SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    Form 10-K

                 X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended December 31, 1997

                                       OR



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

                          Commission File Number 1-2328


                                GATX Corporation

Incorporated in the                          IRS Employer Identification Number
 State of New York                                        36-1124040

                             500 West Monroe Street
                          Chicago, Illinois 60661-3676
                                 (312) 621-6200

           Securities Registered Pursuant to Section 12(b) of the Act:

                                                           Name of each exchange
Title of each class or series                               on which registered
- -----------------------------                            -----------------------
Common Stock                                             New York Stock Exchange
                                                         Chicago Stock Exchange
                                                         London Stock Exchange

$2.50 Cumulative Convertible Preferred Stock,            New York Stock Exchange
Series A                                                 Chicago Stock Exchange

$2.50 Cumulative Convertible Preferred Stock,            New York Stock Exchange
Series B                                                 Chicago Stock Exchange

           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. x/
      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 6, 1998,  24,558,983 common shares were  outstanding,  and the
aggregate  market  value of the  common  shares  (based  upon the  March 6, 1998
closing  price  of  these  shares  on the  New  York  Stock  Exchange)  of  GATX
Corporation held by nonaffiliates was approximately $1,846.5 million.

                       Documents Incorporated by Reference

       Portions of the GATX  Annual  Report to  Shareholders  for the year ended
December 31, 1997 are incorporated by reference into Parts I and II. Portions of
GATX's proxy statement  dated March 17, 1998 are  incorporated by reference into
Part III.






PART I

Item 1.  Business

GATX Corporation is a holding company whose  subsidiaries  engage in the leasing
and  management of railroad  tank cars and  specialized  freight  cars;  provide
equipment and capital asset financing and related services; own and operate tank
storage  terminals,  pipelines  and  related  facilities;  engage in Great Lakes
shipping;   and  provide   distribution  and  logistics   support  services  and
warehousing  facilities.  Information  concerning  financial  data  of  business
segments and the basis for grouping products or services is contained in Exhibit
13, GATX Annual Report to  Shareholders  for the year ended December 31, 1997 on
page 29 and pages 34 through 37, which is incorporated herein by reference (page
references are to the Annual Report to Shareholders).

Industry Segments

                         Railcar Leasing and Management

The Railcar Leasing and Management  segment  (Transportation),  headquartered in
Chicago,  Illinois,  is  principally  engaged in leasing  specialized  railcars,
primarily  tank cars,  under full service  leases.  As of December 31, 1997, its
North American  fleet  consisted of  approximately  81,100  railcars,  including
62,900 tank cars and 18,200 specialized freight cars, including conventional and
Airslide(TM)  covered hopper cars. In addition to roughly 70,700 railcars in the
United States,  Transportation has approximately  9,200 railcars in its Canadian
fleet and 1,200 railcars in its Mexican fleet.  Transportation  has upgraded its
fleet over time by adding new larger  capacity  cars and retiring  older smaller
capacity cars.  Transportation's railcars have a useful life of approximately 30
to 33 years.  The  average  age of the  railcars  in  Transportation's  fleet is
approximately 16 years.

The following table sets forth the car types comprising  Transportation's  North
American fleet.

                                            Year Ended December 31,
                               -------------------------------------------------
                                1997       1996       1995      1994       1993
                               ------     ------     ------    ------     ------

Tank cars                      62,900     60,400     53,900    50,700     48,000
Freight, covered hopper,
  and plastic pellet cars      18,200     17,100     11,000     9,100      7,800
                               ------     ------     ------    ------     ------

North American fleet           81,100     77,500     64,900    59,800     55,800
                               ======     ======     ======    ======     ======

In  addition  to the  North  American  fleet,  Transportation's  investments  in
affiliates  result  in  ownership   interests  in  other  fleets.   During  1997
Transportation  purchased a 40% interest in KVG Kesselwagen  Vermietgesellschaft
mbH ("KVG"), a German and Austrian-based  tank car and specialty railcar leasing
company  that owns and  operates  approximately  9,400  railcars  in Europe,  to
complement its existing 12 1/2% interest in European-based AAE Cargo.

Transportation's   customers  use  its  railcars  to  ship  over  700  different
commodities,  primarily  chemicals,  petroleum,  and food  products.  For  1997,
approximately  51% of railcar leasing  revenue was  attributable to shipments of
chemical products, 20% to petroleum products, and 16% to food products.  Many of
these products require cars with special features;  Transportation offers a wide
variety of sizes and types of cars to meet these  needs.  Transportation  leases
railcars  to over  700  customers,  including  major  chemical,  oil,  food  and
agricultural  companies.  No single customer  accounts for more than 4% of total
railcar leasing revenue.

Transportation typically leases new railcars to its customers for a term of five
years or longer,  whereas  renewals or leases of existing cars are typically for
periods  ranging from less than a year to seven years with an average lease term
of about three years.  The utilization rate of  Transportation's  railcars as of
December 31, 1997 was approximately 96%.

Under  its full  service  leases,  Transportation  maintains  and  services  its
railcars,  pays ad valorem taxes, and provides many ancillary services.  Through
its GATX Conductor web site, for example, Transportation provides customers with
timely  analysis and performance  statistics  about their leased cars to enhance
and maximize the utilization of this equipment.  Transportation also maintains a
network of major service centers consisting of four domestic, three Canadian and
one  Mexican   facility.   To  supplement  the  eight  major  service   centers,
Transportation  utilizes a fleet of mobile trucks and also utilizes  independent
third-party repair shops.

Transportation purchases most of its new railcars from Trinity Industries,  Inc.
(Trinity), a Dallas-based metal products manufacturer,  under a contract entered
into in 1984 and extended from time to time  thereafter,  most recently in 1992.
Transportation  anticipates  that through this  contract it will  continue to be
able to satisfy  its  customers'  new car lease  requirements.  Transportation's
engineering   staff  provides   Trinity  with  design   criteria  and  equipment
specifications,  and works with  Trinity's  engineers to develop new  technology
where  needed in order to upgrade or improve car  performance  or in response to
regulatory requirements.

The full-service railcar leasing industry is comprised of Transportation,  Union
Tank Car Company,  General Electric Railcar Services  Corporation,  Shippers Car
Line division of ACF Industries,  Incorporated, Procor Limited, and many smaller
companies.

                                       -1-





Of the approximately  218,000 tank cars owned and leased in the United States at
December  31,  1997,   Transportation   had  approximately   57,000.   Principal
competitive factors include price, service and availability.

                               Financial Services

GATX  Financial  Services,  through  its  principal  subsidiary,  GATX  Capital,
provides  asset-based  financing,   sells  and  services  technology  equipment,
structures  transactions  for  investment  by other  lessors,  and manages lease
portfolios for third parties. Asset-based financing is provided primarily to the
aircraft, rail, technology, and marine industries.  These financings,  which are
held  within  GATX  Capital's  own  portfolio  and  through   partnerships  with
coinvestors,  are structured as leases and secured loans, and frequently include
interests in the asset's residual value. Centron and Sun Financial,  two of GATX
Capital's  subsidiaries,  sell,  service,  and  finance  information  technology
equipment.  For its transaction  structuring and portfolio  management services,
Capital  receives fees at the time the  transaction  is  completed,  an asset is
remarketed, and/or on an ongoing basis.

GATX Capital competes with captive leasing  companies,  leasing  subsidiaries of
commercial  banks,  independent  leasing  companies,  lease brokers,  investment
bankers, and financing arms of equipment  manufacturers.  In addition to its San
Francisco home office, Capital has 4 domestic and 11 foreign offices.

At December  31,  1997,  GATX  Capital's  asset  concentrations  within its $2.2
billion portfolio were:

                             Aircraft           26%
                             Rail               25%
                             Technology         16%
                             Marine              8%
                             Other              25%

                             Terminals and Pipelines

GATX Terminals Corporation  (Terminals) is engaged in the storage,  handling and
intermodal  transfer of petroleum and chemical  commodities at key points in the
bulk liquid  distribution  chain.  All of its  terminals  are located near major
distribution  and  transportation  points and most are capable of receiving  and
shipping bulk liquids by ship, rail, barge and truck. Many of the terminals also
are linked with major interstate pipelines. In addition to storing, handling and
transferring bulk liquids,  Terminals  provides blending and testing services at
most of its facilities. Terminals,  headquartered in Chicago, Illinois, owns and
operates 23 terminals in 10 states,  and seven  terminals in the United Kingdom.
Terminals  also has joint  venture  interests  in 14  international  facilities.
Additionally, Terminals owns or holds interests in four refined product pipeline
systems.

As of December 31, 1997,  Terminals had a total  storage  capacity of 68 million
barrels. This includes 48 million barrels of bulk liquid storage capacity in the
United States,  8 million barrels in the United Kingdom,  and an equity interest
in another 12 million barrels of storage capacity in Europe,  Mexico and the Far
East.  Terminals' smallest bulk liquid facility has a storage capacity of 95,000
barrels while its largest facility,  located in Pasadena,  Texas, has a capacity
of over 12 million  barrels.  Capacity  utilization  at Terminals'  wholly-owned
facilities averaged 91% during 1997; throughput, or deliveries to customers, for
the year was 639 million barrels.

In 1997,  a  strategic  decision  was made to sell or close  the  Staten  Island
terminal and the seven storage  facilities which make up GATX Terminals  Limited
in the United Kingdom.  The decision  included  analyses of the related customer
base, industry served, and profitability  outlook related to each facility.  The
Staten  Island  terminal  serves the petroleum  market while the United  Kingdom
facilities serve both the petroleum and chemical  markets in  approximately  the
same proportion.  Other smaller facilities are also being evaluated for possible
sale or closure.

For 1997, 54% of Terminals' revenue was derived from petroleum storage, 23% from
chemical  storage,  22% from pipelines,  and 1% from other products.  Demand for
Terminals'  facilities  depends in part upon demand for  petroleum  and chemical
products and is also affected by refinery output, foreign imports,  availability
of  other  storage  facilities,  and the  expansion  of its  customers  into new
geographical markets.

Terminals serves over 450 customers,  including major oil and chemical companies
as well as trading firms and larger  independent  refiners.  No single  customer
accounts for more than 6% of Terminals' revenue.  Customer service contracts are
both short term and long term.

Terminals along with two Dutch companies, Pakhoed N.V. and Van Ommeren N.V., are
the three major international public terminaling companies.  Pakhoed carries out
its  operations  under the name  Paktank.  (On March 2,  1998,  Pakhoed  and Van
Ommeren announced a proposed merger (VOPAK), subject to approval by the European
Commission.)  The domestic public  terminaling  industry  consists of Terminals,
Paktank  Corporation,  International-Matex  Tank  Terminals (a joint  venture in
which  Van  Ommeren  participates),  and many  smaller  independent  terminaling
companies.  In  addition  to  public  terminaling  companies,  oil and  chemical
companies also have significant storage capacity and compete with Terminals in a
number of markets.  Terminals'  pipelines  compete  with rail,  trucks and other
pipelines  for  movement of liquid  petroleum  products.  Principal  competitive
factors  include  price,  location  relative  to  distribution  facilities,  and
service.

                                       -2-





                            Logistics and Warehousing

GATX Logistics, Inc. is one of the largest third-party providers of distribution
and logistics support services and warehousing  facilities in the United States.
Headquartered in Jacksonville,  Florida,  GATX Logistics operates 106 facilities
covering  approximately  21 million  square feet of  warehousing  space in North
America with  utilization of 95% at the end of 1997.  Value- adding services are
strategically  the most important benefit GATX Logistics  provides.  Examples of
these  services are  integrated  logistics  solutions,  information  management,
just-in-time delivery systems, packaging,  sub-assembly,  freight management and
returns management.

GATX  Logistics  continued  implementing  its strategy of  providing  integrated
logistics  solutions to an expanding  customer base while steadily  reducing its
role in lower margin,  public warehousing business. As a result, during 1997 the
value of certain past  acquisitions  involved in public  warehousing was written
down to better reflect the economics of that industry sector.

GATX  Logistics  serves  over 400  customers,  many of which  are  Fortune  1000
companies. Most customers are manufacturers, but the customer base also includes
retailers.  In the warehousing  sector,  GATX Logistics  competes primarily with
in-house or private  operations  and with other  national  operators  as well as
multi-regional  and local operators.  In providing  transportation and logistics
services,  GATX  Logistics  competes  with  the  major  trucking  companies  and
providers of specialized distribution services.

GATX Logistics' revenue source by industry served during 1997 was 37% automotive
/ industrial equipment,  14% consumer products, 14% grocery, 10% electronics and
computers,  8% consumer durables,  4% chemical,  4% industrial products,  and 9%
other. No single customer accounts for more than 11% of Logistics' revenue.

                              Great Lakes Shipping

American  Steamship  Company (ASC),  with the largest  carrying  capacity of the
domestic Great Lakes vessel  fleets,  provides  modern and efficient  waterborne
transportation of dry bulk materials to the integrated  steel,  electric utility
and construction industries. ASC's fleet is entirely comprised of self-unloading
vessels  which do not require  shoreside  assistance to discharge  cargo.  ASC's
eleven vessels range in size from 635 feet to 1,000 feet, transport cargoes from
17,000 net tons up to 70,000 net tons  depending on vessel size,  and can unload
at speeds  from  2,800 net tons per hour up to 10,000  net tons per hour.  Great
Lakes vessels are not subject to the severe  rusting  condition  typical of salt
water vessels. As a result, ASC's vessels have expected lives of 50 to 75 years.

In 1997, ASC carried 26.4 million tons of cargo. ASC primarily  transported iron
ore, coal, and limestone aggregate.  Other commodities transported include sand,
salt,  potash,  gypsum,  grain,  marble chips and slag.  ASC's revenue source by
industry  served  during  1997  was  46%  steel,  24%  construction,  23%  power
generation, and 7% other. No single customer accounts for more than 24% of ASC's
revenue.

ASC competes with three other U.S.  flag Great Lakes  commercial  fleets,  which
include U.S.S. Great Lakes Fleet,  Inc.,  Oglebay Norton Company,  and Interlake
Steamship,  and with steel companies  which operate captive fleets.  Great Lakes
shipping  is  the  only  major  activity  of  GATX  which  consumes  substantial
quantities  of petroleum  products;  fuel for these  operations  is presently in
adequate  supply.  Competition is based  primarily on service and price.  ASC is
headquartered in Williamsville, New York, and has one regional office.

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

Customer Base
- -------------
GATX and its  subsidiaries  are not  dependent  upon a single  customer or a few
customers. The loss of any one customer would not have a material adverse effect
on any segment or GATX as a whole.

Employees
- ---------
GATX and its subsidiaries have approximately 6,000 active employees, of whom 20%
are hourly employees covered by union contracts.



Environmental Matters
- ---------------------
                                       -3-





Certain operations of GATX's subsidiaries  (collectively GATX) present potential
environmental risks principally through the transportation or storage of various
commodities.  Recognizing  that some 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
potentially  the liabilities  associated with the conduct of its operations.  In
addition,  GATX's foreign operations are subject to environmental laws in effect
in 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  clean-up  costs at 12 sites  under the  requirements  of the  Federal
Comprehensive  Environmental  Response,  Compensation  and Liability Act of 1980
(Superfund) and the National  Resource Damage  Assessment.  Under these Statutes
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.  In all
instances,  GATX is one of a number of financially responsible PRPs and has been
identified as contributing  only a small percentage of the contamination at each
of the sites.  Due to various  factors such as the required level of remediation
and participation in clean-up efforts by others,  GATX's total clean-up 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  environmental  costs  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.

GATX's  environmental  reserve at the end of 1997 was $75 million  and  reflects
GATX's best estimate of the cost to remediate  known  environmental  conditions.
Additions  to the  reserve  were $11  million  in 1997 and $12  million in 1996.
Expenditures  charged to the reserve  amounted to $14 million and $18 million in
1997 and 1996, respectively.

In 1997,  GATX made capital  expenditures of $13 million for  environmental  and
regulatory  compliance  compared to $17 million in 1996. These projects included
marine vapor recovery  systems,  discharge  prevention  compliance,  waste water
systems,  impervious dikes, tank modifications for emissions  control,  and tank
car cleaning systems. Environmental projects authorized or planned would require
capital  expenditures of approximately  $14 million in 1998. GATX anticipates it
will make annual  expenditures at approximately  the same level over each of the
next three years.


                                       -4-





Item 2.  Properties
- -------------------
Information  regarding the location and general character of certain  properties
of GATX is included in Item 1,  Business,  of this  document  and in Exhibit 13,
GATX Annual Report to Shareholders  for the year ended December 31, 1997 on page
67, GATX  Location of  Operations  (page  reference  is to the Annual  Report to
Shareholders).  The major  portion of  Terminals'  land is owned;  the  balance,
including  some of its  dock  facilities,  is  leased.  Most  of the  warehouses
operated by GATX Logistics are leased; the others are managed for third parties.

Item 3.  Legal Proceedings
- --------------------------
A Final  Judgment has been entered by the U.S.  District  Court for the Northern
District of Illinois in favor of General American Transportation  Corporation in
the previously reported matter of General American Transportation Corporation v.
Cryo-Trans,  Incorporated  (Case No. 91 C 1305),  a case  involving  an  alleged
patent  infringement  by GATC  in the  construction  and  use of its  ArcticarTM
cryogenically  cooled railcar. A Petition for Writ of Certiorari filed on behalf
of Cryo-Trans, Incorporated was denied by the United States Supreme Court.

On  July  11,  1996,  GATX/Airlog  Company  ("Airlog"),   a  California  general
partnership of which a subsidiary of GATX Capital  Corporation  (a  wholly-owned
subsidiary of GATX  Corporation)  ("Capital") is a partner,  and Capital filed a
complaint for Declaratory  Judgment against  Evergreen  International  Airlines,
Inc.,  ("Evergreen")  in the  United  States  District  Court  for the  Northern
District of California (No. C96-2494) seeking a declaration that neither Capital
nor  Airlog  has any  liability  to  Evergreen  as a result of the  issuance  of
Airworthiness Directive 96-01-03 (the "Airworthiness  Directive") by the Federal
Aviation  Administration  (the  "FAA")  in  January  1996.  The  effect  of  the
Airworthiness  Directive is to reduce  significantly  the amount of freight that
three of Evergreen's B747 aircraft may carry.

Between 1988 and 1990, these three aircraft, along with a fourth no longer owned
by  Evergreen,   were  modified  from  passenger  to  freight  configuration  by
subcontractors of Airlog,  with Evergreen's  knowledge and consent,  pursuant to
contracts  between  Airlog and  Evergreen or one of its  affiliates.  These four
aircraft are part of a group of ten B747 aircraft (the "Affected Aircraft") that
were modified by  subcontractors  of Airlog under authority of Supplemental Type
Certificates  issued by the FAA pursuant to a design  approved by the FAA at the
time the  modifications  were made,  and which are subject to the  Airworthiness
Directive (the "STCs").  The three Evergreen  aircraft were flown as part of its
fleet for more than five years, and the seven other Affected Aircraft were flown
by Evergreen and the three other  operators  for  significant  periods.  Capital
guaranteed certain of Airlog's  obligations to Evergreen.  Capital did not issue
guarantees  with  respect  to  Airlog's  obligations  to any of  Airlog's  other
customers for the Affected Aircraft.

Evergreen  filed an answer and  counterclaim  on August 1, 1996  asserting  that
Airlog  and  Capital  are  liable  to it under a number  of  legal  theories  in
connection  with the  application  of the  Airworthiness  Directive to its three
aircraft.  In an initial disclosure statement dated October 29, 1996, and served
on Airlog and Capital pursuant to applicable discovery rules,  Evergreen alleged
damages which it calculated as follows:  (i)  out-of-service  costs amounting to
approximately  $16.2  million as of October 15,  1996;  (ii) denial of access to
then currently  favorable capital markets,  resulting in an alleged inability to
issue  shares  in an  initial  public  offering  with a value of as much as $1.8
billion; (iii) lost flight revenues and profits amounting to approximately $25.8
million;   (iv)  lost  business   opportunities  and  profits   attributable  to
Evergreen's diminished 747 fleet capacity (which Evergreen did not quantify, but
indicated  is  subject  to  further  calculation);   and  maintenance  costs  in
responding  to  the  Airworthiness   Directive  (and  to  related  airworthiness
directives  issued by the FAA) of  approximately  $1.6 million as of March 1996.
The  counterclaim  also seeks  exemplary and punitive  damages in an unspecified
amount. In its November 7, 1997 Subsequent Case Management Statement,  Evergreen
claims that it seeks recovery for  out-of-pocket  losses,  lost  revenues,  lost
profits, lost business opportunities, maintenance work, repair costs and capital
losses in an amount that exceeds $145 million.

Airlog and Capital filed a motion seeking partial summary judgment as to four of
Evergreen's counterclaims.  Airlog and Capital alleged that three counterclaims,
each for breach of  warranty,  are barred by the  California  Commercial  Code's
four-year statute of repose,  and that a fourth  counterclaim,  seeking recovery
for negligent  misrepresentation is barred by the "economic loss doctrine" which
prevents  contracting parties from attempting to use tort law to avoid liability
limitations they agreed to in their contracts.  On June 5, 1997, the Court ruled
on the Motion For Partial Summary  Judgment.  The Court granted the motion as to
Evergreen's  counterclaim  that alleged  Airlog  breached its warranty under the
Purchase  Agreement  pursuant to which Airlog sold one of the converted aircraft
to Evergreen,  and denied the motion as to Evergreen's  counterclaim that Airlog
breached its warranty under the Modification Agreements pursuant to which Airlog
manufactured and installed  freighter  conversion kits with respect to two other
aircraft owned by Evergreen.  The Court ruled that the Purchase  Agreement was a
contract  for the sale of goods and that  claims  thereunder  were barred by the
four year  statute of  limitations  under the  California  Commercial  Code (the
"Code").  The Court ruled that the  Modification  Agreements  were  contracts of
services  not  governed  by  the  Code,  and  that  any  applicable  statute  of
limitations  did not  begin to run until  Evergreen  had,  or  should  have had,
knowledge of the alleged  breach.  The Court also denied the motion with respect
to  Evergreen's  counterclaim  in  which  it  alleged  that  Airlog  negligently
misrepresented  certain facts which purportedly  induced Evergreen to enter into
the Purchase and Modification Agreements. The Court's ruling bars Evergreen from
recovering under its claim for breach of warranty under the Purchase  Agreement,
and permits Evergreen (subject to reconsideration or appeal) to proceed with its
claim for breach of warranty under the Modification  Agreements and its claim of
negligent  misrepresentation.  The ruling  does not  represent  a decision  that
Evergreen is entitled to prevail on those claims.  Airlog and Capital have other
defenses to those claims which they are vigorously asserting.

                                       -5-





On January 31,  1997,  American  International  Airways,  Inc.  ("AIA")  filed a
complaint  in the United  States  District  Court for the  Northern  District of
California  (C97-0378)  against Airlog,  Capital,  Airlog  Management Corp., and
others  asserting  that  Airlog and  Capital  are liable to it under a number of
legal theories in connection with the application of the Airworthiness Directive
to two  Affected  Aircraft  owned  by  AIA.  These  aircraft  were  modified  by
subcontractors of Airlog in 1992 and 1994 with AIA's knowledge and consent,  and
are two of the ten Affected Aircraft. The Complaint seeks damages (to be trebled
under one count of the  complaint)  of an  unspecified  amount  relating to lost
revenues,  lost  profits,  denied  access  to  capital  markets,  repair  costs,
disruption of its business plan,  lost business  opportunities,  maintenance and
engineering costs, and other additional  consequential,  direct,  incidental and
related  damages.  The Complaint asks in the alternative for a recision of AIA's
agreements  with Airlog and a return of amounts paid, and for injunctive  relief
directing that Airlog,  and certain  individual  defendants,  properly staff and
manage the correction of the alleged  deficiencies  that caused the FAA to issue
the  Airworthiness  Directive.  AIA filed a Joint Case Management  Statement and
Proposed Order  specifying the damages it has allegedly  suffered as a result of
the application of the  Airworthiness  Directive to the two Affected Aircraft it
owns. In that  pleading,  AIA alleges that it sustained  damages of  $43,787,954
through May 31,  1997,  and further  alleges that it continues to accrue loss of
use damages of at least $1,800,000 per month until the aircraft are operational.

On June 4, 1997, Tower Air, Inc.  ("Tower") filed an action in the Supreme Court
of the  State of New York,  County of New York  (Index  No.  97/602851)  against
Capital,  Airlog,  an officer of Capital and others with respect to one Affected
Aircraft it leased and subsequently purchased from a trust for the benefit of an
affiliate of Airlog in December  1994.  This action  asserts causes of action in
fraud and deceit, negligent  misrepresentation,  breach of contract,  negligence
and seeks  damages  in excess of $25  million  together  with  interest,  costs,
attorneys' fees and punitive damages.

General Electric  Capital  Corporation and a subsidiary  thereof  (collectively,
"GECC"),  Airlog,  GATX Corporation and Capital entered into a Tolling Agreement
dated  December 17, 1996 and amended in April 1997 and January 1998. The Tolling
Agreement  relates to certain  causes of action under a number of legal theories
arising out of the  modification  of three  Affected  Aircraft from passenger to
freighter  configuration.  These  aircraft  were modified by  subcontractors  of
Airlog in 1991 with GECC's knowledge and consent.  Under the Tolling  Agreement,
as amended,  the parties  have agreed  that any  defenses of  expiration  of the
statute of limitations or statue of repose or laches applicable to the causes of
action asserted by GECC are tolled up to and including July 6, 1998.

On February 25, 1998 The Bank of New York ("BNY") filed an action, as beneficial
owner of an  Affected  Aircraft,  in the United  States  District  Court for the
Northern District of California (No. C98-0385 WHO). This aircraft was originally
converted  by Airlog for  Evergreen.  This action seeks  declaratory  relief and
asserts   claims  for  breach  of   contract,   intentional   misrepresentation,
nondisclosure of known facts, negligence, negligent misrepresentation and unfair
competition. The suit alleges damages of a minimum of $262,000 per month in lost
rent and storage costs, unspecified maintenance and related expenses, diminution
in the value of its  aircraft by well in excess of $10 million plus the costs of
aircraft   inspection  and   modifications  to  comply  with  the  Airworthiness
Directive,  "Anticipated to be in the millions of dollars." Claims for interest,
injunctive relief, restitution and attorneys' fees are also included.

Airlog and Capital have filed an action in the United States  District Court for
the Northern District of California against Pemco Aeroplex,  Inc. (C97-2484WHO),
a  contractor  for Airlog which  obtained  the STCs and modified  certain of the
Affected  Aircraft.  The Complaint in this action  alleges  causes of action for
fraudulent  and negligent  misrepresentation,  breach of contract,  professional
negligence, implied and equitable indemnity and contribution.  This action seeks
a judgment  awarding the plaintiffs  any and all damages,  costs and expenses in
connection  with the  resolution  of the concerns of the FAA as expressed in the
Airworthiness  Directive or relating to it,  repairing  the  Affected  Aircraft,
defending  against the  litigation  involving  the  plaintiffs  arising from the
Affected  Aircraft,  paying any judgments against plaintiffs that may be entered
in said  litigation and attorneys' fees incurred by the plaintiffs in connection
with defending said litigation.

On December  18,  1997,  Airlog  filed a claim under the Federal Tort Claims Act
against the FAA for negligence in connection with the FAA's participation in the
design and  manufacture  of the Affected  Aircraft in the amount of  $6,204,065.
This amount represents, as at December 18, 1997, the expenses incurred by Airlog
in responding to the  Airworthiness  Directive and legal fees and costs incurred
in  defending  the  litigation  described  above.  Airlog  reserved its right to
increase  the amount of its claim in the future.  On January 29,  1998,  the FAA
rejected Airlog's claim.  While  disappointing,  the FAA's rejection of Airlog's
claim was a procedural  requirement to initiating litigation against the Agency.
Under the  applicable  statute  Airlog has six months in which to file an action
against the FAA.

On February 10, 1998,  the FAA issued a letter to Airlog that  approves a number
of Airlog generated Service  Bulletins which, when collectively  performed on an
Affected  Aircraft,  permit an  operator  of such  aircraft  to achieve  revenue
service, but at payloads less than the original certified payload.

Consistent with its ongoing product support,  Airlog  continues to pursue,  with
the apparent cooperation of each of the four operators of the Affected Aircraft,
including  Evergreen,  GECC and AIA,  solutions to the FAA's remaining  concerns
raised in the Airworthiness  Directive.  While the results of any litigation are
impossible  to predict with  certainty,  the Company  believes  that each of the
foregoing  claims are without  merit,  and that Capital and Airlog have adequate
defenses thereto.

Various  lawsuits  have  been  filed  in the  Superior  Court  for the  State of
California, County of San Bernardino, and served upon

                                       -6-





GATX Terminals,  Calnev Pipe Line Company, or another GATX subsidiary seeking an
unspecified  amount of  damages  arising  out of the May 1989  explosion  in San
Bernardino,  California.  All of those suits have all been resolved  except for:
Aguilar,  et al, v. Calnev Pipe Line Company,  et al, filed February 1990 in the
County of Los Angeles (No. 0751026); Pearson v. Calnev Pipe Line Company, et al,
filed May 1990 in the County of San  Bernardino  (No.  256206);  Davis v. Calnev
Pipe Line Company, et al, filed May 1990 (No. 256207).  As Terminals'  insurance
carriers have assumed the defense of these  lawsuits  without a  reservation  of
rights and have paid all of the settlements  entered into between the parties to
date,  GATX believes that the likelihood of a material  adverse effect on GATX's
consolidated financial position or results of operations is remote.

                                       -7-





In September 1997, judgment was entered against General American  Transportation
Corporation  ("GATC"),  its wholly owned subsidiary,  GATX Terminals Corporation
("GTC") and seven other defendants not related to GATX for compensatory  damages
of  approximately  $1.9 million plus  interest  from the date of the incident to
twenty  individuals in a class action law suit filed in the Civil District Court
for the Parish of Orleans, LA, In Re New Orleans Train Car Leakage Fire Incident
(No. 87-16374).  The judgment allocated responsibility for twenty percent of the
compensatory  damages to GATC and ten percent to GTC. The judgment also provided
for punitive  damages of $3.4 billion in the aggregate  against five of the nine
named  defendants,  including $190 million against GTC. The litigation arose out
of an incident which began on September 9, 1987,  when  butadiene  leaked from a
tank car owned by GATC and caught fire.  The  incident  resulted in no deaths or
significant  injuries and only minimal property damage, but caused the overnight
evacuation of a number of residents from the immediate area.

On October 31,  1997,  the  Louisiana  Supreme  Court ruled that the trial Court
erred in  rendering a judgment  awarding  damages  prior to rendering a judgment
adjudicating all liability issues in the case. Accordingly, it vacated the trial
Court's September 1997 judgment which had awarded both compensatory and punitive
damages,  and remanded the case back to the trial Court for further  proceedings
not inconsistent with its ruling. The plaintiffs have filed a motion asking that
the trial Court refrain from signing a judgment until all remaining 8,000 claims
are tried.  The  defendants  have filed motions  asking the Court (1) to enter a
judgment on  liability as to  compensatory  damages and as to the conduct of the
defendants  giving  rise to  punitive  damages,  and (2) to vacate  the  verdict
awarding  punitive  damages.  If a  judgment  is  entered  as  suggested  by the
defendants,  the  Company  will be in a position  to seek  appropriate  judicial
review of the liability determinations made to date and of the finding as to the
conduct on which  punitive  damages were based.  The Company  will  evaluate any
further  ruling of the trial Court,  and if  appropriate  ask the Court for post
judgment relief. If necessary, the Company will appeal any judgment against it.

Although  more than 8,000 claims have been made,  the Company  believes that the
damages,  if any, that may be awarded to the remaining  claimants should average
substantially  less than those  awarded to the initial  twenty  plaintiffs.  The
Company  also  believes  that the award of  compensatory  damages  to the twenty
plaintiffs was excessive,  and that the punitive  damages judgment as to GTC was
unwarranted and excessive.

GATX and its subsidiaries are engaged in various matters of litigation including
but not  limited  to  those  matters  described  above,  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
damages,  if  any,  required  to be paid by  GATX  and its  subsidiaries  in the
discharge of such liability 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.


                                       -8-






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:

                                                                Office
                                                                 Held
   Name                         Office Held                      Since     Age

Ronald H. Zech        Chairman, President and Chief Executive     1996      54
                         Officer

David M. Edwards      Vice President, Finance and                 1994      46
                         Chief Financial Officer

David B. Anderson     Vice President, Corporate Development,      1995      56
                         General Counsel and Secretary

William L. Chambers   Vice President, Human Resources             1993      60

Gail L. Duddy         Vice President, Compensation and            1997      45
                         Benefits

Ralph L. O'Hara       Controller and Chief Accounting Officer     1986      53

Brian A. Kenney       Vice President and Treasurer                1997      38

Officers  are elected  annually by the Board of Directors.  Previously, Mr. Zech
was President of GATX Financial Services from 1985 to 1994. In 1994 Mr. Zech was
elected as President and Chief Operating Officer of GATX. On January 1, 1996, he
was elected as Chief  Executive  Officer and  on  April 26, 1996, Chairman.  Mr.
Edwards was Senior Vice President - Finance and Administration of GATX Financial
Services  from  1990  to  1994.   Mr.  Anderson  was  Vice  President, Corporate
Development, General Counsel and Secretary of Inland Steel  Industries from 1986
until 1995.  Concurrently, he served as President of Inland Engineered Materials
Corporation.  Mr. Chambers was  engaged in human  resource  consulting from 1991
until 1993.  Ms. Duddy joined  GATX in 1992 as  Director of  Compensation and in
1995 also assumed responsibility for the benefits  function.  Prior to coming to
GATX, Ms. Duddy served as a Senior Compensation Consultant at William M. Mercer,
Inc.  Mr. Kenney was Managing Director, Corporate  Finance and  Banking, for AMR
Corporation from 1990-1995.

PART II

Item 5. Market for the Registrant's Common Stock and Related Shareholder Matters
- --------------------------------------------------------------------------------
Information required by this item is contained in Exhibit 13, GATX Annual Report
to  Shareholders  for the year  ended  December  31,  1997 on page 61,  which is
incorporated  herein by reference  (page  reference  is to the Annual  Report to
Shareholders).

Item 6.  Selected Financial Data
- --------------------------------
Information required by this item is contained in Exhibit 13, GATX Annual Report
to Shareholders  for the year ended December 31, 1997, on pages 62 and 63, which
is incorporated herein by reference (page references are to the Annual Report to
Shareholders).


                                       -9-






Item 7.  Management  Discussion and Analysis of Financial  Condition and Results
         of Operations
- --------------------------------------------------------------------------------
Information  required by this item is contained in Item 1, Business,  section of
this document and in Exhibit 13, GATX Annual Report to Shareholders for the year
ended December 31, 1997, the management discussion and analysis of 1997 compared
to 1996 on pages 31, 32, 33, 39, 41, 43 and 44, the  financial  data of business
segments on pages 34 through 37, and the  management  discussion and analysis of
1996 compared to 1995 on pages 64, 65, and 66, which is  incorporated  herein by
reference (page references are to the Annual Report to Shareholders).

Item 8.  Financial Statements and Supplementary Data
- ----------------------------------------------------
The following consolidated financial statements of GATX Corporation, included in
Exhibit 13, GATX Annual Report to  Shareholders  for the year ended December 31,
1997,  which is  incorporated  herein by reference  (page  references are to the
Annual Report to Shareholders):

   Statements of Consolidated  Operations and Reinvested Earnings -- Years ended
      December 31, 1997, 1996 and 1995 on page 38.
   Consolidated  Balance Sheets -- December 31, 1997 and 1996, on page 40.
   Statements of Consolidated  Cash Flows -- Years ended December 31, 1997, 1996
      and 1995, on page 42.
   Notes to Consolidated Financial Statements on pages 46 through 60.

Quarterly  results of operations are contained in Exhibit 13, GATX Annual Report
to  Shareholders  for the year  ended  December  31,  1997 on page 61,  which is
incorporated  herein by reference  (page  reference  is to the Annual  Report to
Shareholders).

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 17, 1998,  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 17, 1998,  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 17,  1998,  which  sections  are  incorporated  herein by
reference.



Item 13.  Certain Relationships and Related Transactions
- --------------------------------------------------------
None.

PART IV

Item 14.  Financial Statement Schedules, Reports on Form 8-K and Exhibits.
- --------------------------------------------------------------------------
(a)         1.        -Financial Statements

                      The following  consolidated  financial  statements of GATX
                      Corporation  included in the Annual Report to Shareholders
                      for the  year  ended  December  31,  1997,  are  filed  in
                      response to Item 8:

                                      -10-





                      Statements  of  Consolidated   Operations  and  Reinvested
                           Earnings -- Years ended  December 31, 1997,  1996 and
                           1995
                      Consolidated Balance Sheets -- December 31, 1997 and 1996
                      Statements of Consolidated Cash Flows -- Years ended
                           December 31, 1997, 1996 and 1995
                      Notes to Consolidated Financial Statements

            2.        -Financial Statement Schedules:                       Page

                      Schedule I        Condensed Financial
                                            Information of Registrant........18

                      Schedule II       Valuation and Qualifying Accounts....22

                      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

               GATX filed a report on Form 8-K on December  8, 1997,  under Item
               5., Other Events.

(c)            Exhibit Index

Exhibit
Number            Exhibit Description                                       Page

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  and  restated as of
                  July 29, 1994,  incorporated  by  reference  to GATX's  Annual
                  Report on Form 10-K for the  fiscal  year ended  December  31,
                  1994, file number 1-2328.


                                      -11-





Exhibit
Number            Exhibit Description                                       Page

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, 1996,  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
                  submitted to the SEC along with the electronic transmission of
                  this Annual Report on Form 10-K.

10C.              GATX Corporation  Deferred Fee Plan for Directors,  as Amended
                  and Restated as of October 25, 1996, incorporated by reference
                  to GATX's Annual Report on Form 10-K for the fiscal year ended
                  December 31, 1996, 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.


                                      -12-





Exhibit
Number           Exhibit Description                                        Page

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.             Directors'  Deferred  Stock  Plan  approved  on  July  26,1996,
                 effective as of April 26, 1996, Summary of Plan 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.             Agreement for Continued  Employment Following Change of Control
                 or Disposition  of a Subsidiary  between GATX  Corporation  and
                 certain  executive  officers  dated  as  of  January  1,  1998,
                 submitted to the SEC along with the  electronic  submission  of
                 this Report on Form 10-K.

10L.             Letter Agreement dated August 17, 1993 between William Chambers
                 and GATX,  incorporated by reference to GATX's Quarterly Report
                 on Form 10-Q for the quarterly period ended June 30, 1995, file
                 number 1-2328.

10M.             Letter  Agreement  dated May 31, 1995 between David B. Anderson
                 and GATX,  incorporated by reference to GATX's Annual Report on
                 Form 10-K for the fiscal year ended  December  31,  1995,  file
                 number 1-2328.

10N.             Arrangements  between James J. Glasser and GATX associated with
                 Mr.  Glasser's  retirement from GATX as described on page 11 in
                 the  Section of the GATX Proxy  Statement  dated March 13, 1996
                 entitled  "Termination  of  Employment  and  Change of  Control
                 Arrangements"  are  incorporated  herein by reference  thereto,
                 file number 1-2328.

11A.             Statement regarding computation of per share earnings.     23

11B.             Statement regarding computation of per share earnings
                 (assuming dilution)                                        24

12.              Statement regarding computation of ratios of earnings
                 to combined fixed charges and preferred stock dividends.   25


                                      -13-






Exhibit
Number           Exhibit Description                                        Page

13.              Annual Report to  Shareholders  for the year ended December 31,
                 1997,  pages 29 - 70, with respect to the Annual Report on Form
                 10-K for the fiscal year ended  December 31, 1997,  file number
                 1-2328.   Submitted  to  the  SEC  along  with  the  electronic
                 submission of this Report on Form 10-K.

21.              Subsidiaries of the Registrant.                             26

23.              Consent of Independent Auditors.                            27

24.              Powers of Attorney  with  respect to the Annual  Report on Form
                 10-K for the fiscal year ended  December 31, 1997,  file number
                 1-2328.   Submitted  to  the  SEC  along  with  the  electronic
                 submission of this Report on Form 10-K.

27.              Financial  Data  Schedule for GATX  Corporation  for the fiscal
                 year ended December 31, 1997, 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.

99C.             Undertakings   to  the  GATX   Logistics   Inc.   401(k)   Cash
                 Accumulation  Plan  incorporated  by  reference to the Form S-8
                 Registration  Statement  filed  with  the SEC on June  19,1996,
                 Registration No.33-06315.

99D.             Undertakings  to the Centron DPL Company,  Inc.  Profit Sharing
                 Plan  Plan   incorporated   by   reference   to  the  Form  S-8
                 Registration Statement filed with the SEC on December 23, 1997,
                 Registration No.33-43113.




                                      -14-







REPORT OF INDEPENDENT AUDITORS




To the Shareholders
and Board of Directors
GATX Corporation


We have audited the consolidated  financial  statements and related schedules of
GATX Corporation and subsidiaries listed in Item 14 (a)(1) and (2) of the Annual
Report on Form 10-K of GATX  Corporation  for the year ended  December 31, 1997.
These financial  statements and related schedules are the  responsibility of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
financial statements and related schedules based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  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 and related  schedules.
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 consolidated  financial statements referred to above present
fairly, in all material  respects,  the consolidated  financial position of GATX
Corporation  and  subsidiaries at December 31, 1997 and 1996, and the results of
their  operations and their cash flows for each of the three years in the period
ended  December 31, 1997,  in  conformity  with  generally  accepted  accounting
principles.  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 27, 1998



                                      -15-







                                                    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 19, 1998

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.


            /s/Ronald H. Zech
            -----------------
             Ronald H. Zech                 Chairman, President and
             March 19, 1998                 Chief Executive Officer


           /s/David M. Edwards
           -------------------
             David M. Edwards               Vice President Finance and
              March 19, 1998                Chief Financial Officer

            /s/Ralph L. O'Hara
            ------------------
              Ralph L. O'Hara               Controller and
               March 19, 1998               Chief Accounting Officer


     James M. Denny             Director          By     /s/David B. Anderson
                                                     ---------------------------
     Richard Fairbanks          Director                    David B. Anderson
     William C. Foote           Director                    (Attorney in Fact)
     Deborah M. Fretz           Director
     Richard A. Giesen          Director
     Miles L. Marsh             Director
     Charles Marshall           Director
     Michael E. Murphy          Director
                                                         Date:  March 19, 1998



                                      -16-










           SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                                GATX CORPORATION
                                (PARENT COMPANY)

                            STATEMENTS OF OPERATIONS

                                  (In Millions)




                                                                                 Year Ended December 31
                                                                      ------------------------------------------
                                                                         1997              1996             1995
                                                                        -----            ------            -----

                                                                                                     
Gross income (loss)                                                   $   1.4           $  (1.3)        $   (1.0)

Costs and expenses
     Interest                                                            31.7              30.6             31.7
     Provision for depreciation                                           1.0               1.0               .8
     Selling, general and administrative                                 21.2              16.0             20.4
                                                                      -------           -------         --------

                                                                         53.9              47.6             52.9
                                                                      -------           -------         --------

Loss before income taxes and share of net (loss)
     income of subsidiaries                                             (52.5)            (48.9)           (53.9)

Income tax benefit                                                      (18.2)            (17.7)           (21.3)
                                                                      -------           -------         --------

Loss before share of net (loss) income
     of subsidiaries                                                    (34.3)            (31.2)           (32.6)

Share of net (loss) income of subsidiaries                              (16.6)            133.9            133.4
                                                                      -------           -------          -------


Net (loss) income                                                      $(50.9)           $102.7           $100.8
                                                                       ======            ======           ======

















                                      -18-









       SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (CONT'D)

                                GATX CORPORATION
                                (PARENT COMPANY)

                            STATEMENTS OF CASH FLOWS
                                  (In Millions)


                                                                                  Year Ended December 31
                                                                    ---------------------------------------------
                                                                       1997                1996             1995
                                                                    --------            --------        ---------


                                                                                                    
OPERATING ACTIVITIES
     Net (loss) income                                              $ (50.9)            $ 102.7         $  100.8
     Adjustments to reconcile net (loss)
         income to net cash provided by
         operating activities:
              Provision for depreciation                                1.0                 1.0               .8
              Deferred income tax benefit                              (7.9)               (6.8)           (10.8)
              Share of net (loss) income of subsidiaries
                  less dividends received                             112.6               (60.3)           (61.0)
     Other (includes working capital)                                  (3.5)              (23.5)            (4.3)
                                                                   --------            --------         --------
NET CASH PROVIDED BY
     OPERATING ACTIVITIES                                              51.3                13.1             25.5


INVESTING ACTIVITIES
     Additions to operating lease assets and facilities                   -                (1.8)             (.9)
                                                                   --------            --------         --------
NET CASH USED IN
     INVESTING ACTIVITIES                                                 -                (1.8)             (.9)

FINANCING ACTIVITIES
     Issuance of Common Stock under
         employee benefit programs and other                           12.4                 3.1              5.5
     Cash dividends to shareholders                                   (49.4)              (48.0)           (45.3)
     Advances (to) from subsidiaries                                  (13.4)               33.4             14.5
                                                                   --------            --------         --------

NET CASH USED IN
     FINANCING ACTIVITIES                                             (50.4)              (11.5)           (25.3)
                                                                   --------            --------         --------


NET INCREASE (DECREASE)
     IN CASH AND CASH EQUIVALENTS                                 $      .9           $     (.2)      $      (.7)
                                                                  =========           =========       ==========





                                      -19-









       SCHEDULE I - CONDENSED FINANCIAL INFORMATION OF REGISTRANT (CONT'D)

                                GATX CORPORATION
                                (PARENT COMPANY)

                                 BALANCE SHEETS

                                  (In Millions)



ASSETS

                                              December 31
                                        ----------------------
                                           1997        1996
                                        ----------  ----------

                                                     
Cash and cash equivalents               $      1.1  $       .2

Operating lease assets and facilities         11.0        10.9
Less - Allowance for depreciation             (4.4)       (3.4)
                                        ----------   ---------
                                               6.6         7.5

Investment in subsidiaries                 1,141.4     1,283.3

Other assets                                  13.9        22.0













TOTAL ASSETS                            $  1,163.0  $  1,313.0
                                        ==========  ==========




                                      -20-




















LIABILITIES, DEFERRED ITEMS AND SHAREHOLDERS' EQUITY

                                                       December 31
                                                ----------------------
                                                   1997         1996
                                                ----------  ----------

                                                             
Accounts payable and accrued expenses           $     10.2  $     16.6

Due to subsidiaries                                  478.7       492.1

Other deferred items                                  18.7        29.4
                                                ----------  ----------

     Total liabilities and deferred items            507.6       538.1


Shareholders' equity:
     Preferred Stock                                     -         3.4
     Common Stock                                     17.0        14.4
     Additional capital                              339.7       329.0
     Reinvested earnings                             363.4       463.7
     Cumulative unrealized equity adjustments        (17.9)       11.4
                                                ----------  ----------

                                                     702.2       821.9
     Less - Cost of shares in treasury               (46.8)      (47.0)
                                                ----------  ----------


     Total shareholders' equity                      655.4       774.9
                                                ----------  ----------

TOTAL LIABILITIES, DEFERRED ITEMS
     AND SHAREHOLDERS' EQUITY                   $  1,163.0  $  1,313.0
                                                ==========  ==========





                                      -21-









                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                        GATX CORPORATION AND SUBSIDIARIES
                                  (In Millions)

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


     COL. A                                   COL. B          COL.              COL. D           COL. E            COL. F

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



                                                                              Additions
     DESCRIPTION                            Balance at      Charged to        Charged to                         Balance
                                            Beginning       Costs and       Other Accounts-    Deductions-       at End
                                            of Period         Expenses         Describe         Describe         of Period

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



                                                                                                      
Year ended December 31, 1997:
     Allowance for possible
         losses - Note A                      $ 121.1           $  11.1    $    3.3 (B)       $   (7.0) (C)      $ 128.5

Year ended December 31, 1996:
     Allowance for possible
         losses - Note A                      $ 100.0           $  12.5    $   15.5 (B)       $   (6.9) (C)      $ 121.1

Year ended December 31, 1995:
     Allowance for possible
         losses - Note A                      $  89.6           $  18.4    $    5.2 (B)       $  (13.2) (C)      $ 100.0


<FN>

Note A - Deducted from asset accounts.
Note B - Represents principally recovery of amounts previously written off.
Note C - Represents principally reductions in asset values charged off or transferred to claims and uncollectible amounts.

</FN>




                                      -22-














                                                                                                                        EXHIBIT 11A

                        GATX CORPORATION AND SUBSIDIARIES

                  COMPUTATION OF NET (LOSS) INCOME PER SHARE OF
                                  COMMON STOCK
                     (In Millions, Except Per Share Amounts)



                                                         




                                                   Year Ended December 31
                                     ---------------------------------------------
                                       1997       1996      1995     1994     1993
                                     ------     ------    ------   ------   ------



                                                                
Average number of shares
     of Common Stock outstanding       22.5       20.2      20.0     19.9     19.6

Net (loss) income                  $  (50.9) $   102.7 $   100.8 $   91.5 $   72.7
Deduct - Dividends paid and
     accrued on Preferred Stock         6.7       13.2      13.2     13.3     13.3
                                   --------  --------- --------- -------- --------

Net (loss) income, as adjusted     $  (57.6) $    89.5 $    87.6 $   78.2 $   59.4
                                   ========  ========= ========= ======== ========

Net (loss) income per share        $  (2.55) $    4.43 $    4.38 $   3.94 $   3.03
                                   ========  ========= ========= ======== ========



                                      -23-









                                                                                                                        EXHIBIT 11B
                        GATX CORPORATION AND SUBSIDIARIES

         COMPUTATION OF NET (LOSS) INCOME PER SHARE OF COMMON STOCK AND
                   COMMON STOCK EQUIVALENTS ASSUMING DILUTION
           (PRINCIPALLY CONVERSION OF ALL OUTSTANDING PREFERRED STOCK)
                     (In Millions, Except Per Share Amounts)


                                                                                     Year Ended December 31
                                                            -------------------------------------------------------------------
                                                             1997            1996           1995           1994           1993
                                                            ------          ------         ------         ------         ------


                                                                                                            
Average number of shares used to
     compute basic earnings per share                         22.5            20.2           20.0           19.9          19.6
Shares issuable upon assumed exercise
     of stock options, reduced by the
     number of shares which could have
     been purchased with the proceeds
     from exercise of such options                               *              .3             .4             .3             *
Common Stock issuable upon assumed
     conversion of Preferred Stock                               *             4.0            4.0            4.0             *
                                                           -------         -------        -------         ------        ------

Total                                                         22.5            24.5           24.4           24.2          19.6
                                                           =======         =======        =======         ======        ======

Net (loss) income as adjusted
     per basic computation                                  $(57.6)        $  89.5        $  87.6         $ 78.2        $ 59.4
Add - Dividends paid and
     accrued on Preferred Stock                                  *            13.2           13.2           13.3             *
                                                            ------         -------        -------         ------        ------

Net (loss) income, as adjusted                              $(57.6)        $ 102.7        $ 100.8         $ 91.5        $ 59.4
                                                            ======         =======        =======         ======        ======

Net (loss) income per share,
     assuming dilution                                      $(2.55)        $  4.20        $  4.14         $ 3.79        $ 3.03
                                                            ======         =======        =======         ======        ======
<FN>

* Exercise  of options  and  conversion  of  Preferred  Stock is  excluded  from
computation of diluted earnings because of antidilutive effects.
</FN>

Additional diluted computation (1)
     Average number of shares used to
         compute basic earnings per share                     22.5                                                        19.6
     Common stock issuable upon assumed
         conversion of Preferred Stock, and
         stock option exercises                                2.3                                                         4.3
                                                           -------                                                      ------

                                                              24.8                                                        23.9
                                                            ======                                                      ======
     Net (loss) income as adjusted
         per basic computation                             $ (57.6)                                                     $ 59.4
     Add - Dividends paid and accrued
         on Preferred Stock                                    6.7                                                        13.3
                                                           -------                                                      ------

                                                           $ (50.9)                                                     $ 72.7
                                                           =======                                                      ======
     Net (loss) income per share,
         assuming dilution                                 $ (2.05)                                                     $ 3.04
                                                           =======                                                      ======
<FN>

(1)    This calculation is submitted in accordance with Regulation S-K item 601(b)(11) although it is contrary 
       to paragraph 40 of APB Opinion No. 15 because it produces an antidilutive result.
</FN>


                                      -24-








                                                                                                                         EXHIBIT 12

                        GATX CORPORATION AND SUBSIDIARIES

           COMPUTATION OF RATIOS OF EARNINGS TO COMBINED FIXED CHARGES
                          AND PREFERRED STOCK DIVIDENDS
                         (In Millions Except For Ratios)

                                                       1997       1996      1995      1994      1993
                                                     --------   --------  --------  --------  --------


                                                                                    
Earnings available for fixed charges:
   Net (loss) income                                 $  (50.9)  $  102.7  $  100.8  $   91.5  $   72.7
Add:
   Income taxes (benefit) expense                        (5.5)      54.4      47.6      48.8      51.4
   Equity in net earnings of affiliated companies,
       net of distributions received                     40.7        8.0       6.5       3.7       8.0
   Interest on indebtedness and amortization
       of debt discount and expense                     222.4      202.8     170.1     148.2     151.8
   Amortization of capitalized interest                   1.4        3.7       1.1       1.1       1.1
   Portion of rents representative of
       interest factor (deemed to be one-third)          62.2       56.7      43.9      37.9      31.4
                                                     --------   --------  --------  --------  --------

Total earnings available for fixed charges           $  270.3   $  428.3  $  370.0  $  331.2  $  316.4
                                                     ========   ========  ========  ========  ========

Preferred dividend requirements                      $    6.7   $   13.2  $   13.2  $   13.3  $   13.3
Ratio to convert preferred
   dividends to pretax basis (A)                          107%       173%      169%      171%      197%
                                                     --------   --------  --------  --------  --------

Preferred dividend factor on pretax basis                 7.2       22.8      22.3      22.7      26.2

Fixed charges:
   Interest on indebtedness and amortization
       of debt discount and expense                     222.4      202.8     170.1     148.2     151.8
   Capitalized interest                                   2.5        6.8       6.2       3.0       2.7
   Portion of rents representative of interest
       factor (deemed to be one-third)                   62.2       56.7      43.9      37.9      31.4
                                                     --------   --------  --------  --------  --------

Combined fixed charges and
   preferred stock dividends                         $  294.3   $  289.1  $  242.5  $  211.8  $  212.1
                                                     ========   ========  ========  ========  ========

Ratio of earnings to combined fixed charges
   and preferred stock dividends (B)                    .92x (C)   1.48x     1.53x     1.56x     1.49x
<FN>


(A)    To adjust  preferred  dividends to a pretax  basis,  (loss) income before
       income  taxes and  equity in net  earnings  of  affiliated  companies  is
       divided by (loss)  income  before  equity in net  earnings of  affiliated
       companies.
(B)    The ratios of earnings  to combined  fixed  charges and  preferred  stock
       dividends  represent  the number of times  "fixed  charges and  preferred
       stock dividends" were covered by "earnings." "Fixed charges and preferred
       stock dividends"  consist of interest on outstanding debt and capitalized
       interest, one-third (the proportion deemed representative of the interest
       factor) of  rentals,  amortization  of debt  discount  and  expense,  and
       dividends  on  preferred  stock  adjusted to a pretax  basis.  "Earnings"
       consist of  consolidated  net (loss) income before income taxes and fixed
       charges,  less equity in net  earnings of  affiliated  companies,  net of
       distributions received.
(C)    In 1997,  net loss  included  restructuring  charges  of $162.8  million.
       Excluding the charges,  the "ratio of earnings to combined  fixed charges
       and preferred  stock  dividends"  was 1.66x.  See Note P -  Restructuring
       Charges on page 60 of the Company's 1997 Annual Report to Shareholders.
</FN>


                                      -25-







                                                                      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 of
incorporation of each:

General American  Transportation  Corporation  (New  York)--includes  4 domestic
     subsidiaries, 4 foreign subsidiaries and interests in 2 foreign affiliates,
     Business Segment--Railcar Leasing and Management
GATX Financial Services,  Inc. (Delaware) -- 64  domestic   subsidiaries  (which
     includes GATX Capital Corporation), 13 foreign subsidiaries,  interests  in
     6 domestic  affiliates  and 5  foreign  affiliates,   Business    Segment--
     Financial Services
GATX Terminals Corporation (Delaware)--3  domestic   subsidiaries,   3   foreign
     subsidiaries,  an  interest  in  1  domestic   affiliate   and  13  foreign
     affiliates, Business Segment--Terminals and Pipelines
GATX  Logistics,  Inc.  (Florida) --7   domestic   subsidiaries  and  2  foreign
     subsidiaries  and an  interest in 1  foreign  affiliate, Business Segment--
     Logistics and Warehousing
American  Steamship  Company  (New  York)--12  domestic  subsidiaries,  Business
     Segment--Great Lakes Shipping




                                      -26-







                                                                      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.  33-06315 on Form S-8 filed June 19, 1996; and (vii)  Registration
Statement No. 33-43113 on Form S-8 filed December 23, 1997 of GATX  Corporation,
of our report dated January 27, 1998 with respect to the consolidated  financial
statements and schedules of GATX  Corporation  included  and/or  incorporated by
reference  in the  Annual  Report on Form 10-K for the year ended  December  31,
1997.


                                                           ERNST & YOUNG LLP




Chicago, Illinois
March 16, 1998



                                      -27-



EXHIBITS FILED WITH DOCUMENT

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
                  submitted to the SEC along with the electronic transmission of
                  this Annual Report on Form 10-K.

10K.             Agreement for Continued  Employment Following Change of Control
                 or Disposition  of a Subsidiary  between GATX  Corporation  and
                 certain  executive  officers  dated  as  of  January  1,  1998,
                 submitted to the SEC along with the  electronic  submission  of
                 this Report on Form 10-K.

11A.             Statement regarding computation of per share earnings.     

11B.             Statement regarding computation of per share earnings
                 (assuming dilution)                                        

12.              Statement regarding computation of ratios of earnings
                 to combined fixed charges and preferred stock dividends.   

13.              Annual Report to  Shareholders  for the year ended December 31,
                 1997,  pages 29 - 70, with respect to the Annual Report on Form
                 10-K for the fiscal year ended  December 31, 1997,  file number
                 1-2328.   Submitted  to  the  SEC  along  with  the  electronic
                 submission of this Report on Form 10-K.

21.              Subsidiaries of the Registrant.                             

23.              Consent of Independent Auditors.                            

24.              Powers of Attorney  with  respect to the Annual  Report on Form
                 10-K for the fiscal year ended  December 31, 1997,  file number
                 1-2328.   Submitted  to  the  SEC  along  with  the  electronic
                 submission of this Report on Form 10-K.

27.              Financial  Data  Schedule for GATX  Corporation  for the fiscal
                 year ended December 31, 1997, file number 1-2328.  Submitted to
                 the SEC along with the electronic  submission of this Report on
                 Form 10-K.