CHICAGO, March 5 /PRNewswire/ -- GATX Corporation (NYSE: GMT) and GATX
Capital Corporation today reported on the conclusion of the second phase of a
trial in Federal District Court for the Northern District of California to
which GATX Capital is a party.
As noted in a press release issued February 20, 2001, GATX Capital is
party to litigation related to the modification of aircraft from passenger to
freighter configuration. The aircraft were modified by GATX/Airlog, a
California partnership in which a subsidiary of GATX Capital is a partner. In
the first phase of the trial, concluded on February 16, the jury found against
GATX/Airlog on two counts related to breach of contract and non-disclosure of
information.
Following the conclusion of the second phase of the trial, the jury
awarded damages to Kalitta Air in the amount of $47.5 million plus applicable
interest. Prior to the conclusion of the second phase of the trial, GATX
Capital agreed to settle a related dispute with Evergreen International
Airlines, Inc., which had also been a party in the litigation. Terms of the
settlement with Evergreen have not been disclosed.
GATX Corporation is in the process of determining the impact on its 2000
financial results arising from GATX/Airlog-related matters. Based on a
preliminary analysis, the net after-tax impact of the resolution of
GATX/Airlog-related matters, including required reserves and all prior
settlement expenses including Evergreen, is expected to be approximately
$100 million, excluding any post-judgment interest expense. This is an
estimation of GATX's maximum liability for all GATX/Airlog-related matters,
and does not reflect the fact that GATX will aggressively pursue all means of
loss recovery including appeals and insurance coverage.
Ronald H. Zech, chairman of GATX Corporation, stated, "We vehemently
disagree with the jury's findings and the subsequent damage award in this
litigation, and we plan to pursue appeals to address issues that arose before
and during this trial. At the same time, we also recognize that the
GATX/Airlog litigation has led to uncertainty with regards to the potential
financial impact on GATX Corporation. By providing an estimate of our maximum
potential liability for all GATX/Airlog matters, which if confirmed will be
manageable in the context of GATX's financial position and cash flow, we can
clarify the situation and address this uncertainty."
GATX Corporation's 2000 Annual Report on Form 10-K, incorporating the
reserve and settlement expenses, will be filed later in March in conjunction
with the distribution of the company's Annual Report to shareholders.
COMPANY DESCRIPTION
GATX Corporation (NYSE: GMT) is a unique finance and leasing company
combining asset knowledge and services, structuring expertise, creative
partnering and risk capital to serve customers and partners worldwide. GATX
Corporation provides leasing and financial services responsive to the
specialized needs of a range of businesses. GATX Corporation specializes in
railcar and locomotive operating leasing, aircraft operating leasing,
information technology leasing, and venture finance for customers in diverse
industrial sectors worldwide.
FORWARD LOOKING STATEMENTS
This press release includes statements which may constitute forward-
looking statements made pursuant to the safe harbor provision of the Private
Securities Litigation Reform Act of 1995. 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, including but not limited to, general conditions, including
demand and pricing in its primary rail, air, technology, and diversified
equipment leasing markets, opportunities for asset resale within these
markets, and stable labor conditions within the company's rail service
network. These factors and others could cause actual results to differ
materially from those projected.
Investor, corporate information and press releases may be found at
http://www.gatx.com . A variety of current financial information, historical
financial information, press releases and photographs are available at this
site. GATX press releases may be obtained by accessing PR Newswire's Company
News On-Call's automated fax service at 800-758-5804. The company
identification number for GATX is 105121.
SOURCE GATX Corporation
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http://www.gatx.com
Company News On-Call:
http://www.prnewswire.com/comp/105121.html or fax,
800-758-5804, ext. 105121
CONTACT:
Analysts and Investors, Robert C. Lyons,
312-621-6633, or Media, George S. Lowman, 312-621-6599, both of
GATX Corporation
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