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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
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PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported) December 17, 2002
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GATX Financial Corporation
(Exact Name of Registrant as Specified in its Charter)
Delaware 1-8319 94-1661392
(State or other jurisdiction of (Commission file number) (I.R.S. employer
incorporation) identification number)
500 West Monroe Street,
Chicago, Illinois 60661-3676
(Address of principal executive offices)
Registrant's telephone number, including area code (312) 621-6200
ITEM 5. OTHER EVENTS
GATX FINANCIAL CORPORATION IS A WHOLLY OWNED SUBSIDIARY OF GATX CORPORATION.
ON DECEMBER 17, 2002, GATX CORPORATION ISSUED THE FOLLOWING PRESS RELEASE:
GATX CORPORATION ANNOUNCES INTENT TO SELL GATX VENTURES AND FURTHER CURTAIL NEW
INVESTMENT IN SPECIALTY FINANCE SECTOR
- Company to focus on rail, air, and technology leasing units
- Core markets expected to remain challenging
- New management reporting structure implemented
CHICAGO, December 17 - GATX Corporation (NYSE:GMT) today announced that
it intends to sell GATX Ventures, its business unit that specializes in
providing secured financing to early stage companies. In addition, GATX
announced that it will further curtail new investment in its specialty finance
unit.
Ronald H. Zech, president and CEO of GATX Corporation, stated, "GATX
has recently been allocating most of its resources to the rail, air, and
technology leasing businesses which constitute 85% of our total asset base.
Today, we have taken further steps to concentrate more intently on the markets
where we possess both strong market positions and asset expertise. Additionally,
this will enable us to streamline our infrastructure and improve operating
efficiency. Greater focus and improved efficiency will be important in the near
term, as we now anticipate that difficult conditions in our markets will persist
throughout 2003 and earnings in our core businesses will face continued negative
pressure. Longer term, the steps announced today will better position GATX to
improve its performance when conditions in the underlying markets strengthen."
GATX Ventures, with assets of approximately $280 million, or 4% of
GATX's total asset base, has an extensive presence in the U.S. and business
partners in Canada and Europe. Mr. Zech added, "GATX Ventures is led by an
experienced management team, and the value of this franchise can be maximized by
placing it with an owner who is focused on growing this business." Absent a
sale, GATX will pursue other alternatives for exiting this business.
GATX has retained US Bancorp Piper Jaffray as an advisor in the sale
process. Questions from interested parties regarding GATX Ventures should be
directed to the US Bancorp Piper Jaffray representatives listed at the
conclusion of this release.
Page 2
GATX's specialty finance unit has approximately $800 million in assets
(10% of GATX's total) spread across a portfolio of diversified assets. GATX's
Corporate Finance group, in addition to managing third-party assets and pursuing
portfolio acquisitions that enhance core operations, will assume responsibility
for managing the remaining Specialty portfolio.
GATX expects that cash generated from the exit of its venture business
and the return of capital from the specialty unit will further strengthen the
company's liquidity position and will be used for reinvestment in its three core
business and for general corporate purposes.
In conjunction with this announcement, GATX is implementing a new
management reporting structure. Alan C. Coe, president of GATX Air, and Thomas
K. McGreal, president of GATX Technology, will join David M. Edwards, president
of GATX Rail, in reporting directly to Mr. Zech. Jesse V. Crews, previously the
president of GATX Capital, will be leaving GATX but will retain an interim
advisory role focused on strategic partner development.
GATX is also intensifying a review to optimize its cost structure while
providing the appropriate infrastructure to manage the exit from the venture
business, oversee the remaining specialty portfolio, and efficiently support
activities in its core markets. GATX anticipates that charges specific to the
steps announced today, such as those associated with staff reductions, will be
taken in the 2002 fourth quarter.
* Asset values are as of September 30, 2002
COMPANY DESCRIPTION
GATX Corporation (NYSE:GMT) is a specialized finance and leasing
company combining asset knowledge and services, structuring expertise,
partnering and risk capital to serve customers and partners worldwide. GATX
specializes in railcar and locomotive leasing, aircraft operating leasing, and
information technology leasing.
Page 3
FORWARD-LOOKING STATEMENTS
Certain statements within this document may constitute forward-looking
statements made pursuant to the safe harbor provision of the Private Securities
Litigation Reform Act of 1995. These statements are identified by words such as
"anticipate," "believe," "estimate," "expects," "intend," "predict," or
"project" and similar expressions. This information may involve risks and
uncertainties that could cause actual results to differ materially from the
forward-looking statements. Although the Company believes that the expectations
reflected in such forward-looking statements are based on reasonable
assumptions, such statements are subject to risks and uncertainties that could
cause actual results to differ materially from those projected. Risks and
uncertainties include, but are not limited to, general economic conditions;
aircraft and railcar lease rate and utilization levels; conditions in the
capital markets and the potential for a downgrade in our credit rating, either
of which could have an effect on our borrowing costs or our ability to access
the markets for commercial paper or secured and unsecured debt; dynamics
affecting customers within the chemical, petroleum and food industries;
unanticipated costs or issues arising from the Federal Railroad Administration's
Railworthiness Directive HM-04 or subsequent regulatory rulings that impact the
economic value of assets; competitors in the rail and air markets who may have
access to capital at lower costs that GATX; additional potential write-downs
and/or provisions within GATX's portfolio; impaired asset charges; and general
market conditions in the rail, air, technology, venture, and other large-ticket
industries.
FOR FURTHER INFORMATION CONTACT:
ANALYSTS & INVESTORS:
Robert C. Lyons
Vice President, Investor Relations
GATX Corporation
312-621-6633
INVESTMENT BANKING CONTACT FOR SALE OF GATX VENTURES:
Robert P. Rinek Peter M. Gill
Managing Director Managing Director
US Bancorp Piper Jaffray US Bancorp Piper Jaffray
612-303-6306 612-303-6312
TO BE REMOVED FROM THE CONTACT LIST OR TO REQUEST ADDITIONAL COPIES OF THIS
RELEASE:
Irma Dominguez
312-621-8799
irma.dominguez@gatx.com
Investor, corporate, financial, historical financial, photographic and news
release information may be found at www.gatx.com.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GATX FINANCIAL CORPORATION
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(Registrant)
/s/ Brian Kenney
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Brian A. Kenney
Senior Vice President and
Chief Financial Officer
(Duly Authorized Officer)
Date: December 17, 2002