Union Tank Car 10-Q 2006 Q3 Quarterly report

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2006

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to            

Commission file number: 1-5666

UNION TANK CAR COMPANY

(Exact name of registrant as specified in its charter)

Delaware	36-3104688
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

225 W. Washington Street, Chicago, Illinois	60606
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (312) 372-9500

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  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer  ¨    Accelerated filer  ¨    Non-accelerated filer  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

There is no voting stock held by non-affiliates of the registrant. The registrant is not subject to the filing requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934. The registrant is a voluntary filer.

UNION TANK CAR COMPANY AND SUBSIDIARIES

FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2006

INDEX

		Page
Part I.Financial Information
Item 1.	Financial Statements
	Condensed consolidated statements of income - three and nine month periods ended September 30, 2006 and 2005	3
	Condensed consolidated balance sheets - September 30, 2006 and December 31, 2005	4
	Condensed consolidated statements of cash flows - nine months ended September 30, 2006 and 2005	5
	Notes to condensed consolidated financial statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24
Part II.Other Information
Item 1.	Legal Proceedings	25
Item 1A.	Risk Factors	25
Item 2.	Unregistered Sales of Equity and Use of Proceeds	*
Item 3.	Defaults Upon Senior Securities	*
Item 4.	Submission of Matters to Vote of Security Holders	*
Item 5.	Other Information	*
Item 6.	Exhibits	25
Signatures		26

* The response to these items is “None” and the items are omitted from the report pursuant to the instructions to Item II to Form 10-Q.

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

UNION TANK CAR COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Dollars in Thousands)

(Unaudited)

	Three Months Ended September 30,					Nine Months Ended September 30,
	2006		2005			2006		2005
Revenues
Services (leasing and other)	$	205,036	$	193,708		$	609,748	$	568,649
Sales		251,414		223,468			812,084		665,698
		456,450		417,176			1,421,832		1,234,347
Costs and expenses
Cost of services		114,200		118,651			336,791		334,520
Cost of sales		208,783		177,465			683,714		547,550
General and administrative		35,087		34,346			103,874		109,139
Interest expense		26,204		22,629			68,476		62,531
		384,274		353,091			1,192,855		1,053,740
Interest income		4,368		7,587			12,612		14,462
Other income, net		2,025		2,916			4,604		7,053
Income before income taxes and minority interest		78,569		74,588			246,193		202,122
Provision for income taxes		30,331		28,016			90,484		76,787
		48,238		46,572			155,709		125,335
Minority interest		2,092		1,105			5,829		4,345
Net income		46,146		45,467			149,880		120,990
Other comprehensive income (losses)
Unrealized gains (losses) on securities, net of tax		351		(272	)		951		(800	)
Minimum pension liability, net of tax		—		(39	)		—		(853	)
Comprehensive income	$	46,497	$	45,156		$	150,831	$	119,337

See notes to condensed consolidated financial statements.

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UNION TANK CAR COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars in Thousands)

	September 30, 2006			December 31, 2005
	(Unaudited)
Assets
Cash and cash equivalents	$	117,135		$	150,628
Short-term investments		116,039			82,003
Available-for-sale securities		90,557			224,000
Accounts receivable, net of allowances of $7,725 ($8,117 at December 31, 2005)		207,014			182,205
Accounts and notes receivable, affiliate		44,014			43,853
Inventories, net of LIFO reserves of $98,047 ($84,184 at December 31, 2005)		198,802			154,395
Prepaid expenses and deferred charges		11,873			9,448
Railcar lease fleet, net		2,573,616			2,155,425
Intermodal tank container lease fleet, net		351,789			335,510
Other fixed assets, net		282,619			243,833
Other assets		37,519			39,780
Total assets	$	4,030,977		$	3,621,080
Liabilities and Stockholder’s Equity
Accounts payable	$	113,165		$	103,133
Accrued liabilities		265,013			243,617
Advances from parent and affiliates		366,552			10,577
Debt, including $196,058 due within one year ($85,143 at December 31, 2005)		1,367,671			1,438,790
Deferred income taxes and investment tax credits		624,805			585,698
Total liabilities		2,737,206			2,381,815
Minority interest		98,510			92,681
Stockholder’s equity
Common stock		106,689			106,689
Additional capital		169,455			167,608
Retained earnings		919,268			873,389
Accumulated other comprehensive losses		(151	)		(1,102	)
Total stockholder’s equity		1,195,261			1,146,584
Total liabilities and stockholder’s equity	$	4,030,977		$	3,621,080

See notes to condensed consolidated financial statements.

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UNION TANK CAR COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

(Unaudited)

	Nine Months Ended September 30,
	2006			2005
Cash flows from operating activities:
Net income	$	149,880		$	120,990
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		141,929			123,573
Deferred taxes		37,336			26,898
Gain on disposition of lease fleet and other fixed assets		(19,561	)		(5,193	)
Other non-cash income and expenses		10,624			9,367
Changes in assets and liabilities:
Accounts receivable		(23,641	)		(18,608	)
Inventories		(44,978	)		2,654
Prepaid expenses and deferred charges		(956	)		(2,264	)
Accounts payable and accrued liabilities		24,725			(18,255	)
Net cash provided by operating activities		275,358			239,162
Cash flows from investing activities:
Construction and purchase of lease fleet		(561,223	)		(387,392	)
Purchases of other fixed assets		(54,673	)		(54,808	)
Purchases of available-for-sale securities		—			(95,059	)
Proceeds from sales of available-for-sale securities		131,884			35,911
Purchases of short-term investments		(116,084	)		(78,915	)
Proceeds from sales of short-term investments		81,736			45,297
Increase in advances from parent and affiliates		350,350			21,438
Increase in other assets		(2,475	)		(1,932	)
Proceeds from disposals of lease fleet and other fixed assets		33,191			17,471
Proceeds from disposition of business		900			7,274
Net cash used in investing activities		(136,394	)		(490,715	)
Cash flows from financing activities:
Proceeds from issuance of debt		—			311,000
Principal payments of debt		(71,118	)		(28,579	)
Cash dividends		(104,000	)		(84,000	)
Net cash (used in) provided by financing activities		(175,118	)		198,421
Effect of exchange rates on cash and cash equivalents		2,661			(1,952	)
Decrease in cash and cash equivalents		(33,493	)		(55,084	)
Cash and cash equivalents at beginning of year		150,628			98,336
Cash and cash equivalents at end of period	$	117,135		$	43,252
Cash paid during the period for:
Interest	$	55,599		$	51,220
Income taxes		49,505			44,917

See notes to condensed consolidated financial statements.

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UNION TANK CAR COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in Thousands)

(Unaudited)

1. Ownership

UNION TANK CAR COMPANY (the “Company”) is a wholly owned subsidiary of Marmon Holdings, Inc. (“Holdings”). Substantially all of the stock of Holdings is owned, directly or indirectly, by trusts for the benefit of certain members of the Pritzker family. As used herein, “Pritzker family” refers to the lineal descendants of Nicholas J. Pritzker, deceased.

2. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements reflect all adjustments of a normal recurring nature necessary for a fair presentation of the results for the interim periods. These interim financial statements do not include all disclosures normally provided in annual financial statements. Accordingly, they should be read in conjunction with the consolidated financial statements and notes thereto in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005.

Certain prior year amounts have been reclassified to conform to the current year presentation. These reclassifications include presenting the purchases and sales of available-for-sale securities and short-term investments on a gross basis in the consolidated statements of cash flow and presenting the consolidated balance sheet amounts related to certain long-term contracts accounted for under the completed contract method on a net basis. These changes have no impact on previously reported net income and are deemed to be immaterial.

The 2006 interim results presented herein are not necessarily indicative of the results of operations for the full year 2006.

3. Significant Accounting Policies

Available-for-Sale Securities

Available-for-sale securities consist of investment-grade corporate debt securities and U.S. government obligations. Management determines the appropriate classification of investments at the time of acquisition and reevaluates such determination at each balance sheet date. Available-for-sale securities are carried at fair value, with unrealized holding gains and losses, net of tax, reported as a separate component of stockholders’ equity.

Inventories

Inventories are valued at the lower of cost or market, using the first-in, first-out (“FIFO”) or last-in, first-out (“LIFO”) methods. Finished goods, work-in-process, and raw materials represented approximately 57%, 18%, and 25% of net inventories at September 30, 2006 and 55%, 14%, and 31% of net inventories at December 31, 2005, respectively. The Company uses the LIFO costing method for approximately 70% and 68% of its total gross inventories at September 30, 2006 and December 31, 2005, respectively.

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3. Significant Accounting Policies (Continued)

Property and Equipment

Property and equipment are depreciated or amortized over their useful lives primarily on the straight-line method based on management’s estimates of the period over which the assets will generate revenue. The Company periodically reviews these lives relative to physical factors, economic factors and industry trends. Gains and losses on disposals are included in other income, except for those related to railcar and intermodal tank containers disposals, which are included in cost of services.

Asset Impairment

In assessing recoverability of the Company’s long-lived assets, the Company considers changes in economic conditions and makes assumptions regarding estimated future cash flows and other factors. If these estimates or their related assumptions change in the future, the Company may be required to record impairment charges.

Lease Fleet and Other Fixed Assets

	September 30, 2006			December 31, 2005
Railcar lease fleet
Gross cost	$	4,324,529		$	3,852,919
Less accumulated depreciation		(1,750,913	)		(1,697,494	)
	$	2,573,616		$	2,155,425
Intermodal tank container lease fleet
Gross cost	$	486,781		$	455,202
Less accumulated depreciation		(134,992	)		(119,692	)
	$	351,789		$	335,510
Other fixed assets
Gross cost	$	685,463		$	630,663
Less accumulated depreciation		(402,844	)		(386,830	)
	$	282,619		$	243,833

Foreign Currency Translation

Foreign currency translation adjustments and transaction gains and losses are borne by Holdings. For the nine months ended September 30, 2006 and 2005, Holdings absorbed a gain of $660 and a loss of $640, respectively.

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3. Significant Accounting Policies (Continued)

Lessor Accounting

Most of the Company’s railcar and intermodal tank container leases are classified as operating leases. Aggregate rentals from operating leases are reported as revenue ratably over the life of the lease as collectibility is reasonably assured. Expenses, including depreciation and maintenance, are charged as incurred.

Revenue Recognition

Revenue from sales of products is generally recognized upon shipment to customers which is when title and the risks and rewards of ownership are passed on to the customers. Such revenue is based upon determinable sales prices and is recognized only upon collectibility being reasonably assured. Certain long-term contracts are accounted for under the completed contract method when the Company is unable to reasonably forecast costs and the time required to complete those contracts.

Income Taxes

The Company and its more than 80% owned U.S. subsidiaries are included in the consolidated U.S. federal income tax return of Holdings. Under an arrangement with Holdings, federal income taxes, before consideration of tax credits, are computed as if the Company files a separate consolidated return. For this computation, the Company generally uses tax accounting methods which minimize the current tax liability (these methods may differ from those used in the consolidated tax return). Tax liabilities are remitted to, and refunds are obtained from, Holdings on this basis. If deductions and credits available to Holdings’ entire consolidated group exceed those which can be used on its tax return, allocation of the related benefits between the Company and others will be at the sole discretion of Holdings. As a member of a consolidated federal income tax group, the Company is contingently liable for the federal income taxes of the other members of the consolidated group.

Legal Matters

The Company and its subsidiaries have been named as defendants in a number of lawsuits and certain claims are pending. The Company has accrued its best estimate of such claims, and, in the opinion of management, their ultimate resolution will not have a material adverse effect on the Company’s consolidated financial position or results of operations.

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4. Available-for-Sale Securities

At September 30, 2006 and December 31, 2005, the Company had the following investments in marketable securities which have been classified as “available-for-sale”:

September 30, 2006	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Corporate debt securities	$	80,725	$	—	$	(185	)	$	80,540
U.S. government obligations		10,051		—		(34	)		10,017
	$	90,776	$	—	$	(219	)	$	90,557
December 31, 2005	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Corporate debt securities	$	202,863	$	—	$	(1,509	)	$	201,354
U.S. government obligations		22,812		—		(166	)		22,646
	$	225,675	$	—	$	(1,675	)	$	224,000

The gross unrealized holding losses, less related taxes ($77 and $586 at September 30, 2006 and December 31, 2005, respectively) have been reported as a separate component of stockholders’ equity in the accompanying Condensed Consolidated Balance Sheet.

5. Segment Information

The Company operates its largest businesses in three segments: Railcar, Metals Distribution and Intermodal Tank Container Leasing. Segmentation of the Company’s businesses is based upon markets served and organizational structure. The remaining businesses of the Company plus corporate headquarters items and eliminations, are shown as All Other in the table:

	Railcar		Metals Distribution		Intermodal Tank Container Leasing		All Other		Consolidated Totals
	(Dollars in Millions)
Three months ended September 30, 2006
Services revenue	$	157.1	$	1.9	$	28.9	$	17.1	$	205.0
Sales revenue		16.8		200.2		—		34.4		251.4
Income before income taxes and minority interest		44.3		20.5		8.5		5.3		78.6
Three months ended September 30, 2005
Services revenue	$	150.1	$	2.3	$	26.3	$	15.0	$	193.7
Sales revenue		14.6		175.6		—		33.3		223.5
Income before income taxes and minority interest		29.5		25.4		5.3		14.4		74.6
Nine months ended September 30, 2006
Services revenue	$	468.1	$	5.9	$	83.7	$	52.0	$	609.7
Sales revenue		83.5		594.3		—		134.3		812.1
Income before income taxes and minority interest		123.6		67.0		23.5		32.1		246.2
Nine months ended September 30, 2005
Services revenue	$	438.5	$	6.6	$	77.1	$	46.4	$	568.6
Sales revenue		45.6		518.9		—		101.2		665.7
Income before income taxes and minority interest		88.9		57.2		16.2		39.8		202.1

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6. Commitments and Contingencies

The Company’s Canadian subsidiaries have a demand credit facility of approximately $31,325 available on a no-fee basis. Holdings is a guarantor of this demand credit facility. At September 30, 2006, $5,604 of letters of credit were outstanding. No amounts were outstanding for overdrafts or borrowings as of September 30, 2006.

The Company provides warranties on certain products for varying lengths of time. The Company estimates the costs that may be incurred and records a liability in the amount of such costs at the time product revenue is recognized. Changes to the Company’s product warranty accrual during the periods are as follows:

	Nine Months Ended September 30,
	2006			2005
Balance, beginning of year	$	833		$	1,687
Net warranties issued		367			71
Settlements		(348	)		(537	)
Balance, end of period	$	852		$	1,221

The Company maintains appropriate allowances for warranties and periodically reviews the amount of allowances based on management’s assessment of various factors, including claims experience.

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7. Consolidating Financial Information

The following condensed consolidating statements are provided because Procor Limited, a wholly owned subsidiary of the Company, has issued a series of equipment trust certificates, guaranteed by Union Tank Car Company, as part of certain public debt offerings issued by Union Tank Car Company in the United States.

Condensed consolidating statements of income for the three months ended September 30, 2006 and 2005 are as follows:

	Three Months Ended September 30, 2006
	Union Tank Car Company		Procor Limited		Other Subsidiaries		Eliminations			Consolidated
Revenues
Services	$	137,810	$	6,178	$	82,353	$	(21,305	)	$	205,036
Sales		—		—		362,091		(110,677	)		251,414
		137,810		6,178		444,444		(131,982	)		456,450
Costs and expenses
Cost of services		86,045		4,427		45,033		(21,305	)		114,200
Cost of sales		—		—		319,428		(110,645	)		208,783
General and administrative		9,221		1,162		24,704		—			35,087
Interest expense		20,829		864		4,511		—			26,204
		116,095		6,453		393,676		(131,950	)		384,274
Other income, net		1,628		2,468		2,297		—			6,393
Income before income taxes and minority interest		23,343		2,193		53,065		(32	)		78,569
Provision for income taxes		9,571		839		19,921		—			30,331
		13,772		1,354		33,144		(32	)		48,238
Equity in income of subsidiaries		32,374		—		—		(32,374	)		—
Minority interest		—		—		2,092		—			2,092
Net income	$	46,146	$	1,354	$	31,052	$	(32,406	)	$	46,146
	Three Months Ended September 30, 2005
	Union Tank Car Company		Procor Limited		Other Subsidiaries		Eliminations			Consolidated
Revenues
Services	$	131,590	$	5,477	$	73,223	$	(16,582	)	$	193,708
Sales		—		—		304,679		(81,211	)		223,468
		131,590		5,477		377,902		(97,793	)		417,176
Costs and expenses
Cost of services		86,913		1,906		46,414		(16,582	)		118,651
Cost of sales		11		—		258,355		(80,901	)		177,465
General and administrative		9,577		610		24,159		—			34,346
Interest expense		17,806		536		4,287		—			22,629
		114,307		3,052		333,215		(97,483	)		353,091
Other income, net		7,172		289		3,042		—			10,503
Income before income taxes and minority interest		24,455		2,714		47,729		(310	)		74,588
Provision for income taxes		9,195		1,077		17,859		(115	)		28,016
		15,260		1,637		29,870		(195	)		46,572
Equity in income of subsidiaries		30,207		—		—		(30,207	)		—
Minority interest		—		—		1,105		—			1,105
Net income	$	45,467	$	1,637	$	28,765	$	(30,402	)	$	45,467

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7. Consolidating Financial Information (Continued)

Condensed consolidating statements of income for the nine months ended September 30, 2006 and 2005 are as follows:

	Nine Months Ended September 30, 2006
	Union Tank Car Company				Procor Limited		Other Subsidiaries		Eliminations			Consolidated
Revenues
Services	$	408,499			$	19,417	$	245,051	$	(63,219	)	$	609,748
Sales		—				—		1,096,722		(284,638	)		812,084
		408,499				19,417		1,341,773		(347,857	)		1,421,832
Costs and expenses
Cost of services		252,858		��		13,428		133,724		(63,219	)		336,791
Cost of sales		—				—		968,153		(284,439	)		683,714
General and administrative		25,578				2,842		75,454		—			103,874
Interest expense		58,083				1,623		8,770		—			68,476
		336,519				17,893		1,186,101		(347,658	)		1,192,855
Other income, net		7,607				4,686		4,923		—			17,216
Income before income taxes and minority interest		79,587				6,210		160,595		(199	)		246,193
Provision for income taxes		32,626				207		57,651		—			90,484
		46,961				6,003		102,944		(199	)		155,709
Equity in income of subsidiaries		102,919				—		—		(102,919	)		—
Minority interest		—				—		5,829		—			5,829
Net income	$	149,880			$	6,003	$	97,115	$	(103,118	)	$	149,880
	Nine Months Ended September 30, 2005
	Union Tank Car Company				Procor Limited		Other Subsidiaries		Eliminations			Consolidated
Revenues
Services	$	386,279			$	15,552	$	221,957	$	(55,139	)	$	568,649
Sales		—				—		902,006		(236,308	)		665,698
		386,279				15,552		1,123,963		(291,447	)		1,234,347
Costs and expenses
Cost of services		246,459				9,753		133,447		(55,139	)		334,520
Cost of sales		(775	)			—		784,323		(235,998	)		547,550
General and administrative		31,847				1,760		75,532		—			109,139
Interest expense		49,089				1,656		11,786		—			62,531
		326,620				13,169		1,005,088		(291,137	)		1,053,740
Other income, net		8,502				2,466		5,649		4,898			21,515
Income before income taxes and minority interest		68,161				4,849		124,524		4,588			202,122
Provision for income taxes		29,468				1,928		45,506		(115	)		76,787
		38,693				2,921		79,018		4,703			125,335
Equity in income of subsidiaries		82,297				—		—		(82,297	)		—
Minority interest		—				—		4,345		—			4,345
Net income	$	120,990			$	2,921	$	74,673	$	(77,594	)	$	120,990

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7. Consolidating Financial Information (Continued)

Condensed consolidating balance sheets as of September 30, 2006 and December 31, 2005 are as follows:

	September 30, 2006
	Union Tank Car Company			Procor Limited			Other Subsidiaries		Eliminations			Consolidated
Assets
Cash and cash equivalents	$	13,869		$	98,457		$	4,809	$	—		$	117,135
Short-term investments		—			116,039			—		—			116,039
Available-for-sale securities		90,557			—			—		—			90,557
Accounts receivable, net		123,058			1,728			241,868		(159,640	)		207,014
Accounts and notes receivable, affiliate		—			—			44,014		—			44,014
Inventories, net		8,772			1,512			188,518		—			198,802
Prepaid expenses and deferred charges		3,475			2,152			6,246		—			11,873
Advances to parent and affiliates		—			—			349,701		(349,701	)		—
Railcar lease fleet, net		2,343,401			31,769			199,033		(587	)		2,573,616
Intermodal tank container lease fleet, net		—			—			351,789		—			351,789
Other fixed assets, net		41,371			15,520			225,728		—			282,619
Investment in subsidiaries		904,627			75,453			54,036		(1,034,116	)		—
Other assets		5,815			368			31,336		—			37,519
Total assets	$	3,534,945		$	342,998		$	1,697,078	$	(1,544,044	)	$	4,030,977
Liabilities and Stockholder’s Equity
Accounts payable	$	60,832		$	16,812		$	195,157	$	(159,636	)	$	113,165
Accrued liabilities		157,819			5,395			101,396		403			265,013
Advances from parent and affiliates		468,250			248,202			—		(349,900	)		366,552
Debt		1,238,382			2,119			127,170		—			1,367,671
Deferred income taxes and investment tax credits		461,898			19,335			143,572		—			624,805
Total liabilities		2,387,181			291,863			567,295		(509,133	)		2,737,206
Minority interest		—			—			98,510		—			98,510
Stockholder’s equity
Common stock and additional capital		369,558			13,345			370,791		(477,550	)		276,144
Retained earnings		796,626			38,821			641,182		(557,361	)		919,268
Accumulated other comprehensive losses		(152	)		—			1		—			(151	)
Equity adjustment from foreign currency translation		(18,268	)		(1,031	)		19,299		—			—
Total stockholder’s equity		1,147,764			51,135			1,031,273		(1,034,911	)		1,195,261
Total liabilities and stockholder’s equity	$	3,534,945		$	342,998		$	1,697,078	$	(1,544,044	)	$	4,030,977

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7. Consolidating Financial Information (Continued)

	December 31, 2005
	Union Tank Car Company			Procor Limited			Other Subsidiaries			Eliminations			Consolidated
Assets
Cash and cash equivalents	$	70,943		$	75,151		$	4,534		$	—		$	150,628
Short-term investments		—			82,003			—			—			82,003
Available-for-sale securities		224,000			—			—			—			224,000
Accounts receivable, net		40,682			1,445			203,808			(63,730	)		182,205
Accounts and notes receivable, affiliate		—			—			43,853			—			43,853
Inventories, net		9,464			1,652			143,348			(69	)		154,395
Prepaid expenses and deferred charges		3,296			2,479			3,673			—			9,448
Advances to parent and affiliates		—			—			386,205			(386,205	)		—
Railcar lease fleet, net		1,911,056			31,398			213,290			(319	)		2,155,425
Intermodal tank container lease fleet, net		—			—			335,510			—			335,510
Other fixed assets, net		41,261			15,196			187,376			—			243,833
Investment in subsidiaries		978,377			75,455			83,416			(1,137,248	)		—
Other assets		5,820			791			33,169			—			39,780
Total assets	$	3,284,899		$	285,570		$	1,638,182		$	(1,587,571	)	$	3,621,080
Liabilities and Stockholder’s Equity
Accounts payable	$	54,864		$	16,492		$	95,506		$	(63,729	)	$	103,133
Accrued liabilities		158,123			3,687			81,432			375			243,617
Advances from parent and affiliates		250,875			146,074			—			(386,372	)		10,577
Debt		1,294,134			17,419			127,237			—			1,438,790
Deferred income taxes and investment tax credits		420,937			23,308			141,453			—			585,698
Total liabilities		2,178,933			206,980			445,628			(449,726	)		2,381,815
Minority interest		—			—			92,681			—			92,681
Stockholder’s equity
Common stock and additional capital		367,711			13,345			368,339			(475,098	)		274,297
Retained earnings		751,967			65,843			718,326			(662,747	)		873,389
Accumulated other comprehensive losses		(1,098	)		—			(4	)		—			(1,102	)
Equity adjustment from foreign currency translation		(12,614	)		(598	)		13,212			—			—
Total stockholder’s equity		1,105,966			78,590			1,099,873			(1,137,845	)		1,146,584
Total liabilities and stockholder’s equity	$	3,284,899		$	285,570		$	1,638,182		$	(1,587,571	)	$	3,621,080

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7. Consolidating Financial Information (Continued)

Condensed consolidating statements of cash flows for the nine months ended September 30, 2006 and 2005 are as follows:

	Nine Months Ended September 30, 2006
	Union Tank Car Company			Procor Limited			Other Subsidiaries			Eliminations			Consolidated
Net cash provided by operating activities:	$	90,275		$	2,809		$	182,186		$	88		$	275,358
Cash flows from investing activities:
Construction and purchase of lease fleet		(520,051	)		(89	)		(41,361	)		278			(561,223	)
Purchases of other fixed assets		(4,377	)		(1,596	)		(48,700	)		—			(54,673	)
Proceeds from sales of available-for-sale securities		131,884			—			—			—			131,884
Purchases of short-term investments		—			(116,084	)		—			—			(116,084	)
Proceeds from sales of short-term investments		—			81,736			—			—			81,736
Increase (decrease) in advances from parent and affiliates		389,890			102,128			70,380			(212,048	)		350,350
(Increase) decrease in other assets		(366	)		423			(2,532	)		—			(2,475	)
Proceeds from disposals of lease fleet and other fixed assets		15,423			19			17,749			—			33,191
Proceeds from disposition of business		—			—			900			—			900
Net cash provided by (used in) investing activities		12,403			66,537			(3,564	)		(211,770	)		(136,394	)
Cash flows from financing activities:
Principal payments of debt		(55,752	)		(15,299	)		(67	)		—			(71,118	)
Cash dividends		(104,000	)		(33,402	)		(178,280	)		211,682			(104,000	)
Net cash (used in) provided by financing activities		(159,752	)		(48,701	)		(178,347	)		211,682			(175,118	)
Effect of exchange rates on cash and cash equivalents		—			2,661			—			—			2,661
(Decrease) increase in cash and cash equivalents		(57,074	)		23,306			275			—			(33,493	)
Cash and cash equivalents at beginning of year		70,943			75,151			4,534			—			150,628
Cash and cash equivalents at end of period	$	13,869		$	98,457		$	4,809		$	—		$	117,135

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7. Consolidating Financial Information (Continued)

	Nine Months Ended September 30, 2005
	Union Tank Car Company			Procor Limited			Other Subsidiaries			Eliminations			Consolidated
Net cash provided by operating activities:	$	117,231		$	4,150		$	118,404		$	(623	)	$	239,162
Cash flows from investing activities:
Construction and purchase of lease fleet		(329,862	)		(152	)		(58,001	)		623			(387,392	)
Purchases of other fixed assets		(2,841	)		(833	)		(51,134	)		—			(54,808	)
Purchases of available-for-sale securities		(95,453	)		—			394			—			(95,059	)
Proceeds from sales of available-for-sale securities		35,911			—			—			—			35,911
Purchases of short-term investments		—			(78,915	)		—			—			(78,915	)
Proceeds from sales of short-term investments		—			45,297			—			—			45,297
Decrease (increase) in advances to parent and affiliates		9,541			34,160			(21,896	)		(367	)		21,438
Decrease (increase) in other assets		—			2,578			(4,510	)		—			(1,932	)
Proceeds from disposals of lease fleet and other fixed assets		7,510			—			9,961			—			17,471
Proceeds from disposition of business		—			—			7,274			—			7,274
Net cash (used in) provided by investing activities		(375,194	)		2,135			(117,912	)		256			(490,715	)
Cash flows from financing activities:
Proceeds from issuance of debt		311,000			—			—			—			311,000
Principal payments of debt		(27,490	)		(1,060	)		(29	)		—			(28,579	)
Cash dividends		(84,000	)		—			(367	)		367			(84,000	)
Net cash provided by (used in) financing activities		199,510			(1,060	)		(396	)		367			198,421
Effect of exchange rates on cash and cash equivalents		—			(1,952	)		—			—			(1,952	)
(Decrease) increase in cash and cash equivalents		(58,453	)		3,273			96			—			(55,084	)
Cash and cash equivalents at beginning of year		61,663			33,123			3,550			—			98,336
Cash and cash equivalents at end of period	$	3,210		$	36,396		$	3,646		$	—		$	43,252

8. Purchase Options

On March 30, 2006, the Company exercised options to purchase 2,155 railcars that the Company has leased since 1996 as part of certain sale-leaseback transactions. The aggregate purchase price paid by the Company for these railcars was $115,472, of which $75,742 was paid in July 2006 and $19,865 was paid in September 2006. The remaining $19,865 will be paid in December 2006. The Company’s purchase of these railcars was consummated on July 3, 2006, at which time the purchased railcars ceased to be subject to the operating leases under these sale-leaseback transactions. The Company has early buyout options on its remaining sale-leaseback transactions.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements and the related notes that appear elsewhere in this document as well as our Annual Report on Form 10-K for the year ended December 31, 2005 filed with the SEC on March 31, 2006 and our quarterly reports for the periods ended March 31, 2006 and June 30, 2006 filed with the SEC on May 15, 2006 and August 11, 2006, respectively.

Forward-Looking Statements

Certain statements contained in this quarterly report on Form 10-Q for the quarter ended September 30, 2006 may include certain forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including (without limitation) statements with respect to anticipated future operating and financial performance, growth and acquisition opportunities and other similar forecasts and statements of expectation. Words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “seeks”, “estimates”, and “should” and variations of these words and similar expressions, are intended to identify these forward-looking statements. Forward-looking statements made by the Company and its management are based on estimates, projections, beliefs and assumptions of management at the time of such statements and are not guarantees of future performance. The Company disclaims any obligation to update or revise any forward-looking statement based on the occurrence of future events, the receipt of new information or otherwise. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements made by the Company and its management as a result of a number of risks, uncertainties and assumptions. In addition, certain factors, including risk factors identified in “Part I - Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005, may affect the Company’s businesses. As a result, past financial results may not be a reliable indicator of future performance.

Results of Operations

3rd Quarter 2006 versus 3rd Quarter 2005

Performance of the equipment leasing businesses improved in all major markets. Demand for leased railcar equipment and leased intermodal tank containers remained strong, resulting in fleet growth, improved lease rental rates and continued high fleet utilization.

Third quarter revenues and gross profit from services were as follows:

	2006			2005			Increase (Decrease)
	(Dollars in Thousands)
Services revenue	$	205,036		$	193,708		$	11,328
Cost of services		114,200			118,651			(4,451	)
Gross profit from services	$	90,836		$	75,057		$	15,779
Gross profit %		44	%		39	%

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Services revenue in the third quarter of 2006 increased from the third quarter of 2005 primarily due to a $7.0 million increase in railcar leasing and service revenues (equipment additions and higher lease rates), a $2.6 million increase in intermodal tank container leasing revenues (equipment additions and higher lease rates), and a $1.7 million increase in revenues in the contract rail switching business (volume).

Gross profit on services revenue in the third quarter of 2006 increased from the third quarter of 2005 primarily due to a $12.5 million increase for railcar leasing (gains on disposals, equipment additions and higher lease rates more than offsetting higher maintenance and retirement expenses), and a $2.7 million increase for the intermodal tank container leasing business (equipment additions, improved utilization rate and higher lease rates).

Average fleet utilization of the Company’s railcar fleet was 98% for the third quarter of 2006, compared with 99% for the third quarter of 2005. Utilization rates of the Company’s existing railcars are driven by long-term requirements of manufacturers and shippers of chemical products, petroleum products, food products, and bulk plastics, and suitability of the Company’s fleet to meet such demand. The potential impact of short-term fluctuations in demand is tempered by the longer-term nature of the leases.

Strong demand continued for products of the metals distribution business and for railcars. However, despite higher metals distribution prices and volume, margins were lower due to increased costs.

Third quarter revenues and gross profit from sales were as follows:

	2006			2005			Increase (Decrease)
	(Dollars in Thousands)
Sales revenue	$	251,414		$	223,468		$	27,946
Cost of sales		208,783			177,465			31,318
Gross profit from sales	$	42,631		$	46,003		$	(3,372	)
Gross profit %		17	%		21	%

Sales revenue for the third quarter of 2006 increased from the third quarter of 2005 primarily due to $24.6 million higher sales of metals distribution products (higher prices and volume), $2.8 million higher sales of mobile railcar moving equipment (higher volume), $2.3 million increased sales of manufactured railcars (higher volume and prices) and a $1.6 million increase in sales of gear drives (higher volume). These increases were partly offset by a $3.5 million reduction in sales of sulphur processing equipment (completion of a project in the third quarter of 2005).

Gross profit on sales revenue in the third quarter of 2006 decreased from the third quarter of 2005 primarily due to a $3.6 million decrease for metals distribution products. The decrease in gross profit resulted from higher cost of sales, due in part to favorable cost adjustments in 2005, partially offset by the favorable impact of higher prices and higher volume.

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General and administrative expenses in the third quarter of 2006 were $0.7 million higher than in the third quarter of 2005 due to higher expenses in the metals distribution and railcar businesses in the third quarter of 2006.

Interest expense in the third quarter of 2006 was $3.6 million higher than in the third quarter of 2005 due to higher interest expense on advances from parent and affiliates more than offsetting lower interest expense from principal repayments of debt.

The provision for income taxes was $30.3 million in the third quarter of 2006 with an effective tax rate of 38.6%, compared with $28.0 million in the third quarter of 2005 with an effective rate of 37.6%. The 2006 effective rate is higher as a result of an adjustment to the tax liability for unremitted foreign earnings which was partially reduced by the reduction of Canadian tax rates enacted in the second quarter.

Nine Months 2006 versus Nine Months 2005

Performance of the equipment leasing businesses improved in all major markets. Demand for railcar equipment and leased intermodal tank containers remained strong, resulting in fleet growth, improved lease rental rates, and continued high fleet utilization.

First nine months revenues and gross profit from services were as follows:

	2006			2005			Increase (Decrease)
	(Dollars in Thousands)
Services revenue	$	609,748		$	568,649		$	41,099
Cost of services		336,791			334,520			2,271
Gross profit from services	$	272,957		$	234,129		$	38,828
Gross profit %		45	%		41	%

Services revenue for the first nine months of 2006 increased over the first nine months of 2005 primarily due to a $29.6 million increase in railcar leasing and service revenues (equipment additions and higher lease rates), a $6.6 million increase in intermodal tank container leasing revenues (equipment additions, improved utilization rate and higher lease rates), and $5.3 million higher revenue in the contract rail switching business (higher volume).

Gross profit on services revenue in the first nine months of 2006 increased from the first nine months of 2005 primarily due to a $31.9 million increase for railcar leasing (gains on disposals, equipment additions and higher lease rates more than offsetting higher maintenance and retirement expenses), a $6.1 million increase for the intermodal tank container leasing business (equipment additions, higher utilization rate and higher lease rates), and a $1.4 million increase in the contract rail switching business (higher volume).

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Demand increased for products of the metals distribution business and for railcars, with margin improvement driven by higher metals distribution volume and prices.

First nine months revenues and gross profit from sales were as follows:

	2006			2005			Increase (Decrease)
	(Dollars in Thousands)
Sales revenue	$	812,084		$	665,698		$	146,386
Cost of sales		683,714			547,550			136,164
Gross profit from sales	$	128,370		$	118,148		$	10,222
Gross profit %		16	%		18	%

Sales revenue for the first nine months of 2006 increased from the first nine months of 2005 primarily due to $75.4 million higher sales of metals distribution products (higher volume and prices), $38.0 million increased sales of manufactured railcars (higher volume and prices), a $31.6 million increase in sales of sulphur processing equipment (completion of a large project), $3.7 million higher sales of gear drives and $2.7 million higher sales of mobile railcar moving equipment (higher volume). These increases were partly offset by $4.7 million lower sales of sulphur-based fertilizer (business sold in April 2005) and $1.1 million lower sales of containment vessel heads (lower volume).

Gross profit on sales revenue in the first nine months of 2006 increased from the first nine months of 2005 primarily due to a $10.1 million increase for metals distribution products (higher volume and prices more than offsetting higher cost of sales), a $4.0 million increase in sulphur processing equipment (completion of a large project). These increases were partially offset by a $2.3 million decrease for manufactured railcars (higher material costs offsetting higher volume and higher prices) and a $2.1 million decrease for containment vessel heads (lower volume and higher costs).

General and administrative expenses in the first nine months of 2006 were $5.3 million lower than in the first nine months of 2005 due to lower expenses in the railcar business in the first nine months of 2005.

Interest expense in the first nine months of 2006 was $5.9 million higher than in the first nine months of 2005 due to the interest expense related to new financing in 2005 and interest on advances from parent and affiliates more than offsetting lower interest expense from principal repayments of debt.

The provision for income taxes was $90.5 million in the first nine months of 2006 with an effective tax rate of 36.8%, compared with $76.8 million in the in the first nine months of 2005 with an effective rate of 38.0%. The 2006 effective rate is lower primarily as a result of the reduction of Canadian tax rates enacted in the second quarter.

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Financial Condition and Liquidity

Nine Months 2006 versus Nine Months 2005

The net cash provided by operating activities, funds advanced from parent and affiliates, and funds from the liquidation of short-term investments and available-for-sale securities were used to finance additions to the lease fleet and other fixed assets, pay dividends to the Company’s stockholder, and service debt obligations.

It is the Company’s policy to pay to Holdings a quarterly dividend of approximately 70% of net income. To the extent that the Company generates cash in excess of its operating needs, such funds, in excess of the amounts paid as dividends, are advanced to Holdings. Conversely, when the Company requires additional funds to support its operations, prior advances are repaid by or advanced from Holdings. Funds advanced to or from Holdings bear interest at commercial rates. No restrictions exist regarding the amount of dividends which may be paid or advances which may be made by the Company to Holdings.

Cash flows from operating activities:

Operating activities provided $275.4 million of net cash in the first nine months of 2006, compared with $239.2 million provided in the first nine months of 2005. The net cash provided by operating activities was higher in the first nine months of 2006 primarily due to higher net income, depreciation and deferred taxes, partially offset by an increase in net working capital.

Cash flows from investing activities:

Net cash used in investing activities was $136.4 million in the first nine months of 2006 compared with $490.7 million used in investing activities in the first nine months of 2005. The change in net cash used in investing activities was primarily due to the increase in advances from parent and affiliates. In the first nine months of 2006, advances to the Company from parent and affiliates increased $350.4 million, compared with an increase of $21.4 million in the first nine months of 2005.

During the first nine months of 2006, the Company invested $561.2 million in the construction and purchase of lease fleet assets, compared with $387.4 million in the first nine months of 2005. The 2006 capital expenditures included $229.3 million to exercise purchase options for railcars related to sale-leaseback transactions (compared with $76.0 million in the first nine months of 2005) and investment in railcar manufacturing assets. Of the $229.3 million for the railcars related to the sale-leaseback transactions, $63.9 million was paid in the first quarter of 2006, $25.0 million was paid in the second quarter of 2006, and $108.1 million was paid in the third quarter of 2006. The remaining $32.3 million is payable in the fourth quarter of 2006 and is included in accrued liabilities.

Since capital expenditures for railcars are generally incurred subsequent to receipt of firm customer lease orders, such expenditures are discretionary to the Company based on its desire to accept those lease orders. Capital expenditures for intermodal tank containers are likewise discretionary in the intermodal tank container business.

- 21 -

During the first nine months of 2006, the Company invested $54.7 million in the construction and purchase of other fixed assets, compared with $54.8 million in the first nine months of 2005. Capital spending for the construction of a new tank car manufacturing plant in Alexandria, Louisiana from inception through September 30, 2006 totaled $100.5 million, of which $25.0 million has been reimbursed by state and local governments. The remaining capital spending on the Alexandria plant, which is substantially complete and in operation, is expected to be approximately $0.5 million over the remainder of 2006. Further reimbursement of capital spending by state and local governments is expected to total approximately $7.0 million.

During the first nine months of 2006, the Company received a net amount of $97.5 million from the sales in excess of purchases of available-for-sale securities and short-term investments. During the first nine months of 2005, the Company invested a net amount of $92.8 million for purchases in excess of sales of available-for-sale securities and short-term investments. The available-for-sale securities are investment-grade debt obligations with a combined weighted-average maturity under two years. The short-term investments consist of commercial paper with original maturities between four and six months. These investments are available for the Company’s use to fund repayment of principal obligations, finance lease fleet additions (including the exercise of sale-leaseback purchase options), or fund other operating needs.

Proceeds from disposals of lease fleet and other fixed assets were $33.2 million in the first nine months of 2006 compared with $17.5 million in the first nine months of 2005.

Cash flows from financing activities:

Net cash used in financing activities was $175.1 million in the first nine months of 2006 compared with $198.4 million provided by financing activities in the first nine months of 2005. The change in net cash from financing activities was primarily due to the issuance of $311.0 million of debt in 2005.

During the first nine months of 2006, the Company’s financing activities included principal repayments on debt totaled $71.1 million compared with $28.6 million in the first nine months of 2005. Cash dividends to Holdings were $104.0 million in the first nine months of 2006 compared with $84.0 million in the first nine months of 2005.

Management expects future cash provided from operating activities, long-term financings, available-for-sale securities, and advances from parent and affiliates will be adequate to provide for the continued investment in the Company’s business and enable it to meet its debt service obligations.

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New Accounting Pronouncements

In September 2006, the Financial Accounting Standards Board (“FASB”) issued FASB Statement No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans - an amendment of FASB Statements No. 87, 88, 106 and 132(R).” This statement requires the recognition of overfunded or underfunded status of defined benefit plans as an asset or liability and the recognition of changes in the funded status through comprehensive income. This statement also requires the measurement of funded status as of the Company’s year-end. This statement is effective for fiscal years beginning after June 15, 2007, with disclosure of the impact in fiscal years beginning after December 15, 2006. The requirement to use the Company’s year-end as the measurement date is effective for fiscal years ending after December 15, 2008. The Company is currently assessing the impact of this statement on its consolidated financial statements.

In September 2006, the FASB issued FASB Statement No. 157, “Fair Value Measurements.” This statement clarifies the definition of fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. This statement is effective for fiscal years beginning after November 15, 2007. The adoption of this statement is not expected to have a material effect on the Company’s consolidated financial statements.

In September 2006, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 108. This bulletin provides interpretations regarding the effects of prior year misstatements when quantifying misstatements in the current year financial statements. This bulletin is effective for any interim period in the first fiscal year ending after November 15, 2006. The adoption of this bulletin is not expected to have a material effect on the Company’s consolidated financial statements.

In June 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes,” an interpretation of FASB Statement No. 109, “Accounting for Income Taxes.” This interpretation clarifies the accounting for uncertainty in income taxes including defining the criteria that an individual tax position must meet for any part of the benefit of that position to be recognized in financial statements and provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. This interpretation is effective for fiscal years beginning after December 15, 2006, with the cumulative effect of the change in accounting principle recorded as an adjustment to opening retained earnings. The Company is currently assessing the impact of this interpretation on its consolidated financial statements.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes during the first nine months of 2006 in the Company’s disclosure of the quantitative and qualitative market risk contained in Item 7A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2005.

ITEM 4. CONTROLS AND PROCEDURES

As of the end of the period covered by this report, the Company conducted an evaluation, under the supervision and with the participation of the Company’s Principal Executive Officer and Principal Financial Officer, of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)). Based upon that evaluation, the Company’s Principal Executive Officer and Principal Financial Officer have concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

There was no change in the Company’s internal control over financial reporting during the Company’s most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company’s internal controls over financial reporting.

The Company’s management, including the Principal Executive Officer and Principal Financial Officer, does not expect that its disclosure controls and procedures or internal controls and procedures will prevent all error and all fraud. A control system can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Reference is made to “Business - Environmental Matters” in Item 1 and Note 9 “Contingencies” of the Notes to Consolidated Financial Statements of the Company’s Annual Report on Form 10-K for the year ended December 31, 2005 for a description of certain environmental matters.

ITEM 1A. RISK FACTORS

There have been no material changes in the Company’s risk factors from those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005. In addition to the other information set forth in this report, you should carefully consider the risk factors contained in such annual report, as such risks or other risks not currently known to the Company or that the Company does not currently deem material could materially affect the Company’s business, financial condition or future results.

ITEM 6. EXHIBITS

Exhibit 31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
Exhibit 32.1	Certification pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Exhibit 32.2	Certification pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Instruments defining the rights of holders of long-term debt are not being filed herewith pursuant to the provisions of paragraph 4(v) of Item 601(b) of Regulation S-K. The Company agrees to furnish a copy of any such instrument to the Commission upon request.

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SIGNATURES

Pursuant to the requirements 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.

	UNION TANK CAR COMPANY
	REGISTRANT
Dated: November 15, 2006	By:	/s/ Mark J. Garrette
		Mark J. Garrette
		Vice President
		(principal financial officer
		and principal accounting officer)

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