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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549





FORM 10-Q





(Mark One)

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

For the quarterly period ended September 30, 2008

OR



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

For the transition period from  to

Commission file number: 1-5666





UNION TANK CAR COMPANY

(Exact name of registrant as specified in its charter)







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



|                                                    |  |           
|--------------------------------------------------- |  | ----------
|181 W. Madison Street, 26thFloor, Chicago, Illinois |  | 60602-4510
|(Address of principal executive offices)            |  | (Zip Code)

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





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes   ̈    No  x *

* NOTE: The registrant is not subject to the
filing requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934. The registrant is a voluntary filer.

Indicate by check mark
whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting
company in Rule 12b-2 of the Exchange Act.



|                        |  |                                                   |  |                           |  |  
|----------------------- |  | ------------------------------------------------- |  | ------------------------- |  | -
|Large accelerated filer |  |  ̈                                                 |  | Accelerated filer         |  |  ̈
|                        |  |                                                   | 
|Non-accelerated filer   |  | x  ((Do not check if a smaller reporting company) |  | Smaller reporting company |  |  ̈

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

There is no voting stock held by non-affiliates of the registrant.









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UNION TANK CAR COMPANY AND SUBSIDIARIES

FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30,
2008

INDEX



|                              |  |          |  |                                                                                                             |  |     
|----------------------------- |  | -------- |  | ----------------------------------------------------------------------------------------------------------- |  | ----
|                              |  |          |  |                                                                                                             |  | Page
|Part I. Financial Information |  |         
|                              |  |          | 
|                              |  | Item 1.  |  | Financial Statements                                                                                        |  | 3   
|                              |  |          | 
|                              |  |          |  | Condensed consolidated statements of income -three and nine month periods ended September 30, 2008 and 2007 |  | 3   
|                              |  |          | 
|                              |  |          |  | Condensed consolidated balance sheets -September 30, 2008 and December 31, 2007                             |  | 4   
|                              |  |          | 
|                              |  |          |  | Condensed consolidated statements of cash flows -nine months ended September 30, 2008 and
2007              |  | 5   
|                              |  |          | 
|                              |  |          |  | Notes to condensed consolidated financial statements                                                        |  | 6   
|                              |  |          | 
|                              |  | Item 2.  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                       |  | 12  
|                              |  |          | 
|                              |  | Item 3.  |  | Quantitative and Qualitative Disclosures About Market Risk                                                  |  | 20  
|                              |  |          | 
|                              |  | Item 4.  |  | Controls and Procedures                                                                                     |  | 20  
|                              | 
|Part II. Other Information    |  |         
|                              |  |          | 
|                              |  | Item 1.  |  | Legal Proceedings                                                                                           |  | 21  
|                              |  |          | 
|                              |  | Item 1A. |  | Risk Factors                                                                                                |  | 21  
|                              |  |          | 
|                              |  | Item 2.  |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                 |  | *   
|                              |  |          | 
|                              |  | Item 3.  |  | Defaults Upon Senior Securities                                                                             |  | *   
|                              |  |          | 
|                              |  | Item 4.  |  | Submission of Matters to a Vote of Security Holders                                                         |  | *   
|                              |  |          | 
|                              |  | Item 5.  |  | Other Information                                                                                           |  | *   
|                              |  |          | 
|                              |  | Item 6.  |  | Exhibits                                                                                                    |  | 21  
|                              | 
|Signatures                    |  | 22      



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



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PART I. FINANCIAL INFORMATION



|ITEM 1. | FINANCIAL STATEMENTS
|------- | --------------------

UNION TANK
CAR COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Dollars in Thousands)

(Unaudited)



|                                                    |  |                                 |         |                                |      |   |         |  |   |           |   |  |   |          
|--------------------------------------------------- |  | ------------------------------- | ------- | ------------------------------ | ---- | - | ------- |  | - | --------- | - |  | - | ---------
|                                                    |  | Three Months EndedSeptember 30, |         | Nine Months EndedSeptember 30,
|                                                    |  | 2008                            |         |                                | 2007 |   | 2008    |  |   | 2007     
|Revenues                                            |  |                                 |         |                                |      |   |         |  |   |           |   |  |   |          
|Services (leasing and other)                        |  | $                               | 250,834 |                                |      | $ | 230,852 |  | $ | 738,964   |   |  | $ | 661,978  
|Sales                                               |  |                                 | 338,795 |                                |      |   | 277,295 |  |   | 966,102   |   |  |   | 873,973  
|                                                    |  |                                 |         |                                |      |   |         |  |   |           |   |  |   |          
|                                                    |  |                                 | 589,629 |                                |      |   | 508,147 |  |   | 1,705,066 |   |  |   | 1,535,951
|Costs and expenses                                  |  |                                 |         |                                |      |   |         |  |   |           |   |  |   |          
|Cost of services                                    |  |                                 | 132,816 |                                |      |   | 117,633 |  |   | 391,351   |   |  |   | 356,684  
|Cost of sales                                       |  |                                 | 286,081 |                                |      |   | 229,266 |  |   | 798,431   |   |  |   | 705,530  
|Closure costs - railcar manufacturing facility      |  |                                 | 564     |                                |      |   |        |  |   | 26,876    |   |  |   |         
|General and administrative                          |  |                                 | 42,214  |                                |      |   | 38,075  |  |   | 126,974   |   |  |   | 110,353  
|Interest expense                                    |  |                                 | 26,990  |                                |      |   | 31,437  |  |   | 79,155    |   |  |   | 88,397   
|                                                    |  |                                 |         |                                |      |   |         |  |   |           |   |  |   |          
|                                                    |  |                                 | 488,665 |                                |      |   | 416,411 |  |   | 1,422,787 |   |  |   | 1,260,964
|                                                    |  |                                 |         |                               
|Operating income                                    |  |                                 | 100,964 |                                |      |   | 91,736  |  |   | 282,279   |   |  |   | 274,987  
|                                                    |  |                                 |         |                               
|Interest income                                     |  |                                 | 1,454   |                                |      |   | 3,616   |  |   | 6,276     |   |  |   | 10,304   
|Other income, net                                   |  |                                 | 1,863   |                                |      |   | 1,273   |  |   | 5,855     |   |  |   | 3,729    
|                                                    |  |                                 |         |                                |      |   |         |  |   |           |   |  |   |          
|Income before income taxes and minority interest    |  |                                 | 104,281 |                                |      |   | 96,625  |  |   | 294,410   |   |  |   | 289,020  
|                                                    |  |                                 |         |                               
|Provision for income taxes                          |  |                                 | 47,811  |                                |      |   | 40,916  |  |   | 125,816   |   |  |   | 119,645  
|                                                    |  |                                 |         |                                |      |   |         |  |   |           |   |  |   |          
|Income before minority interest                     |  |                                 | 56,470  |                                |      |   | 55,709  |  |   | 168,594   |   |  |   | 169,375  
|                                                    |  |                                 |         |                               
|Minority interest                                   |  |                                 | 2,475   |                                |      |   | 2,568   |  |   | 7,579     |   |  |   | 7,145    
|                                                    |  |                                 |         |                                |      |   |         |  |   |           |   |  |   |          
|Net income                                          |  |                                 | 53,995  |                                |      |   | 53,141  |  |   | 161,015   |   |  |   | 162,230  
|                                                    |  |                                 |         |                               
|Other comprehensive (losses) income                 |  |                                 |         |                                |      |   |         |  |   |           |   |  |   |          
|Unrealized (losses) gains on securities, net of tax |  |                                 | (15     | )                              |      |   | 30      |  |   | (44       | ) |  |   | 41       
|                                                    |  |                                 |         |                                |      |   |         |  |   |           |   |  |   |          
|Comprehensive income                                |  | $                               | 53,980  |                                |      | $ | 53,171  |  | $ | 160,971   |   |  | $ | 162,271  
|                                                    |  |                                 |         |                                |      |   |         |  |   |           |   |  |   |          

See notes to condensed consolidated financial statements.



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UNION TANK CAR COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollars
in Thousands)



|                                                                               |  |                   |           |   |                  |   |           |  
|------------------------------------------------------------------------------ |  | ----------------- | --------- | - | ---------------- | - | --------- | -
|                                                                               |  | September 30,2008 |           |   | December 31,2007 |  
|                                                                               |  | (Unaudited)       |           |   |                  |  
|Assets                                                                         |  |                   |           |   |                  |   |           |  
|                                                                               |  |                  
|Cash and cash equivalents                                                      |  | $                 | 138,296   |   |                  | $ | 122,114   |  
|Short-term investments                                                         |  |                   |          |   |                  |   | 172,335   |  
|Accounts receivable, net of allowances of $5,336 ($6,079 at December 31, 2007) |  |                   | 263,396   |   |                  |   | 209,034   |  
|Accounts and notes receivable, affiliate                                       |  |                   | 43,695    |   |                  |   | 43,990    |  
|Inventories, net of LIFO reserves of $161,401 ($116,365 at December 31, 2007)  |  |                   | 232,298   |   |                  |   | 203,180   |  
|Prepaid expenses and deferred charges                                          |  |                   | 15,252    |   |                  |   | 12,442    |  
|Railcar lease fleet, net                                                       |  |                   | 3,393,713 |   |                  |   | 3,156,456 |  
|Intermodal tank container lease fleet, net                                     |  |                   | 418,983   |   |                  |   | 374,828   |  
|Other fixed assets, net                                                        |  |                   | 276,417   |   |                  |   | 290,995   |  
|Other assets                                                                   |  |                   | 59,885    |   |                  |   | 53,170    |  
|                                                                               |  |                   |           |   |                  |   |           |  
|Total assets                                                                   |  | $                 | 4,841,935 |   |                  | $ | 4,638,544 |  
|                                                                               |  |                   |           |   |                  |   |           |  
|                                                                               |  |                  
|Liabilities and Stockholders Equity                                           |  |                   |           |   |                  |   |           |  
|                                                                               |  |                  
|Accounts payable                                                               |  | $                 | 160,352   |   |                  | $ | 119,677   |  
|Accrued liabilities                                                            |  |                   | 215,307   |   |                  |   | 205,475   |  
|Advances from parent and affiliates                                            |  |                   | 1,139,738 |   |                  |   | 1,055,651 |  
|Debt, including $205,103 due within one year ($107,488 at December 31, 2007)   |  |                   | 1,045,129 |   |                  |   | 1,137,589 |  
|Deferred income taxes and investment tax credits                               |  |                   | 850,608   |   |                  |   | 745,901   |  
|                                                                               |  |                   |           |   |                  |   |           |  
|Total liabilities                                                              |  |                   | 3,411,134 |   |                  |   | 3,264,293 |  
|                                                                               |  |                  
|Minority interest                                                              |  |                   | 118,327   |   |                  |   | 110,748   |  
|                                                                               |  |                  
|Stockholders equity                                                           |  |                   |           |   |                  |   |           |  
|Common stock                                                                   |  |                   | 106,689   |   |                  |   | 106,689   |  
|Additional capital                                                             |  |                   | 169,455   |   |                  |   | 169,455   |  
|Retained earnings                                                              |  |                   | 1,036,479 |   |                  |   | 987,464   |  
|Accumulated other comprehensive losses                                         |  |                   | (149      | ) |                  |   | (105      | )
|                                                                               |  |                   |           |   |                  |   |           |  
|Total stockholders equity                                                     |  |                   | 1,312,474 |   |                  |   | 1,263,503 |  
|                                                                               |  |                   |           |   |                  |   |           |  
|Total liabilities and stockholders equity                                     |  | $                 | 4,841,935 |   |                  | $ | 4,638,544 |  
|                                                                               |  |                   |           |   |                  |   |           |  

See notes to condensed consolidated financial statements.



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UNION TANK CAR COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

(Unaudited)



|                                                                                  |  |                                |          |   |      |   |          |  
|--------------------------------------------------------------------------------- |  | ------------------------------ | -------- | - | ---- | - | -------- | -
|                                                                                  |  | Nine Months EndedSeptember 30, |         
|                                                                                  |  | 2008                           |          |   | 2007 |  
|Cash flows from operating activities:                                             |  |                                |          |   |      |   |          |  
|Net income                                                                        |  | $                              | 161,015  |   |      | $ | 162,230  |  
|Adjustments to reconcile net income to net cash provided by operating activities: |  |                                |          |   |      |   |          |  
|Depreciation and amortization                                                     |  |                                | 178,911  |   |      |   | 159,594  |  
|Deferred income taxes                                                             |  |                                | 106,497  |   |      |   | 55,438   |  
|Gains on disposition of lease fleet and other fixed assets                        |  |                                | (19,927  | ) |      |   | (21,074  | )
|Write-off of building and equipment                                               |  |                                | 10,905   |   |      |   |         |  
|Other non-cash income and expenses                                                |  |                                | 12,233   |   |      |   | 8,494    |  
|Changes in assets and liabilities                                                 |  |                                |          |   |      |   |          |  
|Accounts receivable                                                               |  |                                | (60,242  | ) |      |   | (25,914  | )
|Inventories                                                                       |  |                                | (28,743  | ) |      |   | 24,029   |  
|Prepaid expenses and deferred charges                                             |  |                                | (3,170   | ) |      |   | (2,341   | )
|Accounts payable and accrued liabilities                                          |  |                                | 51,533   |   |      |   | (37      | )
|                                                                                  |  |                                |          |   |      |   |          |  
|Net cash provided by operating activities                                         |  |                                | 409,012  |   |      |   | 360,419  |  
|                                                                                  |  |                               
|Cash flows from investing activities:                                             |  |                                |          |   |      |   |          |  
|Construction and purchase of lease fleet                                          |  |                                | (449,034 | ) |      |   | (513,570 | )
|Construction and purchase of other fixed assets                                   |  |                                | (24,271  | ) |      |   | (28,279  | )
|Proceeds from sales of available-for-sale securities                              |  |                                |         |   |      |   | 24,462   |  
|Purchases of short-term investments                                               |  |                                |         |   |      |   | (235,275 | )
|Proceeds from sales of short-term investments                                     |  |                                | 171,683  |   |      |   | 151,040  |  
|Increase in other assets                                                          |  |                                | (7,216   | ) |      |   | (2,163   | )
|Proceeds from disposals of lease fleet and other fixed assets                     |  |                                | 33,493   |   |      |   | 36,813   |  
|Purchases of businesses, net of cash acquired                                     |  |                                |         |   |      |   | (35,523  | )
|                                                                                  |  |                                |          |   |      |   |          |  
|Net cash used in investing activities                                             |  |                                | (275,345 | ) |      |   | (602,495 | )
|                                                                                  |  |                               
|Cash flows from financing activities:                                             |  |                                |          |   |      |   |          |  
|Increase in advances from parent and affiliates                                   |  |                                | 92,022   |   |      |   | 455,016  |  
|Principal payments of debt                                                        |  |                                | (92,460  | ) |      |   | (182,035 | )
|Cash dividends                                                                    |  |                                | (112,000 | ) |      |   | (113,000 | )
|                                                                                  |  |                                |          |   |      |   |          |  
|Net cash (used in) provided by financing activities                               |  |                                | (112,438 | ) |      |   | 159,981  |  
|                                                                                  |  |                               
|Effect of exchange rates on cash and cash equivalents                             |  |                                | (5,047   | ) |      |   | 24,656   |  
|                                                                                  |  |                                |          |   |      |   |          |  
|Net increase (decrease) in cash and cash equivalents                              |  |                                | 16,182   |   |      |   | (57,439  | )
|                                                                                  |  |                               
|Cash and cash equivalents at beginning of year                                    |  |                                | 122,114  |   |      |   | 165,588  |  
|                                                                                  |  |                                |          |   |      |   |          |  
|Cash and cash equivalents at end of period                                        |  | $                              | 138,296  |   |      | $ | 108,149  |  
|                                                                                  |  |                                |          |   |      |   |          |  
|Cash paid during the period for:                                                  |  |                                |          |   |      |   |          |  
|Interest                                                                          |  | $                              | 34,752   |   |      | $ | 46,301   |  
|Income taxes                                                                      |  |                                | 14,693   |   |      |   | 58,630   |  
|Non-cash item:                                                                    |  |                                |          |   |      |   |          |  
|Cumulative effect of adopting FIN 48                                              |  | $                              |         |   |      | $ | 17,073   |  

See notes to condensed consolidated financial statements.



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UNION TANK CAR COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in Thousands)

(Unaudited)



|1. | Ownership
|-- | ---------

UNION TANK CAR COMPANY (the
Company) is a wholly owned subsidiary of Marmon Holdings, Inc. (Holdings). On March 18, 2008, Berkshire Hathaway Inc. (Berkshire) purchased 60% of Holdings for $4,500,000. On April 30, 2008, Berkshire
purchased an additional 4.4% of Holdings for $329,000. After adjustments for other common share changes, Berkshire owns 63.6% of Holdings common stock as of September 30, 2008. The remaining shares of Holdings will be acquired by
Berkshire through staged acquisitions over a five to six year period for consideration based on future earnings of Holdings.

Prior to the
transactions discussed above, substantially all of the stock of Holdings was owned, directly or indirectly, by trusts for the benefit of certain members of the Pritzker family. As used herein, Pritzker family refers to the lineal
descendants of Nicholas J. Pritzker, deceased.



|2. | Basis of Presentation
|-- | ---------------------

The accompanying unaudited
condensed consolidated financial statements reflect all adjustments of a normal recurring nature necessary for a fair presentation of the results for the interim periods. These interim financial statements do not include all disclosures normally
provided in annual financial statements. Accordingly, they should be read in conjunction with the consolidated financial statements and notes thereto in the Companys Annual Report on Form 10-K for the year ended December 31, 2007.

The 2008 interim results presented herein are not necessarily indicative of the results of operations for the full year 2008.



|3. | Significant Accounting Policies
|-- | -------------------------------

Revenue Recognition

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



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|3. | Significant Accounting Policies (Continued)
|-- | -------------------------------------------



Lessor Accounting

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

The Company
periodically reviews and evaluates the ultimate realization of the receivables and properties under lease contracts. Allowances for losses are maintained at amounts necessary to cover anticipated losses based on managements assessment of
various factors, including loss experience and review of specific accounts.

Foreign Currency Translation

The Companys foreign operations use the local currency as their functional currency. Accordingly, assets and liabilities are translated at exchange
rates in effect at the balance sheet date. Average exchange rates are used for revenues, costs and expenses.

Foreign currency translation
adjustments and transaction gains and losses are borne by Holdings. For the nine months ended September 30, 2008 and 2007, Holdings absorbed a loss of $5,586 and a gain of $12,481, respectively.

Income Taxes

Federal, state, local and
foreign income taxes, in general, are reflected on the basis of individual company liabilities, except as follows: the Company and its more than 80% owned U.S. subsidiaries are included in the consolidated U.S. federal income tax return and certain
combined state income tax filings of Holdings; and under an arrangement with Holdings, federal income taxes, before consideration of tax credits, are computed as if the Company files a separate consolidated return. For this computation, the Company
generally uses tax accounting methods which minimize the current tax liability (these methods may differ from those used in the consolidated tax return). Tax liabilities are remitted to, and refunds are obtained from, Holdings on this basis. If
deductions and credits available to Holdings entire consolidated group exceed those which can be used on Holdings tax return, allocation of the related benefits between the Company and others will be at the sole discretion of Holdings.

The Company includes interest expense and penalties accrued on unrecognized tax benefits as a component of the provision for income taxes.
Interest income attributable to overpayments of income taxes is included in interest income.

The Companys federal and significant
foreign subsidiaries income tax returns have been audited through 2002. Numerous state jurisdictional audits are ongoing.



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|3. | Significant Accounting Policies (Continued)
|-- | -------------------------------------------



Accounts Receivable and Allowance for Doubtful Accounts

The Company carries its accounts receivable at their face amounts less an allowance for doubtful accounts. On a regular basis, the Company evaluates its
accounts receivable as well as establishes the allowance for doubtful accounts based on a combination of specific customer circumstances and credit conditions and based on a history of write-offs and collections. A receivable is considered past due
if payments have not been received within agreed upon invoice terms. Uncollectible receivables are charged against the allowance for doubtful accounts when approved by management after all collection efforts have been exhausted.

Inventories

Inventories are valued at the
lower of cost or market, using the first-in, first-out (FIFO) or last-in, first-out (LIFO) methods.



|                                |  |                   |          |   |                  |   |          |  
|------------------------------- |  | ----------------- | -------- | - | ---------------- | - | -------- | -
|                                |  | September 30,2008 |          |   | December 31,2007 |  
|Raw materials                   |  | $                 | 46,910   |   |                  | $ | 37,564   |  
|Work-in-process                 |  |                   | 38,367   |   |                  |   | 39,341   |  
|Finished goods                  |  |                   | 312,648  |   |                  |   | 247,972  |  
|Obsolescence and other reserves |  |                   | (4,226   | ) |                  |   | (5,332   | )
|                                |  |                   |          |   |                  |   |          |  
|                                |  |                   | 393,699  |   |                  |   | 319,545  |  
|LIFO reserve                    |  |                   | (161,401 | ) |                  |   | (116,365 | )
|                                |  |                   |          |   |                  |   |          |  
|Net                             |  | $                 | 232,298  |   |                  | $ | 203,180  |  
|                                |  |                   |          |   |                  |   |          |  

Property and Equipment

Property and equipment are depreciated or amortized over their useful lives primarily on the straight-line method based on managements estimates of
the period over which the assets will generate revenue. The Company periodically reviews these lives relative to physical factors, economic factors and industry trends. Gains and losses on disposals are included in cost of services or cost of sales.

Asset Impairment

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



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|3. | Significant Accounting Policies (Continued)
|-- | -------------------------------------------



Lease Fleet and Other Fixed Assets



|                                      |  |                   |            |   |                  |   |            |  
|------------------------------------- |  | ----------------- | ---------- | - | ---------------- | - | ---------- | -
|                                      |  | September 30,2008 |            |   | December 31,2007 |  
|Railcar lease fleet                   |  |                   |            |   |                  |   |            |  
|Gross cost                            |  | $                 | 5,343,073  |   |                  | $ | 5,056,138  |  
|Less accumulated depreciation         |  |                   | (1,949,360 | ) |                  |   | (1,899,682 | )
|                                      |  |                   |            |   |                  |   |            |  
|                                      |  | $                 | 3,393,713  |   |                  | $ | 3,156,456  |  
|                                      |  |                   |            |   |                  |   |            |  
|Intermodal tank container lease fleet |  |                   |            |   |                  |   |            |  
|Gross cost                            |  | $                 | 613,847    |   |                  | $ | 546,897    |  
|Less accumulated depreciation         |  |                   | (194,864   | ) |                  |   | (172,069   | )
|                                      |  |                   |            |   |                  |   |            |  
|                                      |  | $                 | 418,983    |   |                  | $ | 374,828    |  
|                                      |  |                   |            |   |                  |   |            |  
|Other fixed assets                    |  |                   |            |   |                  |   |            |  
|Gross cost                            |  | $                 | 725,538    |   |                  | $ | 711,627    |  
|Less accumulated depreciation         |  |                   | (449,121   | ) |                  |   | (420,632   | )
|                                      |  |                   |            |   |                  |   |            |  
|                                      |  | $                 | 276,417    |   |                  | $ | 290,995    |  
|                                      |  |                   |            |   |                  |   |            |  

Legal Matters

The Company and its subsidiaries are involved in a number of lawsuits and are subject to various claims. The Company has accrued its best estimate of such probable claims, and, in the opinion of management, their
ultimate resolution will not have a material adverse effect on the Companys consolidated financial position or results of operations.

Use of Estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally
accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.



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##### Table of Contents

|4. | Closure Costs  Railcar Manufacturing Facility
|-- | ----------------------------------------------

As a
result of a declining market for tank car sales and leases and long-term demand estimates, the Company announced on March 28, 2008 the closure of its railcar manufacturing facility in East Chicago, Indiana effective at the end of May 2008. The
charges related to the closure are detailed as follows:



|                                         |  |                                      |      |   |                                     |   |        |  
|---------------------------------------- |  | ------------------------------------ | ---- | - | ----------------------------------- | - | ------ | -
|                                         |  | Three Months EndedSeptember 30, 2008 |      |   | Nine Months EndedSeptember 30, 2008 |  
|Write-off of building and equipment      |  | $                                    |     |   |                                     | $ | 10,905 |  
|Severance and fringe benefits            |  |                                      | 83   |   |                                     |   | 11,224 |  
|Environmental related costs              |  |                                      | (368 | ) |                                     |   | 3,390  |  
|Reduction in post-retirement liabilities |  |                                      |     |   |                                     |   | (1,806 | )
|Relocation costs for equipment, etc.     |  |                                      | 829  |   |                                     |   | 1,955  |  
|Other                                    |  |                                      | 20   |   |                                     |   | 1,208  |  
|                                         |  |                                      |      |   |                                     |   |        |  
|Total                                    |  | $                                    | 564  |   |                                     | $ | 26,876 |  
|                                         |  |                                      |      |   |                                     |   |        |  

The Company estimates an additional $1,600 of period expense will be incurred over the remainder of
2008 for this closure.



|5. | Segment Information
|-- | -------------------

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



|                                                 |  |                       |       |                    |   |                                |  |           |       |                    |   |       |  |   |      
|------------------------------------------------ |  | --------------------- | ----- | ------------------ | - | ------------------------------ |  | --------- | ----- | ------------------ | - | ----- |  | - | -----
|                                                 |  | Railcar               |       | MetalsDistribution |   | IntermodalTankContainerLeasing |  | All Other |       | ConsolidatedTotals
|                                                 |  | (Dollars in Millions)
|Three months ended September 30, 2008            |  |                       |       |                    |   |                                |  |           |       |                    |   |       |  |   |      
|Services revenue                                 |  | $                     | 190.4 |                    | $ | 2.9                            |  | $         | 34.3  |                    | $ | 23.2  |  | $ | 250.8
|Sales revenue                                    |  |                       | 9.5   |                    |   | 273.5                          |  |           |      |                    |   | 55.8  |  |   | 338.8
|Income before income taxes and minority interest |  |                       | 69.4  |                    |   | 19.7                           |  |           | 11.8  |                    |   | 3.4   |  |   | 104.3
|                                                 |  |                       |       |                    |  
|Three months ended September 30, 2007            |  |                       |       |                    |   |                                |  |           |       |                    |   |       |  |   |      
|Services revenue                                 |  | $                     | 176.6 |                    | $ | 2.6                            |  | $         | 31.2  |                    | $ | 20.5  |  | $ | 230.9
|Sales revenue                                    |  |                       | 13.2  |                    |   | 224.6                          |  |           |      |                    |   | 39.5  |  |   | 277.3
|Income before income taxes and minority interest |  |                       | 62.7  |                    |   | 22.2                           |  |           | 11.4  |                    |   | 0.3   |  |   | 96.6 
|                                                 |  |                       |       |                    |  
|Nine months ended September 30, 2008             |  |                       |       |                    |   |                                |  |           |       |                    |   |       |  |   |      
|Services revenue                                 |  | $                     | 559.3 |                    | $ | 8.0                            |  | $         | 100.9 |                    | $ | 70.8  |  | $ | 739.0
|Sales revenue                                    |  |                       | 14.4  |                    |   | 790.1                          |  |           |      |                    |   | 161.6 |  |   | 966.1
|Income before income taxes and minority interest |  |                       | 168.5 |                    |   | 69.8                           |  |           | 37.1  |                    |   | 19.0  |  |   | 294.4
|                                                 |  |                       |       |                    |  
|Nine months ended September 30, 2007             |  |                       |       |                    |   |                                |  |           |       |                    |   |       |  |   |      
|Services revenue                                 |  | $                     | 505.6 |                    | $ | 7.2                            |  | $         | 91.0  |                    | $ | 58.2  |  | $ | 662.0
|Sales revenue                                    |  |                       | 29.4  |                    |   | 686.8                          |  |           |      |                    |   | 157.8 |  |   | 874.0
|Income before income taxes and minority interest |  |                       | 162.0 |                    |   | 70.7                           |  |           | 30.8  |                    |   | 25.5  |  |   | 289.0



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##### Table of Contents

|6. | Completed Contracts
|-- | -------------------

Certain projects are accounted for
using the completed contract method because of the inherent difficulty and uncertainty in estimating the total cost of completion and the extent of progress toward completion. Net billings in excess of costs included in accrued liabilities in the
condensed consolidated balance sheets are as follows:



|                                |  |                   |         |   |                  |   |        |  
|------------------------------- |  | ----------------- | ------- | - | ---------------- | - | ------ | -
|                                |  | September 30,2008 |         |   | December 31,2007 |  
|Costs incurred                  |  | $                 | 8,148   |   |                  | $ | 4,166  |  
|Deferred revenue                |  |                   | (12,913 | ) |                  |   | (5,975 | )
|                                |  |                   |         |   |                  |   |        |  
|Net billings in excess of costs |  | $                 | (4,765  | ) |                  | $ | (1,809 | )
|                                |  |                   |         |   |                  |   |        |  



|7. | Commitments and Contingencies
|-- | -----------------------------

The Companys Canadian
subsidiaries have a demand credit facility of approximately $33,800 available on a no-fee basis at September 30, 2008. Holdings is a guarantor of this demand credit facility. At September 30, 2008, $6,682 of letters of credit were
outstanding; no amounts were outstanding for overdrafts or borrowings.

As part of its risk management plan, the Company self-insures
certain levels of its property damage, general liability, products liability, health and workers compensation liabilities. The Company maintains no property damage insurance on its railcars or intermodal tank containers. The Company has
accrued for the estimated costs of reported claims, as well as incurred but not reported health and workers compensation claims.

The
Company has no environmental matters currently pending which are significant to the Companys results of operations or financial condition, either individually or in the aggregate. Based on information provided by environmental engineers,
management believes that amounts accrued for remedial activities and environmental liabilities (which in the aggregate are not material) are adequate.

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



|                             |  |                                |       |   |      |   |       |  
|---------------------------- |  | ------------------------------ | ----- | - | ---- | - | ----- | -
|                             |  | Nine Months EndedSeptember 30, |      
|                             |  | 2008                           |       |   | 2007 |  
|Balance at beginning of year |  | $                              | 1,715 |   |      | $ | 769   |  
|Warranties issued            |  |                                | 983   |   |      |   | 1,932 |  
|Settlements/reversals        |  |                                | (674  | ) |      |   | (969  | )
|                             |  |                                |       |   |      |   |       |  
|Balance at end of period     |  | $                              | 2,024 |   |      | $ | 1,732 |  
|                             |  |                                |       |   |      |   |       |  



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##### Table of Contents

|7. | Commitments and Contingencies (Continued)
|-- | -----------------------------------------



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

The Company has early buyout options for
railcars under certain sale-leaseback financing arrangements. The exercise price for these buyout options are $137,694, $29,351 and $92,055 in 2009, 2010 and 2012, respectively. The 2009 buyout options have been exercised and will be consummated in
the first quarter of 2009.



|8. | Consolidating Financial Information
|-- | -----------------------------------

In April 2008, the
Company paid off the remaining equipment trust certificates that required disclosure of condensed consolidating financial statements. Accordingly, this disclosure is no longer included.



|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|------- | -------------------------------------------------------------------------------------

The following discussion should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements and the related notes that appear elsewhere in this document as well as our Annual Report on Form
10-K for the year ended December 31, 2007 filed with the Securities and Exchange Commission (SEC) on March 20, 2008 and our quarterly reports for the periods ended March 31, 2008 and June 30, 2008 filed with the SEC
on May 12, 2008 and August 11, 2008, respectively.

Forward-Looking Statements

Certain statements contained in this quarterly report on Form 10-Q for the quarter ended September 30, 2008 may include certain forward-looking statements, within
the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including (without limitation) statements with respect to anticipated future operating and financial
performance, growth and acquisition opportunities and other similar forecasts and statements of expectation. Words such as expects, anticipates, intends, plans, believes, seeks,
estimates, and should and variations of these words and similar expressions, are intended to identify these forward-looking statements. Forward-looking statements made by the Company and its management are based on estimates,
projections, beliefs and assumptions of management at the time of such statements and are not guarantees of future performance. The Company disclaims any obligation to update or revise any forward-looking statement based on the occurrence of future
events, the receipt of new information or otherwise. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements made by the Company and its management as a result of a number of risks,
uncertainties and assumptions. In addition, certain factors, including risk factors identified in Item 1ARisk Factors in the Companys Annual Report on Form 10-K for the year ended December 31, 2007, may affect the
Companys businesses. As a result, past financial results may not be a reliable indicator of future performance.



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##### Table of Contents

Results of Operations

3rdQuarter 2008
versus 3rdQuarter 2007

Services revenue
and gross profit:

The equipment leasing businesses continued to perform well in all major markets. Demand for leased railcars and intermodal tank
containers remained strong, resulting in fleet growth, improved lease rental rates and continued high fleet utilization.

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



|                           |  |                        |         |   |      |   |         |          |  |   |       
|-------------------------- |  | ---------------------- | ------- | - | ---- | - | ------- | -------- |  | - | ------
|                           |  | 2008                   |         |   | 2007 |   |         | Increase
|                           |  | (Dollars in Thousands)
|Services revenue           |  | $                      | 250,834 |   |      | $ | 230,852 |          |  | $ | 19,982
|Cost of services           |  |                        | 132,816 |   |      |   | 117,633 |          |  |   | 15,183
|                           |  |                        |         |   |      |   |         |          |  |   |       
|Gross profit from services |  | $                      | 118,018 |   |      | $ | 113,219 |          |  | $ | 4,799 
|Gross profit %             |  |                        | 47      | % |      |   | 49      | %        |  |   |       

Services revenue in the third quarter of 2008 increased $20.0 million from the third quarter of 2007 due to $13.8
million higher railcar leasing and service revenues (higher lease rates and equipment additions), $3.0 million higher intermodal tank container leasing revenues (equipment additions, favorable foreign currency rates and higher lease rates), $1.7
million higher revenue in the contract rail switching business (higher volume) and $1.2 million higher revenue in the sulphur processing business (higher rates).

Gross profit on services revenue in the third quarter of 2008 increased $4.8 million from the third quarter of 2007 primarily due to a $2.8 million increase for railcar leasing (higher lease rates and equipment additions more than
offsetting lower disposal gains), a $1.2 million increase for the intermodal tank container leasing business (equipment additions, higher lease rates and favorable foreign currency rates) and a $0.8 million increase for the contract rail switching
business (higher volume).

Gains on disposals of lease fleet and other fixed assets, primarily on railcars and tank containers, totaled $6.7 million in the
third quarter of 2008 compared to $11.9 million in the third quarter of 2007. Gains on disposals are treated as a reduction to the cost of services.

The
gross profit margin on services revenue of 47% in the third quarter of 2008 decreased from 49% in the third quarter of 2007 primarily due to lower gains on disposals of lease fleet assets.

Average fleet utilization of the Companys railcar fleet was 98% for the third quarter of 2008 compared with 99% for the third quarter of 2007. Utilization rates of
the Companys existing railcars are driven by long-term requirements of manufacturers and shippers of chemical products, including liquid fertilizers, liquified petroleum gas and other petroleum and fuel products, food products, and bulk
plastics, and suitability of the Companys fleet to meet such demand. The potential impact of short-term fluctuations in demand is tempered by the longer-term nature of the leases.



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##### Table of Contents

Sales revenue and gross profit:

Demand for products of the metals distribution business remained strong. Demand for new railcars declined.

See Note 4 of
the Notes to the Condensed Consolidated Financial Statements with respect to the $0.6 million closure costs of the East Chicago, Indiana railcar manufacturing facility incurred in the third quarter of 2008.

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



|                        |  |                        |         |   |      |   |         |          |  |   |       
|----------------------- |  | ---------------------- | ------- | - | ---- | - | ------- | -------- |  | - | ------
|                        |  | 2008                   |         |   | 2007 |   |         | Increase
|                        |  | (Dollars in Thousands)
|Sales revenue           |  | $                      | 338,795 |   |      | $ | 277,295 |          |  | $ | 61,500
|Cost of sales           |  |                        | 286,081 |   |      |   | 229,266 |          |  |   | 56,815
|                        |  |                        |         |   |      |   |         |          |  |   |       
|Gross profit from sales |  | $                      | 52,714  |   |      | $ | 48,029  |          |  | $ | 4,685 
|Gross profit %          |  |                        | 16      | % |      |   | 17      | %        |  |   |       

Sales revenue for the third quarter of 2008 increased $61.5 million from the third quarter of 2007 due to $49.7
million higher sales of metals distribution products (higher prices more than offsetting lower volume), $4.8 million higher sales of sulphur processing equipment (completion of a project in the third quarter of 2008), $3.2 million higher sales of
containment vessel heads (higher volume), $2.7 million higher sales of gear drives (higher volume), $2.4 million higher sales of light rail transit products (higher volume) and $2.4 million higher sales of mobile railcar moving equipment (higher
volume). These increases were partially offset by a $3.7 million decrease in sales of manufactured railcars (lower sales volume).

Gross profit on sales
revenue in the third quarter of 2008 increased $4.7 million from the third quarter of 2007 primarily due to a $1.9 million increase for manufactured railcars (higher prices offsetting lower sales volume and higher costs), a $1.9 million increase for
containment vessel heads (higher volume), a $1.1 million increase for light rail transit products (higher volume) and a $0.7 million increase for mobile railcar moving equipment (higher volume). These increases were partially offset by a $1.0
million decrease for metals distribution products (lower volume and higher costs more than offsetting higher prices).

The gross profit margin on sales
revenue of 16% in the third quarter of 2008 decreased from 17% in the third quarter of 2007 primarily due to lower margins in the metals distribution business.

General and administrative expense, interest expense and income taxes:

General and administrative expenses in the third quarter of 2008
were $4.1 million higher than in the third quarter of 2007 primarily due to higher expenses for the metals distribution business.

Interest expense in the
third quarter of 2008 was $4.4 million lower than in the third quarter of 2007 due to $2.3 million lower interest expense on third-party debt as a result of principal repayments and $2.1 million lower interest expense on advances from parent and
affiliates as a result of lower interest rates more than offsetting higher balances.



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##### Table of Contents

The provision for income taxes of $47.8 million in the third quarter of 2008, with an effective tax rate of 45.9%,
compared with $40.9 million in the comparable 2007 quarter, with an effective tax rate of 42.3%. The increase in the effective tax rate was primarily the result of higher state income tax accruals.

Nine Months 2008 versus Nine Months 2007

Services revenue and
gross profit:

The equipment leasing businesses continued to perform well in all major markets. Demand for leased railcars and intermodal tank
containers remained strong, resulting in fleet growth, improved lease rental rates and continued high fleet utilization.

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



|                           |  |                        |         |   |      |   |         |          |  |   |       
|-------------------------- |  | ---------------------- | ------- | - | ---- | - | ------- | -------- |  | - | ------
|                           |  | 2008                   |         |   | 2007 |   |         | Increase
|                           |  | (Dollars in Thousands)
|Services revenue           |  | $                      | 738,964 |   |      | $ | 661,978 |          |  | $ | 76,986
|Cost of services           |  |                        | 391,351 |   |      |   | 356,684 |          |  |   | 34,667
|                           |  |                        |         |   |      |   |         |          |  |   |       
|Gross profit from services |  | $                      | 347,613 |   |      | $ | 305,294 |          |  | $ | 42,319
|Gross profit %             |  |                        | 47      | % |      |   | 46      | %        |  |   |       

Services revenue in the first nine months of 2008 increased $77.0 million from the first nine months of 2007 due
to $53.7 million higher railcar leasing and service revenues (higher lease rates and equipment additions), $9.9 million higher intermodal tank container leasing revenues (equipment additions, favorable foreign currency rates and higher lease rates),
$7.4 million higher revenue in the sulphur processing business (higher rates and higher volume) and $5.2 million higher revenue in the contract rail switching business (higher volume).

Gross profit on services revenue in the first nine months of 2008 increased $42.3 million from the first nine months of 2007 primarily due to a $31.7 million increase for railcar leasing (higher lease rates and
equipment additions more than offsetting higher maintenance expense), a $6.3 million increase for the intermodal tank container leasing business (equipment additions, favorable foreign currency rates and higher lease rates), a $2.3 million increase
for the sulphur processing business (higher rates and higher volume) and a $1.4 million increase for the contract rail switching business (higher volume).

Gains on disposals of lease fleet and other fixed assets, primarily on railcars and tank containers, totaled $19.9 million in the first nine months of 2008 compared to $21.1 million in the first nine months of 2007. Gains on disposals are
treated as a reduction to the cost of services.

The gross profit margin on services revenue of 47% in the first nine months of 2008 increased from 46% in
the first nine months of 2007 due to a higher margin in the railcar leasing business (higher lease rates and equipment additions more than offsetting higher maintenance expense) and a higher margin in the intermodal tank container leasing business
(favorable foreign currency rates and higher lease rates).



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##### Table of Contents

Average fleet utilization of the Companys railcar fleet was 98% for the first nine months of 2008 compared with 99%
for the first nine months of 2007. Utilization rates of the Companys existing railcars are driven by long-term requirements of manufacturers and shippers of chemical products, including liquid fertilizers, liquified petroleum gas and other
petroleum and fuel products, food products, and bulk plastics, and suitability of the Companys fleet to meet such demand. The potential impact of short-term fluctuations in demand is tempered by the longer-term nature of the leases.

Sales revenue and gross profit:

Demand for products
of the metals distribution business remained strong, although profit margins have weakened. Demand for new railcars declined.

See Note 4 of the Notes to
the Condensed Consolidated Financial Statements with respect to the $26.9 million closure costs of the East Chicago, Indiana railcar manufacturing facility incurred in the first nine months of 2008.

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



|                        |  |                        |         |   |      |   |         |                    |  |   |        |  
|----------------------- |  | ---------------------- | ------- | - | ---- | - | ------- | ------------------ |  | - | ------ | -
|                        |  | 2008                   |         |   | 2007 |   |         | Increase(Decrease) | 
|                        |  | (Dollars in Thousands) |        
|Sales revenue           |  | $                      | 966,102 |   |      | $ | 873,973 |                    |  | $ | 92,129 |  
|Cost of sales           |  |                        | 798,431 |   |      |   | 705,530 |                    |  |   | 92,901 |  
|                        |  |                        |         |   |      |   |         |                    |  |   |        |  
|Gross profit from sales |  | $                      | 167,671 |   |      | $ | 168,443 |                    |  | $ | (772   | )
|Gross profit %          |  |                        | 17      | % |      |   | 19      | %                  |  |   |        |  

Sales revenue for the first nine months of 2008 increased $92.1 million from the first nine months of 2007 due to
$104.5 million higher sales of metals distribution products (higher prices and higher volume including the volume impact of 2007 acquisitions), $8.6 million higher sales of containment vessel heads (higher volume), $6.8 million higher sales of gear
drives (higher volume), $5.1 million higher sales of light rail transit products (higher volume) and $4.9 million higher sales of mobile railcar moving equipment (higher volume). These increases were partially offset by $22.9 million lower sales of
sulphur processing equipment (completion of a large project in the first quarter of 2007) and a $15.0 million decrease in sales of manufactured railcars (lower sales volume).

Gross profit on sales revenue in the first nine months of 2008 decreased $0.8 million from the first nine months of 2007 primarily due to a $16.1 million decrease for sulphur processing equipment (completion of a
large project in the first quarter of 2007). This decrease was partially offset by a $4.0 million increase for metals distribution products (higher prices and higher volume including the volume impact of 2007 acquisitions, partly offset by higher
costs), a $3.1 million increase for containment vessel heads (higher volume), a $2.6 million increase for mobile railcar moving equipment (higher volume), a $2.2 million increase for gear drives (higher volume), a $2.2 million increase for light
rail transit products (higher volume) and a $1.9 million increase for manufactured railcars (higher prices offsetting lower sales volume and higher costs).

The gross profit margin on sales revenue of 17% in the first nine months of 2008 decreased from 19% in the first nine months of 2007 primarily due to the completion of the large sulphur processing equipment project in the first quarter of
2007, but was also impacted by lower margins for metals distribution products.



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##### Table of Contents

General and administrative expense, interest expense and income taxes:

General and administrative expenses in the first nine months of 2008 were $16.6 million higher than in the first nine months of 2007 primarily due to higher expenses for
the railcar leasing and metals distribution businesses, including the impact of March 2007 acquisitions.

Interest expense in the first nine months of 2008
was $9.2 million lower than in the first nine months of 2007 due to $7.3 million lower interest expense on third-party debt as a result of principal repayments and $1.9 million lower interest expense on advances from parent and affiliates as a
result of lower interest rates more than offsetting higher balances.

The provision for income taxes of $125.8 million for the first nine months of 2008,
with an effective tax rate of 42.7%, compared with $119.6 million in the comparable 2007 period, with an effective tax rate of 41.4%. The increase in the effective tax rate was the result of a reduction in the credit for foreign taxes paid.

Financial Condition and Liquidity

Nine Months 2008
versus Nine Months 2007

Net cash provided by operating activities, funds from the liquidation of short-term investments and advances from Holdings and
affiliates were used to finance additions to the lease fleet and other fixed assets, to service debt obligations and to pay dividends to the Companys stockholder.

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

Cash flows from operating activities:

Operating activities provided $409.0 million of net cash in the first nine months of 2008, compared
with $360.4 million provided in the first nine months of 2007. The net cash provided by operating activities was higher in 2008 primarily due to higher deferred income taxes and higher depreciation, more than offsetting net changes in operating
assets and liabilities.



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##### Table of Contents

Cash flows from investing activities:

Net cash used in investing activities was $275.3 million in the first nine months of 2008 compared with $602.5 million net cash used in the first nine months of 2007. The change in net cash related to investing
activities was primarily due to higher net sales of short-term investments in 2008 compared to 2007, lower capital expenditures for the lease fleet in 2008 compared with 2007 and purchases of businesses in 2007.

During the first nine months of 2008, the Company invested $449.0 million in the construction and purchase of lease fleet assets, compared with $513.6 million in 2007.
Since capital expenditures for railcars are generally incurred subsequent to receipt of firm customer lease orders, such expenditures are discretionary to the Company based on its desire to accept those lease orders. Capital expenditures for
intermodal tank containers are likewise discretionary in the intermodal tank container business.

During the first nine months of 2008, the Company
invested $24.3 million in the construction and purchase of other fixed assets, compared with $28.3 million in the first nine months of 2007.

During the
first nine months of 2008, the Company decreased its short-term investments by $171.7 million, compared to a net increase in short-term investments of $84.2 million in the first nine months of 2007. As of the end of September 2008, the Company had
no short-term investments or available-for-sale securities.

A subsidiary of the Company sold its remaining investments in Canadian short-term,
asset-backed commercial paper at carrying/maturity value of $61.3 million to an affiliated entity on February 29, 2008.

Proceeds from disposals of
lease fleet and other fixed assets were $33.5 million in the first nine months of 2008 compared with $36.8 million in the first nine months of 2007.

Cash flows from financing activities:

Net cash used in financing activities was $112.4 million in the first nine months of 2008 compared
with net cash provided by financing activities of $160.0 million in the first nine months of 2007 primarily due to a $92.0 million increase in advances from parent and affiliates in the first nine months of 2008 compared with a $455.0 million
increase in the comparable period in 2007. Partially offsetting the change in advances from parent and affiliates were lower principal payments of debt. Principal payments of debt totaled $92.5 million in the first nine months of 2008 compared with
$182.0 million in the first nine months of 2007. Cash dividends to Holdings were $112.0 million in the first nine months of 2008 compared with $113.0 million in the first nine months of 2007.

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



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New Accounting Pronouncements

In May 2008, the Financial Accounting Standards Board (FASB) issued two new statements, SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles and SFAS No. 163, Accounting for
Financial Guarantee Contracts - An Interpretation of FASB Statement No. 60. Neither of these statements is expected to have a material effect on the Companys consolidated financial statements.

In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities  an amendment of FASB Statement
No. 133 (SFAS 161). SFAS 161 requires enhanced disclosures about (a) how and why derivatives are used, (b) how derivative instruments and related hedged items are accounted for and (c) how derivative instruments
and related hedge items affect an entitys financial position, financial performance and cash flows. SFAS 161 is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. The adoption
of this statement is not expected to have a material effect on the Companys consolidated financial statements.

In December 2007, the FASB issued
SFAS Statement No. 160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51. This statement establishes accounting and reporting standards for noncontrolling interests (formerly known as
minority interests) in consolidated financial statements. This statement is effective in 2009 for the Company (early adoption is prohibited). This statement will revise the treatment of noncontrolling interests in consolidated balance sheets and
consolidated statements of income. Noncontrolling interests will become a part of stockholders equity in the consolidated balance sheets and consolidated income statements will report income attributable to the Company and to noncontrolling
interests separately. Any changes in ownership interests of a noncontrolling interest where the parent retains a controlling interest in the subsidiary are reported as equity transactions. When adopted, this statement is to be applied prospectively
at the beginning of the year, except that the presentation and disclosure requirements are applied retrospectively for all periods presented. The adoption of this statement is not expected to have a material effect on the Companys consolidated
financial statements.

In December 2007, the FASB issued SFAS Statement No. 141 Revised, Business Combinations. This statement modifies
Statement No. 141 but retains the fundamental requirements of Statement No. 141. This statement is effective for acquisitions on or after January 1, 2009 (early adoption is prohibited). This statement retains the purchase method of
accounting, with assets purchased and liabilities assumed in an acquisition valued at fair value, and broadens the scope of Statement No. 141. Certain costs, including acquisition costs and restructuring cost, are recognized separately from the
accounting for the business acquired. Also, accounting for step acquisitions, contingencies and bargain purchases has been modified.

In September 2006,
the FASB issued SFAS Statement No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans - an amendment of FASB Statements No. 87, 88, 106 and 132(R). This statement requires the recognition
of overfunded or underfunded status of defined benefit plans as an asset or liability and the recognition of changes in the funded status through comprehensive income, which was adopted by the Company at the end of 2007. The requirement to use the
Companys year-end as the measurement date is effective for fiscal years ending after December 15, 2008 which will be adopted by the Company in 2008, changing from the current measurement date of September 30. The effect of the change
in measurement date is not expected to have a material impact on the Companys consolidated financial statements.



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|ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|------- | ----------------------------------------------------------

There have
been no material changes during the first nine months of 2008 in the Companys disclosure of the quantitative and qualitative market risk contained in Item 7A of the Companys Annual Report on Form 10-K for the year ended
December 31, 2007.



|ITEM 4. | CONTROLS AND PROCEDURES
|------- | -----------------------

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

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

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



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PART II. OTHER INFORMATION



|ITEM 1. | LEGAL PROCEEDINGS
|------- | -----------------

Reference is made to Business -
Environmental Matters in Item 1 and Note 12 Contingencies of the Notes to Consolidated Financial Statements of the Companys Annual Report on Form 10-K for the year ended December 31, 2007 for a description of
certain environmental matters and Note 7 Commitments and Contingencies of the Notes to Condensed Consolidated Financial Statements in this Form 10-Q for the quarter ended September 30, 2008.



|ITEM 1A. | RISK FACTORS
|-------- | ------------

There have been no material changes in the
Companys risk factors from those disclosed in the Companys Annual Report on Form 10-K for the year ended December 31, 2007. In addition to the other information set forth in this report, you should carefully consider the risk
factors contained in such annual report, as such risks or other risks not currently known to the Company or that the Company does not currently deem material could materially affect the Companys business, financial condition or future results.



|ITEM 6. | EXHIBITS
|------- | --------



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

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



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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



|                         |  |                        |  |                                                               
|------------------------ |  | ---------------------- |  | --------------------------------------------------------------
|                         |  | UNION TANK CAR COMPANY
|                         | 
|                         |  | REGISTRANT            
|                         |  |                       
|Dated: November 10, 2008 |  | By:                    |  | /s/ Mark J. Garrette                                          
|                         |  |                        |  | Mark J. Garrette                                              
|                         |  |                        |  | Vice President                                                
|                         |  |                        |  | (Principal Financial Officer and Principal Accounting Officer)



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