constitute a Change of Control: (1) any acquisition directly from the Company,
(2) any acquisition by the Company, (3) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company or (4) any acquisition by any corporation
pursuant to a transaction which complies with clauses (1), (2) and (3) of
subsection (c) of this Section 2; or

                (b) Individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or

                (c) Consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of the
Company (a "Business Combination"), in each case, unless, following such
Business Combination, (i) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately prior
to such Business Combination beneficially own, directly or indirectly, more than
65% of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be, (ii) no
Person (excluding any corporation resulting from such Business Combination or
any employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to the
Business Combination and (iii) at least a majority of the members of the board
of directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or

                                       2
<PAGE>

                (d) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company; or

                (e) Consummation of a Business Combination involving any
subsidiary of the Company (a "Company Unit") that is the primary employer of the
Executive immediately prior to such Business Combination unless immediately
after such Business Combination the Company owns at least 50% of the voting
stock of such Company Unit.

                3. Employment Period. The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in the employ
of the Company subject to the terms and conditions of this Agreement, for the
period commencing on the Effective Date and ending on the third anniversary of
such date (the "Employment Period").

                4. Terms of Employment. (a) Position and Duties. (i) During the
Employment Period, (A) the Executive's position (including status, offices,
titles and reporting requirements), authority, duties and responsibilities shall
be at least commensurate in all material respects with the most significant of
those held, exercised and assigned by or to the Executive at any time during the
120-day period immediately preceding the Effective Date and (B) the Executive's
services shall be performed at the location where the Executive was employed
immediately preceding the Effective Date or any office or location less than 35
miles from such location.

                         (ii) During the Employment Period, and excluding any
periods of vacation and sick leave to which the Executive is entitled, the
Executive agrees to devote reasonable attention and time during normal business
hours to the business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder, to use the
Executive's reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a violation of
this Agreement for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (C) manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Executive's responsibilities as an employee of the Company in accordance with
this Agreement. It is expressly understood and agreed that to the extent that
any such activities have been conducted by the Executive prior to the Effective
Date, the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the Executive's
responsibilities to the Company.

                (b) Compensation. (i) Base Salary. During the Employment Period,
the Executive shall receive an annual base salary ("Annual Base Salary"), which
shall be paid at a monthly rate, at least equal to twelve times the highest
monthly base salary paid or payable, including any base salary which has been
earned but deferred, to the Executive by the Company and its affiliated
companies during the twelve-month period immediately preceding the month in
which the Effective Date occurs. During the Employment Period, the Annual Base
Salary shall be reviewed no more than 12 months

                                       3
<PAGE>

after the last salary increase awarded to the Executive prior to the Effective
Date and thereafter at least annually. Any increase in Annual Base Salary shall
not serve to limit or reduce any other obligation to the Executive under this
Agreement. Annual Base Salary shall not be reduced after any such increase and
the term Annual Base Salary as utilized in this Agreement shall refer to Annual
Base Salary as so increased. As used in this Agreement, the term "affiliated
companies" shall include any company controlled by, controlling or under common
control with the Company.

                          (ii) Annual Bonus. In addition to Annual Base Salary,
the Executive shall be awarded, for each fiscal year ending during the
Employment Period, an annual bonus (the "Annual Bonus") in cash at least equal
to the highest bonus earned by the Executive for the last two full fiscal years
prior to the Effective Date (annualized in the event that the Executive was not
employed by the Company for the whole of such fiscal year). Each such Annual
Bonus shall be paid no later than the end of the third month of the fiscal year
next following the fiscal year for which the Annual Bonus is awarded, unless the
Executive shall elect to defer the receipt of such Annual Bonus.

                         (iii) Long-Term Incentive, Savings and Retirement
Plans. During the Employment Period, the Executive shall be entitled to
participate in all long-term incentive, stock option, savings and retirement
plans, practices, policies and programs applicable generally to other peer
executives of the Company and its affiliated companies, but in no event shall
such plans, practices, policies and programs provide the Executive with
long-term incentive opportunities (measured with respect to both regular and
special incentive opportunities, to the extent, if any, that such distinction is
applicable), stock option opportunities, savings opportunities and retirement
benefit opportunities, in each case, less favorable, in the aggregate, than the
most favorable of those provided by the Company and its affiliated companies for
the Executive under such plans, practices, policies and programs as in effect at
any time during the 120-day period immediately preceding the Effective Date or
if more favorable to the Executive, those provided generally at any time after
the Effective Date to other peer executives of the Company and its affiliated
companies.

                         (iv) Welfare Benefit Plans. During the Employment
Period, the Executive and/or the Executive's family, as the case may be, shall
be eligible for participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the Company and its
affiliated companies (including, without limitation, medical, prescription,
dental, disability, employee life, group life, accidental death and travel
accident insurance plans and programs) to the extent applicable generally to
other peer executives of the Company and its affiliated companies, but in no
event shall such plans, practices, policies and programs provide the Executive
with benefits which are less favorable, in the aggregate, than the most
favorable of such plans, practices, policies and programs in effect for the
Executive at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, those provided generally
at any time after the Effective Date to other peer executives of the Company and
its affiliated companies.

                                       4
<PAGE>

                         (v) Expenses. During the Employment Period, the
Executive shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Executive in accordance with the most favorable
policies, practices and procedures of the Company and its affiliated companies
in effect for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives of
the Company and its affiliated companies.

                         (vi) Fringe Benefits. During the Employment Period, the
Executive shall be entitled to fringe benefits, including, without limitation,
tax and financial planning services, payment of club dues, and, if applicable,
use of an automobile and payment of related expenses, or payment of an
automobile allowance in accordance with the most favorable plans, practices,
programs and policies of the Company and its affiliated companies in effect for
the Executive at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect generally at
any time thereafter with respect to other peer executives of the Company and its
affiliated companies.

                         (vii) Office and Support Staff. During the Employment
Period, the Executive shall be entitled to an office or offices of a size and
with furnishings and other appointments, and to exclusive personal secretarial
and other assistance, at least equal to the most favorable of the foregoing
provided to the Executive by the Company and its affiliated companies at any
time during the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executive, as provided generally at any time thereafter
with respect to other peer executives of the Company and its affiliated
companies.

                         (viii) Vacation. During the Employment Period, the
Executive shall be entitled to paid vacation in accordance with the most
favorable plans, policies, programs and practices of the Company and its
affiliated companies as in effect for the Executive at any time during the
120-day period immediately preceding the Effective Date or, if more favorable to
the Executive, as in effect generally at any time thereafter with respect to
other peer executives of the Company and its affiliated companies.

                5. Termination of Employment. (a) Death or Disability. The
Executive's employment shall terminate automatically upon the Executive's death
during the Employment Period. If Disability of the Executive has occurred during
the Employment Period (pursuant to the definition of Disability set forth
below), the Company may give to the Executive written notice in accordance with
Section 12(b) of this Agreement of its intention to terminate the Executive's
employment no sooner than 30 days following such notice. In such event, the
Executive's employment with the Company shall terminate effective on the date
specified in such notice (the "Disability Effective Date"), provided that the
Executive shall not have returned to full-time performance of the Executive's
duties prior thereto. For purposes of this Agreement, "Disability" shall mean
any disability that (a) entitles the Executive to disability income benefits
under the GATX Long Term Disability Income Plan as in effect on the day prior to
the Effective Date, and (b) prevents the executive, for the duration of the
Employment Period, from engaging in

                                       5
<PAGE>

the same or comparable type of employment as that in which the Executive was
engaged on the day prior to the Effective Date.

                (b) Cause. The Company may terminate the Executive's employment
during the Employment Period only for Cause. For purposes of this Agreement,
"Cause" shall mean:

                 (i) the willful and continued failure of the Executive to
        perform substantially the Executive's duties with the Company or one of
        its affiliates (other than any such failure resulting from incapacity
        due to physical or mental illness), after a written demand for
        substantial performance is delivered to the Executive by the Board or
        the Chief Executive Officer of the Company which specifically identifies
        the manner in which the Board or Chief Executive Officer believes that
        the Executive has not substantially performed the Executive's duties, or

                (ii) the willful engaging by the Executive in illegal conduct or
        gross misconduct which is materially and demonstrably injurious to the
        Company.

For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or upon the instructions or concurrence of the Chief
Executive Officer or a senior officer of the Company or based upon the advice of
counsel for the Company shall be conclusively presumed to be done, or omitted to
be done, by the Executive in good faith and in the best interests of the
Company. The cessation of employment of the Executive shall not be deemed to be
for Cause unless and until there shall have been delivered to the Executive a
copy of a resolution duly adopted by the affirmative vote of not less than
three-quarters of the entire membership of the Board at a meeting of the Board
called and held for such purpose (after reasonable notice is provided to the
Executive and the Executive is given an opportunity, together with counsel, to
be heard before the Board), finding that, in the good faith opinion of the
Board, the Executive is guilty of the conduct described in subparagraph (i) or
(ii) above, and specifying the particulars thereof in detail.

                (c) Good Reason. The Executive's employment may be terminated by
the Executive for Good Reason. For purposes of this Agreement, "Good Reason"
shall mean:

                 (i) the assignment to the Executive of any duties inconsistent
        in any respect with the Executive's position (including status, offices,
        titles and reporting requirements), authority, duties or
        responsibilities as contemplated by Section 4(a) of this Agreement, or
        any other action by the Company which results in a diminution in such
        position, authority, duties or responsibilities, excluding for this
        purpose an isolated, insubstantial and inadvertent action not taken in
        bad faith and which is remedied by the Company promptly after receipt of
        notice thereof given by the Executive;

                                       6
<PAGE>

                 (ii) any failure by the Company to comply with any of the
        provisions of Section 4(b) of this Agreement, other than an isolated,
        insubstantial and inadvertent failure not occurring in bad faith and
        which is remedied by the Company promptly after receipt of notice
        thereof given by the Executive;

                 (iii) the Company's requiring the Executive to be based at any
        office or location other than as provided in Section 4(a)(i)(B) hereof
        or the Company's requiring the Executive to travel on Company business
        to a substantially greater extent than required immediately prior to the
        Effective Date;

                 (iv) any purported termination by the Company of the
        Executive's employment otherwise than as expressly permitted by this
        Agreement; or

                 (v) any failure by the Company to comply with and satisfy
        Section 11(c) of this Agreement.

For purposes of this Section 5(c), any good faith determination of "Good Reason"
made by the Executive shall be conclusive.

                (d) Notice of Termination. Any termination by the Company for
Cause, or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 12(b) of
this Agreement. For purposes of this Agreement, a "Notice of Termination" means
a written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than thirty
days after the giving of such notice). The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
the Executive or the Company, respectively, hereunder or preclude the Executive
or the Company, respectively, from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.

                (e) Date of Termination. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be, (ii) if the Executive's
employment is terminated by the Company other than for Cause or Disability, the
Date of Termination shall be the date on which the Company notifies the
Executive of such termination and (iii) if the Executive's employment is
terminated by reason of death or Disability, the Date of Termination shall be
the date of death of the Executive or the Disability Effective Date, as the case
may be.

                6. Obligations of the Company upon Termination. (a) Good Reason;
Other Than for Cause, Death or Disability. If, during the Employment Period, the
Company

                                       7
<PAGE>

shall terminate the Executive's employment other than for Cause, death or
Disability or the Executive shall terminate employment for Good Reason:

            (i) The Company shall pay to the Executive in a lump sum in cash
        within 30 days after the Date of Termination (except in the event of an
        election made by the Executive pursuant to D below) the aggregate of the
        following amounts:

                         A. the sum of (1) the Executive's Annual Base Salary
                through the Date of Termination to the extent not theretofore
                paid, (2) the product of (x) the Executive's Annual Bonus as
                defined in Section 4(b)(ii) of the Agreement (annualized for any
                fiscal year consisting of less than twelve full months or during
                which the Executive was employed for less than twelve full
                months) and (y) a fraction, the numerator of which is the number
                of days in the current fiscal year through the Date of
                Termination, and the denominator of which is 365 and (3) any
                compensation previously deferred by the Executive (together with
                any accrued interest or earnings thereon) and any accrued
                vacation pay, in each case to the extent not theretofore paid
                (the sum of the amounts described in clauses (1), (2), and (3)
                shall be hereinafter referred to as the "Accrued Obligations");
                and

                         B. the amount equal to the product of (1) three and (2)
                the sum of (x) the Executive's Annual Base Salary and (y) the
                Executive's target bonus under the Company's Management
                Incentive Plan, or any comparable bonus plan in which the
                Executive participates and which has a target bonus generally
                similar to that in the Company's Management Incentive Plan (the
                "Target Bonus"), less amounts, if any, paid to the Executive in
                accordance with the Company's severance pay policies; and

                         C. an amount equal to the excess of (a) the actuarial
                equivalent of the benefit under the Company's qualified defined
                benefit retirement plan (the "Retirement Plan") and any excess
                or supplemental retirement plan in which the Executive
                participates (together, the "SERP") (utilizing in each case
                actuarial assumptions no less favorable to the Executive than
                those in effect under the Company's Retirement Plan immediately
                prior to the Effective Date), which the Executive would receive
                if the Executive's employment continued for three years after
                the Date of Termination assuming for this purpose that all
                accrued benefits are fully vested, and, assuming that the
                Executive's compensation in each of the three years is equal to
                the Annual Base Salary as required by Section 4(b)(i) and plus
                the Executive's Target Bonus as described in Section 6(i)(B) for
                the most recent fiscal year (or other bonus amount considered
                pensionable under the Retirement Plan), over (b) the actuarial
                equivalent of the Executive's actual benefit (paid or payable),
                if any, under the Retirement Plan and the SERP as of the Date of
                Termination;

                          D. should the Executive so elect by written notice
                provided to the Benefits Administrator no later than the
                business day immediately preceding the Effective Date, an amount
                equal to the present value of the

                                       8
<PAGE>

                benefits to which the Executive is entitled under the SERP as of
                the Date of Termination, utilizing (a) as a discount rate the
                rate of return on 10-year Treasury Securities in effect for the
                month prior to the month in which the change of control occurs,
                and (b) mortality assumptions based on the Applicable Mortality
                Table defined in Section 417(e)(3)(A)(1) of the Code (as
                hereinafter defined); such amount shall be paid on the first
                anniversary of the Effective Date if the Executive's employment
                has been terminated as above provided prior thereto, otherwise
                it shall be paid on the Executive's Date of Termination.

              (ii) for three years after the Executive's Date of Termination, or
        such longer period as may be provided by the terms of the appropriate
        plan, program, practice or policy, the Company shall continue benefits
        to the Executive and/or the Executive's family at least equal to those
        which would have been provided to them in accordance with the plans,
        programs, practices and policies described in Section 4(b)(iv) of this
        Agreement if the Executive's employment had not been terminated or, if
        more favorable to the Executive, as in effect generally at any time
        thereafter with respect to other peer executives of the Company and its
        affiliated companies and their families (collectively, "Welfare
        Benefits"), provided, however, that if the Executive becomes reemployed
        with another employer and is eligible to receive medical or other
        welfare benefits under another employer provided plan, the medical and
        other welfare benefits described herein shall be secondary to those
        provided under such other plan during such applicable period of
        eligibility. For purposes of determining eligibility (but not the time
        of commencement of benefits) of the Executive for retiree benefits
        pursuant to such plans, practices, programs and policies, the Executive
        shall be considered to have remained employed until three years after
        the Date of Termination and to have retired on the last day of such
        period. The Company shall continue to provide the Executive with Welfare
        Benefits at the Executive's own cost until the Executive is eligible for
        coverage under Medicare;

            (iii) the Company shall, at a maximum cost of 10% of the Executive's
        Annual Base Salary, provide the Executive with outplacement services the
        scope and provider of which shall be selected by the Executive in his
        sole discretion; and

            (iv) to the extent not theretofore paid or provided, the Company
        shall timely pay or provide to the Executive any other amounts or
        benefits required to be paid or provided or which the Executive is
        eligible to receive under any plan, program, policy or practice or
        contract or agreement of the Company and its affiliated companies (such
        other amounts and benefits shall be hereinafter referred to as the
        "Other Benefits").

                (b) Death. If the Executive's employment is terminated by reason
of the Executive's death during the Employment Period, this Agreement shall
terminate without further obligations to the Executive's legal representatives
under this Agreement, other than for payment of Accrued Obligations and the
timely payment or provision of Other Benefits. Accrued Obligations shall be paid
to the Executive's estate or beneficiary, as applicable, in a lump sum in cash
within 30 days of the Date of Termination. With

                                       9
<PAGE>

respect to the provision of Other Benefits, the term Other Benefits as utilized
in this Section 6(b) shall include, without limitation, and the Executive's
estate and/or beneficiaries shall be entitled to receive, benefits at least
equal to the most favorable benefits provided by the Company and affiliated
companies to the estates and beneficiaries of peer executives of the Company and
such affiliated companies under such plans, programs, practices and policies
relating to death benefits, if any, as in effect with respect to other peer
executives and their beneficiaries at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to the
Executive's estate and/or the Executive's beneficiaries, as in effect on the
date of the Executive's death with respect to other peer executives of the
Company and its affiliated companies and their beneficiaries.

                (c) Disability. If the Executive's employment is terminated by
reason of the Executive's Disability during the Employment Period, this
Agreement shall terminate without further obligations to the Executive, other
than for payment of Accrued Obligations and the timely payment or provision of
Other Benefits. Accrued Obligations shall be paid to the Executive in a lump sum
in cash within 30 days of the Date of Termination. With respect to the provision
of Other Benefits, the term Other Benefits as utilized in this Section 6(c)
shall include, and the Executive shall be entitled after the Disability
Effective Date to receive, disability and other benefits at least equal to the
most favorable of those generally provided by the Company and its affiliated
companies to disabled executives and/or their families in accordance with such
plans, programs, practices and policies relating to disability, if any, as in
effect generally with respect to other peer executives and their families at any
time during the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executive and/or the Executive's family, as in effect at
any time thereafter generally with respect to other peer executives of the
Company and its affiliated companies and their families.

                (d) Cause; Other than for Good Reason. If the Executive's
employment shall be terminated for Cause during the Employment Period, this
Agreement shall terminate without further obligations to the Executive other
than the obligation to pay to the Executive (x) his Annual Base Salary through
the Date of Termination, (y) the amount of any compensation previously deferred
by the Executive, and (z) Other Benefits, in each case to the extent theretofore
unpaid. If the Executive voluntarily terminates employment during the Employment
Period, excluding a termination for Good Reason, this Agreement shall terminate
without further obligations to the Executive, other than for Accrued Obligations
and the timely payment or provision of Other Benefits. In such case, all Accrued
Obligations shall be paid to the Executive in a lump sum in cash within 30 days
of the Date of Termination.

                7. Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any plan,
program, policy or practice (other than those providing severance benefits)
provided by the Company or any of its affiliated companies and for which the
Executive may qualify, nor, subject to Section 12(f), shall anything herein
limit or otherwise affect such rights as the Executive may have under any
contract or agreement with the Company or any of its affiliated companies.
Amounts which are vested benefits or which the Executive is otherwise entitled
to receive under any plan, policy, practice or program of or any contract or

                                       10
<PAGE>


agreement with the Company or any of its affiliated companies at or subsequent
to the Date of Termination shall be payable in accordance with such plan,
policy, practice or program or contract or agreement except as explicitly
modified by this Agreement.

                8. Full Settlement. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement and such amounts
shall not be reduced whether or not the Executive obtains other employment. The
Company agrees to pay as incurred, to the full extent permitted by law, all
legal fees and expenses which the Executive may incur as a result of any contest
(regardless of the outcome thereof) by the Company, the Executive or others of
the validity or enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including as a result of any
contest by the Executive about the amount of any payment pursuant to this
Agreement), plus in each case interest on any delayed payment at the applicable
Federal rate provided for in Section 7872(f)(2)(A) of the Internal Revenue Code
of 1986, as amended (the "Code"). If however, following the conclusion of such
contest, the court before whom such contest was held determines that under the
circumstances it was unjust for the Company to have paid all or any part of the
legal fees and expenses of the Executive pursuant to the immediately preceding
sentence, the Executive shall repay any such payments to the Company in
accordance with the order of the court.

                9.  Certain Additional Payments by the Company.

                (a) Anything in this Agreement to the contrary notwithstanding
and except as set forth below, in the event it shall be determined that any
payment or distribution by the Company or its affiliates to or for the benefit
of the Executive (whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise, but determined without
regard to any additional payments required under this Section 9) (a "Payment")
would be subject to the excise tax imposed by Section 4999 of the Code or any
interest or penalties are incurred by the Executive with respect to such excise
tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), then the Executive
shall be entitled to receive an additional payment (a "Gross-Up Payment") in an
amount such that after payment by the Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with
respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Payments. Notwithstanding the foregoing provisions of this Section 9(a), if
it shall be determined that the Executive is entitled to a Gross-Up Payment, but
that the Payments do not exceed 110% of the greatest amount (the "Reduced
Amount") that could be paid to the Executive such that the receipt of Payments
would not give rise to any Excise Tax, then no Gross-Up Payment shall be made to
the Executive and the Payments, in the aggregate, shall be reduced to the
Reduced Amount.

                                       11
<PAGE>

                (b) Subject to the provisions of Section 9(c), all
determinations required to be made under this Section 9, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by Ernst & Young LLP or such other certified public accounting firm as may be
designated by the Executive (the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and the Executive within 15 business
days of the receipt of notice from the Executive that there has been a Payment,
or such earlier time as is requested by the Company. In the event that the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group effecting the Change of Control, the Executive shall appoint another
nationally recognized accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Any Gross-Up Payment, as determined pursuant to this
Section 9, shall be paid by the Company to the Executive within five days of the
receipt of the Accounting Firm's determination. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive. As a result
of the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 9(c) and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.

                (c) The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification shall be given
as soon as practicable but no later than ten business days after the Executive
is informed in writing of such claim and shall apprise the Company of the nature
of such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which it gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due). If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive
shall:

             (i) give the Company any information reasonably requested by the
         Company relating to such claim,

            (ii) take such action in connection with contesting such claim as
         the Company shall reasonably request in writing from time to time,
         including, without limitation, accepting legal representation with
         respect to such claim by an attorney reasonably selected by the
         Company,

           (iii) cooperate with the Company in good faith in order effectively
         to contest such claim, and

                                       12
<PAGE>

            (iv) permit the Company to participate in any proceedings relating
         to such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 9(c), the Company shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
the Executive to pay the tax claimed and sue for a refund or contest the claim
in any permissible manner, and the Executive agrees to prosecute such contest to
a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.

                (d) If, after the receipt by the Executive of an amount advanced
by the Company pursuant to Section 9(c), the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall (subject to
the Company's complying with the requirements of Section 9(c)) promptly pay to
the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to Section 9(c), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.

                10. Confidential Information. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all information, knowledge or
data relating to the Company or any of its affiliated companies, and their
respective businesses, which shall have been obtained by the Executive during
the Executive's employment by the Company or any of its affiliated companies and
which shall have been identified and held by the Company as proprietary and
confidential and which shall not be or become

                                       13
<PAGE>

public knowledge (other than by acts by the Executive or representatives of the
Executive in violation of this Agreement). After termination of the Executive's
employment with the Company, the Executive shall not, without the prior written
consent of the Company or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to anyone other
than the Company and those designated by it. In no event shall an asserted
violation of the provisions of this Section 10 constitute a basis for deferring
or withholding any amounts otherwise payable to the Executive under this
Agreement.

                11. Successors. (a) This Agreement is personal to the Executive
and without the prior written consent of the Company shall not be assignable by
the Executive otherwise than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.

                (b) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.

                (c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. The Company agrees that it will not effect the sale or other
disposition of all or substantially all of its assets unless either (1) the
person or entity acquiring the assets or a substantial portion of the assets
shall expressly assume by an instrument in writing all duties and obligations of
the Company under this Agreement or (2) the Company shall provide through the
establishment of a separate reserve for the payment in full of all amounts that
are or may be reasonably expected to become payable to the Executive under this
Agreement. As used in this Agreement, "Company" shall mean the Company as herein
before defined and any successor to its business and/or assets as aforesaid
which assumes and agrees to perform this Agreement by operation of law, or
otherwise.

                12. Miscellaneous. (a) This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois, without
reference to principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.

                (b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:


                If to the Executive:

                                       14
<PAGE>



                If to the Company:


                             GATX CORPORATION
                             500 West Monroe
                             Chicago, IL 60661-3676

                             Attention:  Vice-President, Human Resources


or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

                (c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.

                (d) The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.

                (e) The Executive's or the Company's failure to insist upon
strict compliance with any provision of this Agreement or the failure to assert
any right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good Reason
pursuant to Section 5(c)(i)-(v) of this Agreement, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement.

                (f) This Agreement supercedes and replaces the Agreement between
the Executive and the Company dated January 1, 2001.

                (g) The Executive and the Company acknowledge that, except as
may otherwise be provided under any other written agreement between the
Executive and the Company, the employment of the Executive by the Company is "at
will" and, subject to Section 1(a) hereof, prior to the Effective Date, the
Executive's employment and/or this Agreement may be terminated by either the
Executive or the Company at any time prior to the Effective Date, in which case
the Executive shall have no further rights under this Agreement. From and after
the Effective Date this Agreement shall supersede any other agreement between
the parties with respect to the subject matter hereof.

                IN WITNESS WHEREOF, the Executive has hereunto set the
Executive's hand and, pursuant to the authorization from its Board of Directors,
the Company has caused these presents to be executed in its name on its behalf,
all as of the day and year first above written.

                                       15
<PAGE>






- --------------------------
       Executive



                                              GATX CORPORATION



                                               By
                                                  ------------------------------
                                                    Its Chairman of the Board


                                                  ------------------------------
                                                          Execution Date


                                       16

<PAGE>

             AGREEMENT FOR EMPLOYMENT FOLLOWING A CHANGE OF CONTROL



                AGREEMENT by and between GATX Corporation, a New York
corporation (the "Company") and _____________(the "Executive") dated as of the
first day of January 2001.

                The Board of Directors of the Company (the "Board"), has
determined that it is in the best interests of the Company and its shareholders
to assure that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined below). The Board believes it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control and to encourage the
Executive's full attention and dedication to the Company currently and in the
event of any threatened or pending Change of Control, and to provide the
Executive with compensation and benefits arrangements upon a Change of Control
which ensure that the compensation and benefits expectations of the Executive
will be satisfied and which are competitive with those of other corporations.
Therefore, in order to accomplish these objectives, the Board has caused the
Company to enter into this Agreement.

                NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

                1. Certain Definitions. (a) The "Effective Date" shall mean the
first date during the Change of Control Period (as defined in Section 1(b)) on
which a Change of Control (as defined in Section 2) occurs. Anything in this
Agreement to the contrary notwithstanding, if a Change of Control occurs, and if
the Executive's employment with the Company is terminated prior to the date on
which the Change of Control occurs, and if it is reasonably demonstrated by the
Executive that such termination of employment (i) was at the request of a third
party who has taken steps reasonably calculated to effect a Change of Control or
(ii) otherwise arose in connection with or anticipation of a Change of Control,
then for all purposes of this Agreement the "Effective Date" shall mean the date
immediately prior to the date of such termination of employment.

                (b) The "Change of Control Period" shall mean the period
commencing on the date hereof and ending on the third anniversary of the date
hereof; provided, however, that commencing on the date one year after the date
hereof, and on each annual anniversary of such date (such date and each annual
anniversary thereof shall be hereinafter referred to as the "Renewal Date"),
unless previously terminated, the Change of Control Period shall be
automatically extended so as to terminate three years from such Renewal Date,
unless at least 60 days prior to the Renewal Date the Company shall give notice
to the Executive that the Change of Control Period shall not be so extended.

                2. Change of Control. For the purpose of this Agreement, a
"Change of Control" shall mean:

                (a) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or
more of either (i) the then outstanding shares of common stock of the Company
(the "Outstanding Company Common Stock") or



<PAGE>

(ii) the combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); provided, however, that for purposes
of this subsection (a), the following acquisitions shall not constitute a Change
of Control: (1) any acquisition directly from the Company, (2) any acquisition
by the Company, (3) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation controlled by
the Company or (4) any acquisition by any corporation pursuant to a transaction
which complies with clauses (1), (2) and (3) of subsection (c) of this Section
2; or

                (b) Individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or

                (c) Consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of the
Company (a "Business Combination"), in each case, unless, following such
Business Combination, (i) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities immediately prior
to such Business Combination beneficially own, directly or indirectly, more than
65% of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be, (ii) no
Person (excluding any corporation resulting from such Business Combination or
any employee benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to the
Business Combination and (iii) at least a majority of the members of the board
of directors of the corporation resulting from such Business Combination were
members of the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or

                (d) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company; or

                (e) Consummation of a Business Combination involving any
subsidiary of the




                                       2
<PAGE>

Company (a "Company Unit") that is the primary employer of the Executive
immediately prior to such Business Combination unless immediately after such
Business Combination the Company owns at least 50% of the voting stock of such
Company Unit.

                3. Employment Period. The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in the employ
of the Company subject to the terms and conditions of this Agreement, for the
period commencing on the Effective Date and ending on the second anniversary of
such date (the "Employment Period").

                4. Terms of Employment. (a) Position and Duties. (i) During the
Employment Period, (A) the Executive's position (including status, offices,
titles and reporting requirements), authority, duties and responsibilities shall
be at least commensurate in all material respects with the most significant of
those held, exercised and assigned by or to the Executive at any time during the
120-day period immediately preceding the Effective Date and (B) the Executive's
services shall be performed at the location where the Executive was employed
immediately preceding the Effective Date or any office or location less than 35
miles from such location.

                         (ii) During the Employment Period, and excluding any
periods of vacation and sick leave to which the Executive is entitled, the
Executive agrees to devote reasonable attention and time during normal business
hours to the business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder, to use the
Executive's reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a violation of
this Agreement for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (C) manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Executive's responsibilities as an employee of the Company in accordance with
this Agreement. It is expressly understood and agreed that to the extent that
any such activities have been conducted by the Executive prior to the Effective
Date, the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the Executive's
responsibilities to the Company.

                (b) Compensation. (i) Base Salary. During the Employment Period,
the Executive shall receive an annual base salary ("Annual Base Salary"), which
shall be paid at a monthly rate, at least equal to twelve times the highest
monthly base salary paid or payable, including any base salary which has been
earned but deferred, to the Executive by the Company and its affiliated
companies during the twelve-month period immediately preceding the month in
which the Effective Date occurs. During the Employment Period, the Annual Base
Salary shall be reviewed no more than 12 months after the last salary increase
awarded to the Executive prior to the Effective Date and thereafter at least
annually. Any increase in Annual Base Salary shall not serve to limit or reduce
any other obligation to the Executive under this Agreement. Annual Base Salary
shall not be reduced after any such increase and the term Annual Base Salary as
utilized in this Agreement shall refer to Annual Base Salary as so increased. As
used in this Agreement, the term "affiliated companies" shall include any
company controlled by, controlling or under common control with the Company.




                                       3
<PAGE>

                         (ii) Annual Bonus. In addition to Annual Base Salary,
the Executive shall be awarded, for each fiscal year ending during the
Employment Period, an annual bonus (the "Annual Bonus") in cash at least equal
to the highest bonus earned by the Executive for the last two full fiscal years
prior to the Effective Date (annualized in the event that the Executive was not
employed by the Company for the whole of such fiscal year). Each such Annual
Bonus shall be paid no later than the end of the third month of the fiscal year
next following the fiscal year for which the Annual Bonus is awarded, unless the
Executive shall elect to defer the receipt of such Annual Bonus.

                         (iii) Long-Term Incentive, Savings and Retirement
Plans. During the Employment Period, the Executive shall be entitled to
participate in all long-term incentive, stock option, savings and retirement
plans, practices, policies and programs applicable generally to other peer
executives of the Company and its affiliated companies, but in no event shall
such plans, practices, policies and programs provide the Executive with
long-term incentive opportunities (measured with respect to both regular and
special incentive opportunities, to the extent, if any, that such distinction is
applicable), stock option opportunities, savings opportunities and retirement
benefit opportunities, in each case, less favorable, in the aggregate, than the
most favorable of those provided by the Company and its affiliated companies for
the Executive under such plans, practices, policies and programs as in effect at
any time during the 120-day period immediately preceding the Effective Date or
if more favorable to the Executive, those provided generally at any time after
the Effective Date to other peer executives of the Company and its affiliated
companies.

                         (iv) Welfare Benefit Plans. During the Employment
Period, the Executive and/or the Executive's family, as the case may be, shall
be eligible for participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the Company and its
affiliated companies (including, without limitation, medical, prescription,
dental, disability, employee life, group life, accidental death and travel
accident insurance plans and programs) to the extent applicable generally to
other peer executives of the Company and its affiliated companies, but in no
event shall such plans, practices, policies and programs provide the Executive
with benefits which are less favorable, in the aggregate, than the most
favorable of such plans, practices, policies and programs in effect for the
Executive at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive, those provided generally
at any time after the Effective Date to other peer executives of the Company and
its affiliated companies.

                         (v) Expenses. During the Employment Period, the
Executive shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Executive in accordance with the most favorable
policies, practices and procedures of the Company and its affiliated companies
in effect for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as in
effect generally at any time thereafter with respect to other peer executives of
the Company and its affiliated companies.

                         (vi) Fringe Benefits. During the Employment Period, the
Executive shall be entitled to fringe benefits, including, without limitation,
tax and financial planning services, payment of club dues, and, if applicable,
use of an automobile and payment of




                                       4
<PAGE>

related expenses, or payment of an automobile allowance in accordance with the
most favorable plans, practices, programs and policies of the Company and its
affiliated companies in effect for the Executive at any time during the 120-day
period immediately preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to other
peer executives of the Company and its affiliated companies.

                         (vii) Office and Support Staff. During the Employment
Period, the Executive shall be entitled to an office or offices of a size and
with furnishings and other appointments, and to exclusive personal secretarial
and other assistance, at least equal to the most favorable of the foregoing
provided to the Executive by the Company and its affiliated companies at any
time during the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executive, as provided generally at any time thereafter
with respect to other peer executives of the Company and its affiliated
companies.

                         (viii) Vacation. During the Employment Period, the
Executive shall be entitled to paid vacation in accordance with the most
favorable plans, policies, programs and practices of the Company and its
affiliated companies as in effect for the Executive at any time during the
120-day period immediately preceding the Effective Date or, if more favorable to
the Executive, as in effect generally at any time thereafter with respect to
other peer executives of the Company and its affiliated companies.

                5. Termination of Employment. (a) Death or Disability. The
Executive's employment shall terminate automatically upon the Executive's death
during the Employment Period. If Disability of the Executive has occurred during
the Employment Period (pursuant to the definition of Disability set forth
below), the Company may give to the Executive written notice in accordance with
Section 12(b) of this Agreement of its intention to terminate the Executive's
employment no sooner than 30 days following such notice. In such event, the
Executive's employment with the Company shall terminate effective on the date
specified in such notice (the "Disability Effective Date"), provided that the
Executive shall not have returned to full-time performance of the Executive's
duties prior thereto. For purposes of this Agreement, "Disability" shall mean
any disability that (a) entitles the Executive to disability income benefits
under the GATX Long Term Disability Income Plan as in effect on the day prior to
the Effective Date, and (b) prevents the executive, for the duration of the
Employment Period, from engaging in the same or comparable type of employment as
that in which the Executive was engaged on the day prior to the Effective Date.

                (b) Cause. The Company may terminate the Executive's employment
during the Employment Period only for Cause. For purposes of this Agreement,
"Cause" shall mean:

                (i) the willful and continued failure of the Executive to
        perform substantially the Executive's duties with the Company or one of
        its affiliates (other than any such failure resulting from incapacity
        due to physical or mental illness), after a written demand for
        substantial performance is delivered to the Executive by the Board or
        the Chief Executive Officer of the Company which specifically identifies
        the manner in which the Board or Chief Executive Officer believes that
        the Executive has not substantially performed the Executive's duties, or



                                       5
<PAGE>

                (ii) the willful engaging by the Executive in illegal conduct or
        gross misconduct which is materially and demonstrably injurious to the
        Company.

For purposes of this provision, no act or failure to act, on the part of the
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by the Executive in bad faith or without reasonable belief that the
Executive's action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a resolution duly
adopted by the Board or upon the instructions or concurrence of the Chief
Executive Officer or a senior officer of the Company or based upon the advice of
counsel for the Company shall be conclusively presumed to be done, or omitted to
be done, by the Executive in good faith and in the best interests of the
Company. The cessation of employment of the Executive shall not be deemed to be
for Cause unless and until there shall have been delivered to the Executive a
copy of a resolution duly adopted by the affirmative vote of not less than
three-quarters of the entire membership of the Board at a meeting of the Board
called and held for such purpose (after reasonable notice is provided to the
Executive and the Executive is given an opportunity, together with counsel, to
be heard before the Board), finding that, in the good faith opinion of the
Board, the Executive is guilty of the conduct described in subparagraph (i) or
(ii) above, and specifying the particulars thereof in detail.

                (c) Good Reason. The Executive's employment may be terminated by
the Executive for Good Reason. For purposes of this Agreement, "Good Reason"
shall mean:

                (i) the assignment to the Executive of any duties inconsistent
        in any respect with the Executive's position (including status, offices,
        titles and reporting requirements), authority, duties or
        responsibilities as contemplated by Section 4(a) of this Agreement, or
        any other action by the Company which results in a diminution in such
        position, authority, duties or responsibilities, excluding for this
        purpose an isolated, insubstantial and inadvertent action not taken in
        bad faith and which is remedied by the Company promptly after receipt of
        notice thereof given by the Executive;

                (ii) any failure by the Company to comply with any of the
        provisions of Section 4(b) of this Agreement, other than an isolated,
        insubstantial and inadvertent failure not occurring in bad faith and
        which is remedied by the Company promptly after receipt of notice
        thereof given by the Executive;

                (iii) the Company's requiring the Executive to be based at any
        office or location other than as provided in Section 4(a)(i)(B) hereof
        or the Company's requiring the Executive to travel on Company business
        to a substantially greater extent than required immediately prior to the
        Effective Date;

                (iv) any purported termination by the Company of the Executive's
        employment otherwise than as expressly permitted by this Agreement; or

                (v) any failure by the Company to comply with and satisfy
        Section 11(c) of this Agreement.



                                       6
<PAGE>

For purposes of this Section 5(c), any good faith determination of "Good Reason"
made by the Executive shall be conclusive.

                (d) Notice of Termination. Any termination by the Company for
Cause, or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 12(b) of
this Agreement. For purposes of this Agreement, a "Notice of Termination" means
a written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive's employment under the provision so indicated and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than thirty
days after the giving of such notice). The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
the Executive or the Company, respectively, hereunder or preclude the Executive
or the Company, respectively, from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.

                (e) Date of Termination. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be, (ii) if the Executive's
employment is terminated by the Company other than for Cause or Disability, the
Date of Termination shall be the date on which the Company notifies the
Executive of such termination and (iii) if the Executive's employment is
terminated by reason of death or Disability, the Date of Termination shall be
the date of death of the Executive or the Disability Effective Date, as the case
may be.

                6. Obligations of the Company upon Termination. (a) Good Reason;
Other Than for Cause, Death or Disability. If, during the Employment Period, the
Company shall terminate the Executive's employment other than for Cause or
Disability or the Executive shall terminate employment for Good Reason:

            (i) The Company shall pay to the Executive in a lump sum in cash
        within 30 days after the Date of Termination the aggregate of the
        following amounts:

                         A. the sum of (1) the Executive's Annual Base Salary
                through the Date of Termination to the extent not theretofore
                paid, (2) the product of (x) the Executive's Annual Bonus as
                defined in Section 4(b)(ii) of the Agreement (annualized for any
                fiscal year consisting of less than twelve full months or during
                which the Executive was employed for less than twelve full
                months) and (y) a fraction, the numerator of which is the number
                of days in the current fiscal year through the Date of
                Termination, and the denominator of which is 365 and (3) any
                compensation previously deferred by the Executive (together with
                any accrued interest or earnings thereon) and any accrued
                vacation pay, in each case to the extent not theretofore paid
                (the sum of the amounts described in clauses (1), (2), and (3)
                shall be hereinafter referred to as the "Accrued Obligations");
                and

                         B. the amount equal to the product of (1) two and (2)
                the sum of (x) the




                                       7
<PAGE>

                Executive's Annual Base Salary and (y) the Executive's target
                bonus under the Company's Management Incentive Plan, or any
                comparable bonus plan in which the Executive participates and
                which has a target bonus generally similar to that in the
                Company's Management Incentive Plan (the "Target Bonus"), less
                amounts, if any, paid to the Executive in accordance with the
                Company's severance pay policies; and

                         C. an amount equal to the excess of (a) the actuarial
                equivalent of the benefit under the Company's qualified defined
                benefit retirement plan (the "Retirement Plan") (utilizing
                actuarial assumptions no less favorable to the Executive than
                those in effect under the Company's Retirement Plan immediately
                prior to the Effective Date), and any excess or supplemental
                retirement plan in which the Executive participates (together,
                the "SERP") which the Executive would receive if the Executive's
                employment continued for two years after the Date of Termination
                assuming for this purpose that all accrued benefits are fully
                vested, and, assuming that the Executive's compensation in each
                of the two years is equal to the Annual Base Salary as required
                by Section 4(b)(i) and plus the Executive's Target Bonus as
                described in Section 6(i)(B) for the most recent fiscal year (or
                other bonus amount considered pensionable under the Retirement
                Plan), over (b) the actuarial equivalent of the Executive's
                actual benefit (paid or payable), if any, under the Retirement
                Plan and the SERP as of the Date of Termination;

            (ii) for two years after the Executive's Date of Termination, or
        such longer period as may be provided by the terms of the appropriate
        plan, program, practice or policy, the Company shall continue benefits
        to the Executive and/or the Executive's family at least equal to those
        which would have been provided to them in accordance with the plans,
        programs, practices and policies described in Section 4(b)(iv) of this
        Agreement if the Executive's employment had not been terminated or, if
        more favorable to the Executive, as in effect generally at any time
        thereafter with respect to other peer executives of the Company and its
        affiliated companies and their families (collectively, "Welfare
        Benefits"), provided, however, that if the Executive becomes reemployed
        with another employer and is eligible to receive medical or other
        welfare benefits under another employer provided plan, the medical and
        other welfare benefits described herein shall be secondary to those
        provided under such other plan during such applicable period of
        eligibility. For purposes of determining eligibility (but not the time
        of commencement of benefits) of the Executive for retiree benefits
        pursuant to such plans, practices, programs and policies, the Executive
        shall be considered to have remained employed until two years after the
        Date of Termination and to have retired on the last day of such period.
        The Company shall continue to provide the Executive with Welfare
        Benefits at the Executive's own cost until the Executive is eligible for
        coverage under Medicare;

            (iii) the Company shall, at a maximum cost of 10% of the Executive's
        Annual Base Salary, provide the Executive with outplacement services the
        scope and provider of which shall be selected by the Executive in his
        sole discretion; and

            (iv) to the extent not theretofore paid or provided, the Company
        shall timely pay or provide to the Executive any other amounts or
        benefits required to be paid or provided




                                       8
<PAGE>

        or which the Executive is eligible to receive under any plan, program,
        policy or practice or contract or agreement of the Company and its
        affiliated companies (such other amounts and benefits shall be
        hereinafter referred to as the "Other Benefits").

                (b) Death. If the Executive's employment is terminated by reason
of the Executive's death during the Employment Period, this Agreement shall
terminate without further obligations to the Executive's legal representatives
under this Agreement, other than for payment of Accrued Obligations and the
timely payment or provision of Other Benefits. Accrued Obligations shall be paid
to the Executive's estate or beneficiary, as applicable, in a lump sum in cash
within 30 days of the Date of Termination. With respect to the provision of
Other Benefits, the term Other Benefits as utilized in this Section 6(b) shall
include, without limitation, and the Executive's estate and/or beneficiaries
shall be entitled to receive, benefits at least equal to the most favorable
benefits provided by the Company and affiliated companies to the estates and
beneficiaries of peer executives of the Company and such affiliated companies
under such plans, programs, practices and policies relating to death benefits,
if any, as in effect with respect to other peer executives and their
beneficiaries at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Executive's estate and/or the
Executive's beneficiaries, as in effect on the date of the Executive's death
with respect to other peer executives of the Company and its affiliated
companies and their beneficiaries.

                (c) Disability. If the Executive's employment is terminated by
reason of the Executive's Disability during the Employment Period, this
Agreement shall terminate without further obligations to the Executive, other
than for payment of Accrued Obligations and the timely payment or provision of
Other Benefits. Accrued Obligations shall be paid to the Executive in a lump sum
in cash within 30 days of the Date of Termination. With respect to the provision
of Other Benefits, the term Other Benefits as utilized in this Section 6(c)
shall include, and the Executive shall be entitled after the Disability
Effective Date to receive, disability and other benefits at least equal to the
most favorable of those generally provided by the Company and its affiliated
companies to disabled executives and/or their families in accordance with such
plans, programs, practices and policies relating to disability, if any, as in
effect generally with respect to other peer executives and their families at any
time during the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executive and/or the Executive's family, as in effect at
any time thereafter generally with respect to other peer executives of the
Company and its affiliated companies and their families.

                (d) Cause; Other than for Good Reason. If the Executive's
employment shall be terminated for Cause during the Employment Period, this
Agreement shall terminate without further obligations to the Executive other
than the obligation to pay to the Executive (x) his Annual Base Salary through
the Date of Termination, (y) the amount of any compensation previously deferred
by the Executive, and (z) Other Benefits, in each case to the extent theretofore
unpaid. If the Executive voluntarily terminates employment during the Employment
Period, excluding a termination for Good Reason, this Agreement shall terminate
without further obligations to the Executive, other than for Accrued Obligations
and the timely payment or provision of Other Benefits. In such case, all Accrued
Obligations shall be paid to the Executive in a lump sum in cash within 30 days
of the Date of Termination.



                                       9
<PAGE>

                7. Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any plan,
program, policy or practice (other than those providing severance benefits)
provided by the Company or any of its affiliated companies and for which the
Executive may qualify, nor, subject to Section 12(f), shall anything herein
limit or otherwise affect such rights as the Executive may have under any
contract or agreement with the Company or any of its affiliated companies.
Amounts which are vested benefits or which the Executive is otherwise entitled
to receive under any plan, policy, practice or program of or any contract or
agreement with the Company or any of its affiliated companies at or subsequent
to the Date of Termination shall be payable in accordance with such plan,
policy, practice or program or contract or agreement except as explicitly
modified by this Agreement.

                8. Full Settlement. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement and such amounts
shall not be reduced whether or not the Executive obtains other employment. The
Company agrees to pay as incurred, to the full extent permitted by law, all
legal fees and expenses which the Executive may incur as a result of any contest
(regardless of the outcome thereof) by the Company, the Executive or others of
the validity or enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including as a result of any
contest by the Executive about the amount of any payment pursuant to this
Agreement), plus in each case interest on any delayed payment at the applicable
Federal rate provided for in Section 7872(f)(2)(A) of the Internal Revenue Code
of 1986, as amended (the "Code"). If however, following the conclusion of such
contest, the court before whom such contest was held determines that under the
circumstances it was unjust for the Company to have paid all or any part of the
legal fees and expenses of the Executive pursuant to the immediately preceding
sentence, the Executive shall repay any such payments to the Company in
accordance with the order of the court.

                9.  Certain Additional Payments by the Company.

                (a) Anything in this Agreement to the contrary notwithstanding
and except as set forth below, in the event it shall be determined that any
payment or distribution by the Company or its affiliates to or for the benefit
of the Executive (whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise, but determined without
regard to any additional payments required under this Section 9) (a "Payment")
would be subject to the excise tax imposed by Section 4999 of the Code or any
interest or penalties are incurred by the Executive with respect to such excise
tax (such excise tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), then the Executive
shall be entitled to receive an additional payment (a "Gross-Up Payment") in an
amount such that after payment by the Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with
respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Payments. Notwithstanding the foregoing provisions of this Section 9(a), if
it shall be determined that the Executive is





                                       10
<PAGE>

entitled to a Gross-Up Payment, but that the Payments do not exceed 110% of the
greatest amount (the "Reduced Amount") that could be paid to the Executive such
that the receipt of Payments would not give rise to any Excise Tax, then no
Gross-Up Payment shall be made to the Executive and the Payments, in the
aggregate, shall be reduced to the Reduced Amount.

                (b) Subject to the provisions of Section 9(c), all
determinations required to be made under this Section 9, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by Ernst & Young LLP or such other certified public accounting firm as may be
designated by the Executive (the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and the Executive within 15 business
days of the receipt of notice from the Executive that there has been a Payment,
or such earlier time as is requested by the Company. In the event that the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group effecting the Change of Control, the Executive shall appoint another
nationally recognized accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Any Gross-Up Payment, as determined pursuant to this
Section 9, shall be paid by the Company to the Executive within five days of the
receipt of the Accounting Firm's determination. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive. As a result
of the uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 9(c) and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Executive.

                (c) The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification shall be given
as soon as practicable but no later than ten business days after the Executive
is informed in writing of such claim and shall apprise the Company of the nature
of such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which it gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due). If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive
shall:

            (i) give the Company any information reasonably requested by the
        Company relating to such claim,

            (ii) take such action in connection with contesting such claim as
        the Company shall reasonably request in writing from time to time,
        including, without limitation, accepting legal representation with
        respect to such claim by an attorney reasonably selected by the Company,



                                       11
<PAGE>

            (iii) cooperate with the Company in good faith in order effectively
        to contest such claim, and

            (iv) permit the Company to participate in any proceedings relating
        to such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section 9(c), the Company shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
the Executive to pay the tax claimed and sue for a refund or contest the claim
in any permissible manner, and the Executive agrees to prosecute such contest to
a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and sue for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.

                (d) If, after the receipt by the Executive of an amount advanced
by the Company pursuant to Section 9(c), the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall (subject to
the Company's complying with the requirements of Section 9(c)) promptly pay to
the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to Section 9(c), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.

                10. Confidential Information. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all information, knowledge or
data relating to the Company or any of its affiliated companies, and their
respective businesses, which shall have been obtained by the Executive during
the Executive's employment by the Company or any of its affiliated companies and
which shall have been identified and held by the Company as proprietary and
confidential and which shall not be or become public knowledge (other than




                                       12
<PAGE>

by acts by the Executive or representatives of the Executive in violation of
this Agreement). After termination of the Executive's employment with the
Company, the Executive shall not, without the prior written consent of the
Company or as may otherwise be required by law or legal process, communicate or
divulge any such information, knowledge or data to anyone other than the Company
and those designated by it. In no event shall an asserted violation of the
provisions of this Section 10 constitute a basis for deferring or withholding
any amounts otherwise payable to the Executive under this Agreement.

                11. Successors. (a) This Agreement is personal to the Executive
and without the prior written consent of the Company shall not be assignable by
the Executive otherwise than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.

                (b) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.

                (c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. The Company agrees that it will not effect the sale or other
disposition of all or substantially all of its assets unless either (1) the
person or entity acquiring the assets or a substantial portion of the assets
shall expressly assume by an instrument in writing all duties and obligations of
the Company under this Agreement or (2) the Company shall provide through the
establishment of a separate reserve for the payment in full of all amounts that
are or may be reasonably expected to become payable to the Executive under this
Agreement. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.

                12. Miscellaneous. (a) This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois, without
reference to principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.



                                       13
<PAGE>

                (b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:


                If to the Executive:


                If to the Company:

                                     GATX CORPORATION
                                     500 West Monroe
                                     Chicago, IL 60661-3676

                                     Attention:  Vice-President, Human Resources


or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

                (c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.

                (d) The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required to be
withheld pursuant to any applicable law or regulation.

                (e) The Executive's or the Company's failure to insist upon
strict compliance with any provision of this Agreement or the failure to assert
any right the Executive or the Company may have hereunder, including, without
limitation, the right of the Executive to terminate employment for Good Reason
pursuant to Section 5(c)(i)-(v) of this Agreement, shall not be deemed to be a
waiver of such provision or right or any other provision or right of this
Agreement.

                (f) The Executive and the Company acknowledge that, except as
may otherwise be provided under any other written agreement between the
Executive and the Company, the employment of the Executive by the Company is "at
will" and, subject to Section 1(a) hereof, prior to the Effective Date, the
Executive's employment and/or this Agreement may be terminated by either the
Executive or the Company at any time prior to the Effective Date, in which case
the Executive shall have no further rights under this Agreement. From and after
the Effective Date this Agreement shall supersede any other agreement between
the parties with respect to the subject matter hereof.


<PAGE>


                IN WITNESS WHEREOF, the Executive has hereunto set the
Executive's hand and, pursuant to the authorization from its Board of Directors,
the Company has caused these presents to be executed in its name on its behalf,
all as of the day and year first above written.


                                                 -------------------------------
                                                           Executive



                                                 GATX CORPORATION



                                                 By
                                                   -----------------------------
                                                    Its Chairman of the Board




                                                   -----------------------------
                                                           Execution Date





                                       15

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12
<SEQUENCE>5
<FILENAME>c67993ex12.txt
<DESCRIPTION>STATEMENT RE: COMPUTATION OF RATIOS OF EARNINGS
<TEXT>
<PAGE>

                                                                      EXHIBIT 12

                       GATX CORPORATION AND SUBSIDIARIES

          COMPUTATION OF RATIOS OF EARNINGS TO COMBINED FIXED CHARGES
                         AND PREFERRED STOCK DIVIDENDS

<Table>
<Caption>
                                                                YEAR ENDED DECEMBER 31
                                                              --------------------------
                                                               2001       2000     1999
                                                              ------     ------   ------
                                                              IN MILLIONS, EXCEPT RATIOS
<S>                                                           <C>        <C>      <C>
Earnings available for fixed charges:
  Income from continuing operations.........................  $  7.5     $ 30.8   $126.3
Add (deduct):
  Income tax (benefit) provision............................    (1.9)      22.7     82.8
  Share of affiliates' earnings, net of distributions
     received...............................................   (22.5)     (43.2)   (41.7)
  Interest on indebtedness and amortization of debt discount
     and expense............................................   249.9      242.6    179.9
  Portion of operating lease expense representative of
     interest factor (deemed to be one-third)...............    64.9       59.6     51.0
                                                              ------     ------   ------
Total earnings available for fixed charges..................  $297.9     $312.5   $398.3
                                                              ------     ------   ------
Preferred stock dividends...................................  $   .1     $   .1   $   .1
Ratio to convert preferred dividends to pre-tax basis.......      75%       174%     166%
                                                              ------     ------   ------
Preferred dividends on pre-tax basis........................      .1         .2       .2
Fixed charges:
  Interest on indebtedness and amortization of debt discount
     and expense............................................   249.9      242.6    179.9
  Capitalized interest......................................    14.4       10.4      4.3
  Portion of operating lease expense representative of
     interest factor (deemed to be one-third)...............    64.9       59.6     51.0
                                                              ------     ------   ------
Combined fixed charges and preferred stock dividends........  $329.3     $312.8   $235.4
                                                              ------     ------   ------
Ratio of earnings to combined fixed charges and preferred
  stock dividends(A)........................................    .90x(B)   1.00x    1.69x
</Table>

- ---------------

(A) The ratio of earnings to fixed charges represents the number of times "fixed
    charges" are covered by "earnings." "Fixed charges" consist of interest on
    outstanding debt and amortization of debt discount and expense, adjusted for
    capitalized interest and one-third (the proportion deemed representative of
    the interest factor) of operating lease expense. "Earnings" consist of
    consolidated net income before income taxes and fixed charges, less share of
    affiliates' earnings, net of distributions received.

(B) For the year ended December 31, 2001, fixed charges and preferred stock
    dividends exceeded earnings by $31.4 million.

                                        77

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>6
<FILENAME>c67993ex21.txt
<DESCRIPTION>SUBSIDIARIES
<TEXT>
<PAGE>

                                                                      EXHIBIT 21

                         SUBSIDIARIES OF THE REGISTRANT

     The following is a list of subsidiaries included in GATX's consolidated
financial statements (excluding a number of subsidiaries which, considered in
the aggregate, would not constitute a significant subsidiary), and the state or
country of incorporation for each:

GATX Financial Corporation (Delaware) -- includes 59 domestic subsidiaries, 38
foreign subsidiaries and interests in 35 domestic affiliates and 58 foreign
affiliates.

American Steamship Company (New York) -- 14 domestic subsidiaries.

Integrated Solutions Group

     GATX Terminals Holding Corporation (Delaware) -- 3 foreign subsidiaries and
four foreign affiliates.

     GATX Chemical Logistics, Inc. (Delaware)

     GATX Rail Logistics, Inc. (Delaware)

     Bonilog, S.A. (Brazil) -- 1 foreign affiliate.

                                        78

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23
<SEQUENCE>7
<FILENAME>c67993ex23.txt
<DESCRIPTION>CONSENT OF INDEPENDENT AUDITORS
<TEXT>
<PAGE>

                                                                      EXHIBIT 23

                        CONSENT OF INDEPENDENT AUDITORS

     We consent to the incorporation by reference in the following: (i)
Registration Statement No. 2-92404 on Form S-8, filed July 26, 1984; (ii)
Registration Statement No. 2-96593 on Form S-8, filed March 22, 1985; (iii)
Registration Statement No. 33-38790 on Form S-8 filed February 1, 1991; (iv)
Registration Statement No. 33-41007 on Form S-8 filed June 7, 1991; (v)
Registration Statement No. 33-61183 on Form S-8 filed July 20, 1995; (vi)
Registration Statement No. 333-78037 on Form S-8 filed May 7, 1999; (vii)
Registration Statement No. 333-81173 on Form S-8 filed June 21, 1999, and (viii)
Registration Statement No. 333-91865 on Form S-8 filed December 1, 1999, of GATX
Corporation, of our report dated January 22, 2002 with respect to the
consolidated financial statements and schedules of GATX Corporation included in
the Annual Report on Form 10-K for the year ended December 31, 2001.

                                          ERNST & YOUNG LLP

March 20, 2002
Chicago, Illinois

                                        79

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24
<SEQUENCE>8
<FILENAME>c67993ex24.txt
<DESCRIPTION>POWERS OF ATTORNEY
<TEXT>
<PAGE>
                                POWER OF ATTORNEY


        The undersigned director of GATX Corporation, a New York corporation,
does hereby constitute and appoint Brian A. Kenney, Ronald J. Ciancio and
William M. Muckian or any of them, attorneys and agents of the undersigned, with
full power and authority to sign in such director's name, and on behalf of GATX
Corporation, the 2001 Annual Report on Form 10-K under the Securities Exchange
Act of 1934, together with any amendments thereto, hereby ratifying and
confirming all that said attorneys and agents and each of them may do by virtue
hereof.

        IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal.


                                                     /s/ Rod F. Dammeyer
                                                     ---------------------------
                                                     Rod F. Dammeyer
                                                     Director


Date:  March 21, 2002


<PAGE>


POWER OF ATTORNEY

        The undersigned director of GATX Corporation, a New York corporation,
does hereby constitute and appoint Brian A. Kenney, Ronald J. Ciancio and
William M. Muckian or any of them, attorneys and agents of the undersigned, with
full power and authority to sign in such director's name, and on behalf of GATX
Corporation, the 2001 Annual Report on Form 10-K under the Securities Exchange
Act of 1934, together with any amendments thereto, hereby ratifying and
confirming all that said attorneys and agents and each of them may do by virtue
hereof.

        IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal.


                                                     /s/ James M. Denney
                                                     ---------------------------
                                                     James M. Denney
                                                     Director


Date: March 21, 2002



<PAGE>


POWER OF ATTORNEY

        The undersigned director of GATX Corporation, a New York corporation,
does hereby constitute and appoint Brian A. Kenney, Ronald J. Ciancio and
William M. Muckian or any of them, attorneys and agents of the undersigned, with
full power and authority to sign in such director's name, and on behalf of GATX
Corporation, the 2001 Annual Report on Form 10-K under the Securities Exchange
Act of 1934, together with any amendments thereto, hereby ratifying and
confirming all that said attorneys and agents and each of them may do by virtue
hereof.

        IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal.


                                                     /s/ Richard Fairbanks
                                                     ---------------------------
                                                     Richard Fairbanks
                                                     Director



Date: March 21, 2002


<PAGE>


POWER OF ATTORNEY

        The undersigned director of GATX Corporation, a New York corporation,
does hereby constitute and appoint Brian A. Kenney, Ronald J. Ciancio and
William M. Muckian or any of them, attorneys and agents of the undersigned, with
full power and authority to sign in such director's name, and on behalf of GATX
Corporation, the 2001 Annual Report on Form 10-K under the Securities Exchange
Act of 1934, together with any amendments thereto, hereby ratifying and
confirming all that said attorneys and agents and each of them may do by virtue
hereof.

        IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal.


                                                     /s/ Deborah M. Fretz
                                                     ---------------------------
                                                     Deborah M. Fretz
                                                     Director


Date: March 21, 2002



<PAGE>


POWER OF ATTORNEY

        The undersigned director of GATX Corporation, a New York corporation,
does hereby constitute and appoint Brian A. Kenney, Ronald J. Ciancio and
William M. Muckian or any of them, attorneys and agents of the undersigned, with
full power and authority to sign in such director's name, and on behalf of GATX
Corporation, the 2001 Annual Report on Form 10-K under the Securities Exchange
Act of 1934, together with any amendments thereto, hereby ratifying and
confirming all that said attorneys and agents and each of them may do by virtue
hereof.

        IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal.


                                                     /s/ Miles L. March
                                                     ---------------------------
                                                     Miles L. March
                                                     Director


Date: March 21, 2002


<PAGE>


POWER OF ATTORNEY

        The undersigned director of GATX Corporation, a New York corporation,
does hereby constitute and appoint Brian A. Kenney, Ronald J. Ciancio and
William M. Muckian or any of them, attorneys and agents of the undersigned, with
full power and authority to sign in such director's name, and on behalf of GATX
Corporation, the 2001 Annual Report on Form 10-K under the Securities Exchange
Act of 1934, together with any amendments thereto, hereby ratifying and
confirming all that said attorneys and agents and each of them may do by virtue
hereof.

        IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal.


                                                     /s/ Michael E. Murphy
                                                     ---------------------------
                                                     Michael E. Murphy
                                                     Director


Date: March 21, 2002


<PAGE>


POWER OF ATTORNEY

        The undersigned director of GATX Corporation, a New York corporation,
does hereby constitute and appoint Brian A. Kenney, Ronald J. Ciancio and
William M. Muckian or any of them, attorneys and agents of the undersigned, with
full power and authority to sign in such director's name, and on behalf of GATX
Corporation, the 2001 Annual Report on Form 10-K under the Securities Exchange
Act of 1934, together with any amendments thereto, hereby ratifying and
confirming all that said attorneys and agents and each of them may do by virtue
hereof.

        IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal.


                                                     /s/ John W. Rogers, Jr.
                                                     ---------------------------
                                                     John W. Rogers, Jr.
                                                     Director


Date: March 21, 2002


<PAGE>


POWER OF ATTORNEY

        The undersigned director of GATX Corporation, a New York corporation,
does hereby constitute and appoint Brian A. Kenney, Ronald J. Ciancio and
William M. Muckian or any of them, attorneys and agents of the undersigned, with
full power and authority to sign in such director's name, and on behalf of GATX
Corporation, the 2001 Annual Report on Form 10-K under the Securities Exchange
Act of 1934, together with any amendments thereto, hereby ratifying and
confirming all that said attorneys and agents and each of them may do by virtue
hereof.

        IN WITNESS WHEREOF, the undersigned has hereunto set his hand and seal.


                                                     /s/ Ronald H. Zech
                                                     ---------------------------
                                                     Ronald H. Zech
                                                     Director


Date: March 21, 2002



</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
