-- Company to focus on rail, air, and technology leasing units
-- Core markets expected to remain challenging
-- New management reporting structure implemented
CHICAGO, Dec. 17 /PRNewswire-FirstCall/ -- 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.
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.
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.
Investor, corporate, financial, historical financial, photographic and
news release information may be found at http://www.gatx.com.
SOURCE GATX Corporation
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Related links:
http://www.gatx.com
Company News On-Call:
http://www.prnewswire.com/comp/105121.html
CONTACT:
Analysts & Investors, Robert C. Lyons, Vice
President, Investor Relations of GATX Corporation,
+1-312-621-6633, Investment Banking Contact for Sale of GATX
Ventures, Robert P. Rinek, Managing Director, +1-612-303-6306, or
Peter M. Gill, Managing Director, +1-612-303-6312, both of US
Bancorp Piper Jaffray
NOTE TO EDITORS: To be removed from the contact list or to
request additional copies of this release: Irma Dominguez,
+1-312-621-8799, irma.dominguez@gatx.com
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