SECURITIES AND EXCHANGE COMMISSION
                                   Washington, D.C.  20549


                                          Form 10-K
         X                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                              OF THE SECURITIES EXCHANGE ACT OF 1934

                          For the fiscal year ended December 31, 1995

                                             OR

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

                                Commission File Number 2-54754



                  GENERAL AMERICAN TRANSPORTATION CORPORATION

Incorporated in the                          IRS Employer Identification Number
 State of New York                                      36-2827991

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

           Securities  registered  pursuant to Section 12(b) of the Act:

                                       None


          Securities  registered  pursuant to Section 12(g) of the Act:

                                       None

    Indicate  by  check  mark  whether  the registrant (1) has filed all reports
required  to  be filed by Section  13 or 15(d) of the Securities Exchange Act of
1934  during  the  preceding  12 months  (or for  such  shorter period that  the
registrant was required to file such reports), and (2) has been subject to  such
filing requirements for the past 90 days.      Yes   X      No
                                                   ------      ------
    Registrant had 1,000 shares of common stock  outstanding  (all owned by GATX
Corporation) as of March 8, 1996.

    General American  Transportation  Corporation meets the conditions set forth
in General Instruction J(1) of Form 10-K and therefore is filing this  form with
the reduced disclosure format.



<PAGE>
PART I

Item 1.  Business

General American Transportation  Corporation (GATC) is a wholly-owned subsidiary
of GATX  Corporation  (GATX) and is engaged in the  leasing  and  management  of
railroad  tank cars and  specialized  freight  cars and owns and  operates  tank
storage terminals, pipelines and related facilities.

INDUSTRY SEGMENTS

                          RAILCAR LEASING AND MANAGEMENT

The Railcar Leasing and Management  segment  (Transportation),  headquartered in
Chicago,  Illinois,  is  principally  engaged in leasing  specialized  railcars,
primarily  tank cars,  under full service  leases.  As of December 31, 1995, its
domestic fleet consisted of approximately 64,900 railcars, including 53,900 tank
cars and 11,000 specialized freight cars, primarily Airslide covered hopper cars
and plastic pellet cars. In addition,  Transportation  has  approximately  1,500
railcars in its Mexican fleet.  Transportation  has upgraded its fleet over time
by adding new larger  capacity cars and retiring  older smaller  capacity  cars.
Transportation's  railcars have a useful life of  approximately  30 to 33 years.
The average age of the railcars in  Transportation's  fleet is  approximately 15
years.

The  following  table  sets forth the  approximate  tank car fleet  capacity  of
Transportation  as of the end of each of the years  indicated  and the number of
cars of all types added to Transportation's fleet during such years:
<TABLE>
<CAPTION>

                                                           Year Ended December 31,
                                                 -----------------------------------------
                                                  1995      1994     1993     1992    1991
                                                 -----     -----    -----    -----   -----
<S>                                              <C>       <C>      <C>        <C>     <C>
Tank car fleet capacity
  (in millions of gallons)                       1,176     1,090    1,024      993     977

Number of railcars added to domestic fleet       6,200     4,900    3,000    1,600   1,500
</TABLE>

Transportation's   customers  use  its  railcars  to  ship  over  700  different
commodities,  primarily chemicals,  petroleum,  food products and minerals.  For
1995, approximately 54% of railcar leasing revenue was attributable to shipments
of chemical products,  21% to petroleum products, 18% to food products and 7% to
other  products.  Many of these  products  require cars with  special  features;
Transportation  offers a wide  variety  of sizes and types of cars to meet these
needs.  Transportation  leases  railcars to over 700 customers,  including major
chemical,  oil, food and agricultural companies. No single customer accounts for
more than 4% of total railcar leasing revenue.

Transportation typically leases new railcars to its customers for a term of five
years or  longer,  whereas  renewals  or leases of used cars are  typically  for
periods  ranging from less than a year to seven years with an average lease term
of about three years. The utilization rate of Transportation's domestic railcars
as of December 31, 1995 was approximately 95%.


                                       -1-


<PAGE>

Under  its full  service  leases,  Transportation  maintains  and  services  its
railcars,  pays ad valorem taxes, and provides many ancillary services.  Through
its Car Status Service System, for example,  the company provides customers with
timely  information  about the  location  and  readiness of their leased cars to
enhance and maximize the  utilization  of this  equipment.  Transportation  also
maintains a network  of  major  service centers  consisting of four domestic and
one foreign service center, and 25 mobile trucks in 17 locations. Transportation
also utilizes independent third-party repair shops.

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

The full-service railcar leasing industry is comprised of Transportation,  Union
Tank Car Company,  General Electric Railcar Services  Corporation,  Shippers Car
Line division of ACF Industries,  Incorporated,  and many smaller companies.  Of
the  approximately  207,000  tank cars owned and leased in the United  States at
December  31,  1995,   Transportation   had  approximately   53,900.   Principal
competitive factors include price, service and availability.

                          TERMINALS AND PIPELINES

GATX Terminals Corporation  (Terminals) is engaged in the storage,  handling and
intermodal  transfer of petroleum and chemical  commodities at key points in the
bulk liquid  distribution  chain.  All of its  terminals  are located near major
distribution  and  transportation  points and most are capable of receiving  and
shipping bulk liquids by ship, rail, barge and truck.  Many of the terminals are
also linked with major interstate  pipelines.  In addition to storing,  handling
and transferring bulk liquids,  Terminals provides blending and testing services
at most of its facilities.  Terminals,  headquartered in Chicago, Illinois, owns
and  operates  28  terminals  in 11 states,  and eight  terminals  in the United
Kingdom.  Terminals  also  has  joint  venture  interests  in  14  international
facilities.  Additionally,  Terminals  owns or holds  interests  in four refined
product pipeline systems.

As of December 31, 1995,  Terminals had a total  storage  capacity of 75 million
barrels. This includes 55 million barrels of bulk liquid storage capacity in the
United States,  7 million barrels in the United Kingdom,  and an equity interest
in another 13 million  barrels of storage  capacity  in Europe and the Far East.
Terminals'  smallest  bulk  liquid  facility  has a storage  capacity  of 95,000
barrels while its largest facility,  located in Pasadena,  Texas, has a capacity
of over 12 million  barrels.  Capacity  utilization  at Terminals'  wholly owned
facilities  was 85% at the end of 1995;  throughput for the year was 655 million
barrels.

For 1995,  75% of Terminals'  revenue was derived from petroleum  products,  23%
from a variety of  chemical  products,  and 2% from other  products.  Demand for
Terminals'  facilities  is  dependent  in part upon  demand  for  petroleum  and
chemical  products and is also  affected by refinery  output,  foreign  imports,
availability  of other  storage  facilities,  and the expansion of its customers
into new geographical markets.

                                   -2-

<PAGE>

Terminals serves  approximately 300 customers,  including major oil and chemical
companies as well as trading firms and larger  independent  refiners.  No single
customer  accounts  for more than 5% of  Terminals'  revenue.  Customer  service
contracts  are both  short term and long  term.  Terminals  along with two Dutch
companies,  Paktank N.V. and Van Ommeren N.V., are the three major international
public  terminalling  companies.   The  domestic  public  terminalling  industry
consists of Terminals, Paktank Corporation,  International-Matex Tank Terminals,
and many  smaller  independent  terminalling  companies.  In  addition to public
terminalling companies, oil and chemical companies also have significant storage
capacity in their own private  facilities.  Terminals'  pipelines  compete  with
rail,  trucks and other  pipelines  for movement of liquid  petroleum  products.
Principal  competitive factors include price,  location relative to distribution
facilities, and service.

Trademarks, Patents and Research Activities
-------------------------------------------
Patents,  trademarks,  licenses, and research and development activities are not
material to these businesses taken as a whole.

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

Employees
---------
GATC and its subsidiaries have approximately 2,000 active employees, of whom 36%
are hourly employees covered by union contracts.

Item 2.  Properties
-------------------
Information  regarding the location and general character of certain  properties
of GATC is included in Item 1, Business, of this document.  The major portion of
Terminals' land is owned; the balance is leased.

Item 3.  Legal Proceedings
--------------------------
A railcar owned by  Transportation  was involved in a derailment  near Dunsmuir,
California, in July  1991  that  resulted  in a spill of metam  sodium  into the
Sacramento River.  Various lawsuits seeking damages in unspecified  amounts have
been filed against General American  Transportation  Corporation  (GATC),  or an
affiliated  company,  most of which have been consolidated in the Superior Court
of the State of California for the City and County of San Francisco  (Nos.  2617
and 2620).  GATC has now been dismissed by the class  plaintiffs in those cases,
and has resolved the claims of the plaintiffs who opted out of the class.  There
was one other case  seeking  recovery for  response  costs and natural  resource
damages:  State of California,  et al, vs. Southern Pacific, et al, filed in the
Eastern  District  of  California   (CIV-S-92  1117).  All  other  actions  were
consolidated  with  these  two  cases.  GATC  was also  named  as a  potentially
responsible  party by the State of California with respect to the assessment and
remediation  of  possible  damages to  natural  resources  which  claim was also
consolidated  in the suit in the Eastern  District of  California.  GATC has now
entered into settlement  agreements with the United States of America, the State
of  California,  Southern  Pacific and certain  other  defendants  settling  all
material  claims  arising out of the above incident in an amount not material to
GATC.

                                       -3-

<PAGE>

On July 14, 1995,  a judgment in the amount of $9.7 million was entered  against
GATC by the U.S.  District  Court for the  Northern  District of Illinois in the
matter  of  General   American   Transportation   Corporation   v.   Cryo-Trans,
Incorporated  (Case  No.  91  C  1305),  a  case  involving  an  alleged  patent
infringement by GATC in the construction and use of its ArcticarTM cryogenically
cooled railcar. That judgment has been reduced to approximately $9 million. GATC
was also permanently  enjoined from any further infringement of the patent as of
August 1, 1995,  subsequently  extended to September 1, 1995.  Of GATC's  65,000
railcar fleet,  the injunction  affected only 180 railcars,  80 of which were on
lease and 100 on  order.  GATC has  filed an  appeal  of the  decision  with the
Federal  Circuit Court of Appeals.  Even in the event of an adverse  decision on
appeal,  GATC does not believe the costs  associated with the disposition of the
affected cars will have a material adverse effect on GATC.

Various  lawsuits  have  been  filed  in  the  Superior  Court  for the State of
California and served upon Terminals,  Calnev Pipe Line Company, or another GATX
subsidiary  seeking an unspecified amount of damages arising out of the May 1989
explosion in San Bernardino, California. Those suits, all of which were filed in
the County of San Bernardino unless otherwise indicated, are: Aguilar, et al, v.
Calnev  Pipe Line  Company,  et al,  filed  February  1990 in the  County of Los
Angeles (No.  0751026);  Alba, et al, v. Southern  Pacific  Railroad Co., et al,
filed November 1989 (No.  252842);  Terry,  et al, v. Southern  Pacific,  et al,
filed December 1989 (No. 253604);  Charles, et al, v. Calnev Pipe Line, Inc., et
al,  filed  May  1990  (No.   256269);   Abrego,  et  al,  v.  Southern  Pacific
Transportation  Corporation,  et al, filed May 1990 in the County of Los Angeles
(No. BC 000947) and settled November,  1995; Glaspie, et al, v. Southern Pacific
Transportation,  et al,  filed  May  1990  in the  County  of Los  Angeles  (No.
BC002047) and settled November 1995; Burney, et al, v. Southern Pacific,  et al,
filed May 1990 in the County of Los  Angeles  (BC000876)  and settled  May,  95;
Ledbetter, et al, v. City of San Bernardino,  et al, filed May 1990 (No. 256173)
and settled  April,1995;  Mary Washington v. Southern Pacific,  et al, filed May
1990 (No.  256346);  Stewart,  et al, v. Southern  Pacific  Railroad Co., et al,
filed May 1990 (No. 256464);  Pearson v. Calnev Pipe Line Company,  et al, filed
May 1990 in the County of San  Bernardino  (No.  256206);  Pollack  v.  Southern
Pacific Transportation, et al, filed May 1992 (No. 271247); Davis v. Calnev Pipe
Line Company, et al, filed May 1990 (No. 256207); J. Roberts, et al, v. Southern
Pacific Transportation,  et al, filed November 1992 (No. 275936); Brooks, et al,
v. Southern  Pacific,  et al, filed May 1990 (No.  256176) and settled  February
1994;  Goldie, et al, v. Southern  Pacific,  et al, filed May 1990 and dismissed
July 1993, appeal pending; Irby, et al, v. Southern Pacific, et al, (No. 255715)
filed April 1990; Esparza, et al, v. Southern Pacific, et al, (No. 256433) filed
May 1990 and settled  February 1994;  Reese, et al, v. Southern  Pacific,  et al
(No. 256434) filed May 1990; Nancy Washington,  et al, v. Southern  Pacific,  et
al, (No. 256435) filed May 1990. As Terminals'  insurance  carriers have assumed
the defense of these lawsuits  without a reservation of rights and have paid all
of the  settlements  entered to date,  GATC  believes  that the  likelihood of a
material adverse effect on GATC's consolidated  financial position or operations
is remote.


Item 4.  Submission of Matters to a Vote of Security Holders

Not required.

PART II

Item 5.  Market for the Registrant's Common Stock and Related Shareholder
Matters

GATX Corporation owns all of the outstanding common stock of GATC.


                                        -4-

<PAGE>

Item 6.  Selected Financial Data

Not required.

Item 7.  Management's Discussion and Analysis of Financial Condition and Results
of Operations

GATC reported  record net income of $94 million for 1995 compared to $87 million
in 1994 and $74  million in 1993.  The  increase  was due to record  earnings at
Transportation  reflecting significant growth in the number of railcars on lease
and higher income on invested funds.  Terminals' net income  decreased  slightly
from 1994's record level as capacity utilization  declined at certain terminals.
This resulted from lower worldwide petroleum storage demand, significantly lower
utilization  of tanks in the  Northeast  due to reduced  buildup of heating  oil
inventories,  and lower demand and price  competition  in Los Angeles.  Chemical
markets,  pipelines and income from European  terminal joint  ventures  remained
strong.

Operating results at Transportation  improved in 1994 due to significantly  more
railcars on lease.  Terminals  reported record earnings in 1994 as the result of
increased  utilization  and  throughput.  Net  income  for 1993  was  negatively
impacted  by a charge of $7 million  for the  cumulative  increase  in  deferred
income  taxes as a result of the federal  income tax rate  increase  from 34% to
35%. The impact of the tax rate change by segment is shown on page 36.

GROSS INCOME

Consolidated gross income for 1995 of $709 million exceeded 1994 revenue of $643
million and 1993 revenue of $602 million.

Transportation's  gross income of $361 million  increased $39 million from 1994.
Rental  revenues  increased 12% due to the increase in the number of railcars on
lease,  higher average rental rates and new operations in Mexico.  At the end of
1995,  Transportation  had 61,400  railcars on lease in the United States versus
56,500 a year ago.  Domestic fleet utilization of 95% at the end of the year was
slightly  higher than the prior year due to the  continued  high demand for tank
cars. Over 6,200 new and used railcars were added to the domestic fleet in 1995,
which is 1,400 more than were added in 1994. In addition, 1,200 cars were leased
in from the Mexican National  Railroad.  Fleet additions in 1996 are expected to
be at lower levels than the exceptionally high level of railcars added in 1995.

Terminals'  gross  income of $313  million  increased  3% over  1994  reflecting
incremental revenues from newly-acquired terminals and strong petroleum activity
in the  first  half of 1995,  especially  in the Los  Angeles  market.  However,
revenues  in the  latter  part of the year were less than in 1994 as a result of
lower worldwide  petroleum  storage demand,  significantly  lower utilization of
tanks in the Northeast due to reduced  buildup of heating oil  inventories,  and
lower  demand and price  competition  in Los  Angeles.  Revenues  from  chemical
markets remained strong. Revenues at the two pipelines serving the Las Vegas and
Orlando  markets  continue  to  increase  as demand for clean  products  remains
strong.  The  non-strategic  Wyco  pipeline  was sold  early  in 1995.  Capacity
utilization  at Terminals'  wholly-owned  facilities  was 85% at the end of 1995
compared to 94% a year earlier,  reflecting  the effects of lower  industry-wide
petroleum  inventory  levels and tanks out of service for repairs and  upgrades.
Throughput  was 655 million  barrels  compared  to 671 million  barrels the year
before.  Incremental throughput from newly-acquired  terminals was offset by the
absence of throughput at Wyco. Lower overall  throughput  reflected mild weather
in early 1995,  lower  blending  activity,  refinery  turnarounds,  tanks out of
service, and a contract termination with a large customer.

                                         -5-

<PAGE>

Transportation's  1994 gross income of $322 million  increased  $20 million from
1993.  Rental  revenues  increased  7%  attributable  to  an  average  of  3,000
additional railcars on lease and slightly higher average fleet rental rates. The
level of fleet  additions  increased in response to improved demand for new tank
cars, which was expected to continue in 1995. At the end of 1994, Transportation
had 56,500  railcars  on lease  compared  to 51,900 at the end of 1993 and fleet
utilization was 95% compared to 93%.

Terminals'  record gross income of $303 million in 1994 was the result of strong
performance  at a number of  individual  terminal and pipeline  operations.  The
increase  of $22  million or 8% over 1993 was due to high  petroleum  demand and
improved  chemical  activity  which  resulted in both  increased  throughput and
higher utilization.  Capacity utilization at Terminals'  wholly-owned facilities
was 94% at the end of 1994  compared to 92% a year earlier.  Throughput  was 671
million barrels, up 6% from 1993, reflecting the overall improvement in the U.S.
economy.

COSTS AND EXPENSES

Operating   expenses   in  1995   increased   $19   million  or  7%  over  1994.
Transportation's  operating  expenses of $148 million increased $19 million over
1994 as a result of increased operating lease expense and increased fleet repair
costs due to the expanded fleet size.  Transportation  continues to utilize sale
leasebacks  to finance its railcar  additions.  The  leaseback is recorded as an
operating  lease which removes the asset and related  liability from the balance
sheet;  the payments under the operating  leases are recorded as operating lease
expense. Fleet repair costs increased 11% over 1994 as a result of the increased
fleet size and number of cars repaired,  primarily at  Transportation's  service
centers.   Transportation's  commitment  to  provide  its  customers  with  well
maintained railcars, coupled with stricter maintenance standards in the industry
and mandated inspection programs, will continue to increase repair costs. During
the year,  Transportation  completed  the  major  upgrade  program  for its four
domestic service centers.  This three year project was designed to control costs
by improving the efficiency and  productivity of the repair process and reducing
the time a car is out of service.  The number of cars  repaired at GATC  service
centers increased 15% from last year.  Average  throughput days for a railcar in
the repair  shop has been  reduced by almost 30% as a result of this  project to
approximately  32 days at year  end.  Terminals'  1995  operating  costs of $164
million approximated 1994 levels.

Operating   expenses   in  1994   increased   $21   million  or  8%  over  1993.
Transportation's  operating  expenses of $129 million increased $10 million from
1993 as a result of the increased  level of operating lease assets and increased
fleet repair  costs,  partially  offset by lower  environmental  expense.  Fleet
repair costs  increased 10% over 1993  reflecting  the increased  number of cars
repaired.  Operating  margins were in line with 1993.  Terminals' 1994 operating
costs of $164  million  increased  $11 million  over the prior  year.  Operating
expenses increased mainly due to higher repair and maintenance spending,  higher
environmental  costs  and  other  costs  as a  result  of  expanded  operations.
Operating  margins  increased 1% through revenue  improvement  while controlling
costs.

Interest  expense  increased $21 million in 1995 to $99 million as the result of
higher  average  debt  balances  to fund the growth of the  business  and higher
interest  rates.  Interest expense at Transportation increased primarily  due to
the increased fleet  size,  investments  in  GATC  service  centers, and the new
operations in Mexico.  Interest expense grew at Terminals as additional debt was
incurred  to  finance  acquisitions  as  well  as  maintenance,  regulatory  and
environmental expenditures.  Environmental and maintenance spending continue to 
grow in  keeping  with GATC's commitment to improve  terminalling  assets and to
operate its facilities in an environmentally responsible  manner.  The  increase
in interest rates had a minimal effect  on results as  assets  are either  match
funded or offer repricing opportunities as lease contracts are renewed.


                                         -6-

<PAGE>

Interest expense decreased slightly in 1994 to $78 million primarily as a result
of slightly lower average  interest rates,  partially offset by a higher average
debt  balance.  A portion of the  decrease in interest  expense was offset by an
increase in the operating lease rent component of operating expenses as a result
of the sale leasebacks at Transportation.

The  company  continues  to  utilize  interest  rate  swaps to better  match the
duration of the debt  portfolio to the terms of the railcar  leases and floating
rate  assets.  The effect of the swaps was to reduce  interest  expense in 1995,
1994 and 1993.

The provision for depreciation and amortization  increased $10 million from 1994
which in turn increased $7 million over 1993.  Depreciation expense increased as
result of the continued growth in assets and updated service centers.

Selling, general and administrative expenses of $55 million increased $8 million
from 1994 due to  increased  employee  costs,  information  systems  costs,  and
consulting  expenses.  In addition,  expenses  increased  related to new railcar
operations  in  Mexico.  SG&A  increased  $5 million  in 1994  primarily  due to
expanded  operations  and  higher  training  and  information  systems  costs at
Terminals.

Income tax expense of $47 million  increased $4 million from 1994. The effective
tax rate for 1995 and 1994 was 39% and 38%, respectively. The 1993 effective tax
rate of 43% exceeded the statutory  rate primarily as the result of the increase
in deferred taxes due to the increase in the federal income tax rate from 34% to
35%. The  effective  tax rate for all years was higher than the  statutory  rate
because of state taxes, minority interest, and nondeductible items.

EQUITY IN NET EARNINGS OF AFFILIATED COMPANIES

Equity in net  earnings of  affiliated  companies  of $20 million  increased  $3
million from 1994 which in turn  increased $2 million from 1993. The increase in
1995 was due to strong  chemical  demand at  Terminals'  European and  Singapore
terminals  and  Transportation's  Canadian  railcar  joint  venture.  Terminals'
newly-acquired  25% interest in the Olympic Pipeline Company also contributed to
the increase.  The increase in 1994 was primarily due to higher equity  earnings
from certain  European  terminals as a result of improved  results and favorable
foreign exchange rates.

NET INCOME

Consolidated  net income of $94 million in 1995  increased $7 million from 1994.
Transportation's  1995 net income  increased $8 million over 1994 reflecting the
higher  revenues,  the increase in income  generated  from invested funds due to
higher interest rates, and higher equity earnings from Transportation's Canadian
affiliate.  Operating  margins  improved  slightly  as the  growth  in  revenues
exceeded  the  increase  in fleet  repair  costs and SG&A  expense.  Pressure on
operating  margins is expected to continue as higher standards of repair without
compensating revenue increases characterize the industry today. Ownership costs,
consisting of rental expense,  depreciation  and interest,  increased 21% due to
the  increased  fleet size,  investments  in GATC service  centers,  and the new
operations in Mexico.


                                   -7-

<PAGE>

Terminals'  1995 net income  decreased  $1 million from 1994.  Higher  revenues,
slightly  improved   operating  margins  and  increased  earnings  from  foreign
affiliates  were  offset by higher  SG&A and  interest  expenses.  Overall,  the
continuing long-term focus on improving physical assets, information systems and
people may constrain near-term earnings. Terminals' business environment at year
end was characterized by continuing low distillate storage demand,  historically
low  petroleum  industry  inventory  levels,  lower  pricing  due  to  increased
competition and low refinery  margins.  This environment is expected to continue
into 1996.  Terminals plans to selectively acquire and construct facilities both
domestically and overseas.

Consolidated  net income of $87 million in 1994  increased $13 million from 1993
as a result of improved operating performance.  In addition, net income for 1993
was  reduced by a charge of $7 million for the  cumulative  increase in deferred
income taxes.  Transportation's  1994 income from  operations  increased 6% over
1993 due to  significantly  more railcars on lease.  Increased rental income and
lower  environmental  expense were  partially  offset by increased  fleet repair
costs,  higher  ownership costs and lower investment  earnings.  Ownership costs
increased 9% primarily  due to the high level of railcar  additions.  Terminals'
1994 income from operations  increased 11% from 1993 reflecting higher revenues,
slightly improved margins and increased earnings by its foreign affiliates which
were partially offset by higher SG&A expenses.

ASSETS

Total assets at year end of $2.6  billion were $164 million  higher than in 1994
as the high level of capital  additions and  investments in affiliates more than
offset the  depreciation of capitalized  assets.  GATC also utilizes  additional
railcars  which are  obtained  through  off-balance-sheet  operating  leases and
therefore are not included on the balance sheet.

Net  property,  plant and  equipment  increased  $100  million to $1.9  billion.
Transportation  invested $350 million in new and used  railcars,  $17 million in
new  operations in Mexico and $15 million in facility  improvements,  which were
partially offset by $250 million of railcar sale leasebacks. As these leasebacks
qualified as operating  leases,  the assets were removed from the balance sheet.
Terminals invested $129 million for tank construction, facility improvements and
expansion, and the acquisition of terminal facilities.

Investments in affiliated  companies  increased $39 million.  New investments of
$30 million  included an additional  investment in a European rail joint venture
and the  purchase  of a 25% equity  interest in the  Olympic  Pipeline  Company.
Equity  income  of $20  million  was  partially  offset  by $7  million  of cash
distributions and $4 million of unrealized translation losses and other charges.

LIABILITIES AND EQUITY

Total debt increased $118 million to fund a portion of the significant volume of
capital additions made during the year.

Consolidated  equity increased $37 million  attributable to 1995 earnings of $94
million  partially reduced by dividends paid to GATX Corporation of $48 million.
The  balance  of the change is  attributable  to  foreign  currency  translation
adjustments.

LIQUIDITY AND CAPITAL RESOURCES

GATC  generates  significant  cash from its  operating  activities.  Most of its
capital  requirements  represent  additions to the railcar  fleet,  terminal and
pipeline  facilities,  and  joint  ventures,  and are  considered  discretionary
capital expenditures. However, the non-discretionary level of Terminals' capital
program  has  grown  due  to  the  increasing   regulatory   and   environmental
requirements of the terminalling  business.  The level of discretionary  capital
spending  can be adjusted  as  conditions  in the  economy or GATC's  businesses
warrant.

                                       -8-

<PAGE>

Cash  provided by operating  activities  in 1995 of $211 million  increased  $10
million  compared to 1994. Net income adjusted for non-cash items generated $233
million of cash, up $24 million from 1994. Other generated $14 million less cash
than in 1994 primarily as a result of a decrease in working capital.

Cash  provided by  operating  activities  in 1994 of $201  million  decreased $5
million  compared to 1993. Net income adjusted for non-cash items generated $209
million of cash, up $16 million from 1993. Other generated $22 million less cash
in 1993 primarily as the result of a decrease in working capital.

Cash used in  investing  activities  in 1995  decreased  $32 million  from 1994.
Capital   additions   of  $541  million   increased   $101  million  from  1994.
Transportation  invested $365 million in its domestic railcar fleet; $28 million
also was  invested  in  international  operations  in Mexico and Europe in 1995.
During the year,  Transportation  completed a major upgrade program for its four
strategically  located domestic service centers.  Terminals' capital spending of
$149 million was $6 million  lower than in 1994.  Spending in 1995  included the
expansion or upgrading of several existing  terminal  facilities,  including the
expansion of an existing pipeline in Central Florida,  and the acquisition of an
interest in a pipeline in the  Northwest.  Proceeds from asset  dispositions  of
$271  million in 1995,  including  $250  million of sale  leasebacks  of certain
railcars at Transportation, increased $133 million from 1994. GATC has used sale
leasebacks  as  a  cost  effective  method  of  financing  assets  given  GATX's
alternative minimum tax position.

Cash used in  investing  activities  in 1994  increased  $181 million from 1993.
Capital additions of $440 million were up $167 million from 1993. Transportation
invested  $264  million in the railcar  fleet  versus $171  million in the prior
year;  $18 million also was invested in a  multi-year  program to  significantly
upgrade its repair  facilities  versus $24 million in 1993.  Terminals'  capital
spending of $154  million  increased  $77  million  from 1993 and  included  the
acquisition  of  six  additional  terminal  facilities  plus  the  expansion  or
upgrading  of  several  existing  terminal   facilities.   Proceeds  from  asset
dispositions  of $137 million in 1994 included a $130 million sale  leaseback of
certain railcars at Transportation.

Cash provided by financing  activities  was $58 million in 1995 compared to $104
million in 1994. GATC finances its capital additions through cash generated from
operating  activities,  debt  financings,  and the sale  leasebacks of railcars.
During the year $200  million of  long-term  debt was issued and $92  million of
long-term  obligations  were repaid.  Short-term debt increased $15 million to a
balance of $145 million.

Cash provided by financing  activities  was $104 million in 1994 compared to $79
million of cash used in financing  activities in 1993.  During 1994 $182 million
of  long-term  debt was issued and $56  million of  long-term  obligations  were
repaid. Short-term debt increased by $25 million to a balance of $129 million.

GATC and GATX  Terminals  have  revolving  credit  facilities.  GATC  also has a
commercial  paper program and  uncommitted  money market lines which are used to
fund operating  needs. In 1995, GATC amended its credit facility to extend until
2000.  Under the covenants of the  commercial  paper  programs and rating agency
guidelines, GATC must keep unused revolver capacity at least equal to the amount
of commercial  paper and money market lines  outstanding.  At December 31, 1995,
GATC and its  subsidiaries  had  available  unused  committed  lines  of  credit
amounting to $212 million.

In December 1995, a $650 million GATC shelf  registration for pass through trust
certificates and debt securities became effective;  none had been issued at year
end. At year end, GATC had $171 million of commitments to acquire assets, all of
which are scheduled to fund in 1996.

                                         -9-

<PAGE>

Environmental Matters

Certain  operations  of GATC and its  subsidiaries  (collectively  GATC) present
potential  environmental risks principally through the transportation or storage
of  various  commodities.  Recognizing  that  some  risk to the  environment  is
intrinsic to its operations, GATC is committed to protecting the environment, as
well as complying with applicable environmental protection laws and regulations.
GATC,  as well as its  competitors,  is subject to  extensive  regulation  under
federal,  state and local environmental laws which have the effect of increasing
the costs and  liabilities  associated  with the conduct of its  operations.  In
addition,  GATC's foreign operations are subject to environmental regulations in
effect in each respective jurisdiction.

GATC's  policy is to monitor and actively  address  environmental  concerns in a
responsible  manner.  GATC has  received  notices  from  the U.S.  Environmental
Protection  Agency (EPA) that it is a  potentially  responsible  party (PRP) for
study and  clean-up  costs at 11 sites  under the  requirements  of the  Federal
Comprehensive  Environmental  Response,  Compensation  and Liability Act of 1980
(Superfund).  Under Superfund and comparable state laws, GATC may be required to
share in the cost to clean-up various  contaminated  sites identified by the EPA
and  other  agencies.  In all  but one  instance,  GATC  is one of a  number  of
financially  responsible  PRPs and has been  identified as  contributing  only a
small  percentage  of the  contamination  at each of the  sites.  Due to various
factors such as the required level of remediation and  participation in clean-up
efforts  by  others,  GATC's  total  clean-up  costs at these  sites  cannot  be
predicted with  certainty;  however,  GATC's best estimates for  remediation and
restoration  of  these  sites  have  been  determined  and are  included  in its
environmental reserves.

Future costs of environmental compliance are indeterminable due to unknowns such
as the  magnitude  of  possible  contamination,  the  timing  and  extent of the
corrective  actions that may be required,  the  determination  of the  company's
liability in proportion to other  responsible  parties,  and the extent to which
such costs are recoverable from third parties including insurers. Also, GATC may
incur  additional  costs relating to facilities and sites where past  operations
followed  practices and procedures that were  considered  acceptable at the time
but in the future  may  require  investigation  and/or  remedial  work to ensure
adequate  protection to the environment  under current or future  standards.  If
future laws and regulations  contain more stringent  requirements than presently
anticipated,  expenditures  may be higher  than the  estimates,  forecasts,  and
assessments of potential  environmental  costs provided  below.  However,  these
costs are expected to be at least equal to the current level of expenditures. In
addition,  GATC has provided  indemnities for environmental issues to the buyers
of two divested companies for which GATC believes it has adequate reserves.

GATC's  environmental  reserve at the end of 1995 was $78 million  and  reflects
GATC's best  estimate of the cost to  remediate  its  environmental  conditions.
Additions to the reserve were $14 million in 1995 and $27 million in 1994;  1994
included  $13  million  recorded  in  conjunction  with  terminal  acquisitions.
Expenditures  charged to the reserve  amounted to $16 million and $12 million in
1995 and 1994, respectively.

In 1995,  GATC made capital  expenditures of $18 million for  environmental  and
regulatory  compliance  compared to $15 million in 1994. These projects included
marine vapor recovery,  discharge  prevention  compliance,  waste water systems,
impervious  dikes,  tank  modifications  for  emissions  control,  and  tank car
cleaning  systems.   Environmental   projects   authorized  or  currently  under
consideration would require capital expenditures of approximately $28 million in
1996. GATC anticipates it will make annual  expenditures at a similar level over
the next five years.


                                         -10-

<PAGE>

Item 8.  Financial Statements and Supplementary Data

The response to this item is submitted under Item 14 (a)(1) of this report.

Item 9.  Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

None.

PART III


Item 10.  Directors and Executive Officers of the Registrant

Not required.

Item 11.  Executive Compensation

Not required.

Item 12.  Security Ownership of Certain Beneficial Owners and Management

Not required.

Item 13.  Certain Relationships and Related Transactions

Not required.

PART IV

Item 14.  Financial Statement Schedules, Reports on Form 8-K and Exhibits  Page

 (a) (1)  Financial Statements

          The  consolidated  financial  statements  of General  American
            Transportation  Corporation and its  subsidiaries  which are
            required in Item 8 are listed below:

          Statements of Consolidated Income and Reinvested Earnings--
            years ended December 31, 1995, 1994 and 1993................... 17
          Consolidated Balance Sheets--December 31, 1995 and 1994.......... 18
          Statements of Consolidated Cash Flows--
            years ended December 31, 1995, 1994 and 1993................... 20
          Notes to Consolidated Financial Statements....................... 21

     (2)  Financial Statement Schedules

          Schedule II   Valuation and Qualifying Accounts............... 37

          All  other  schedules  for  which  provision  is  made  in the
          applicable   accounting   regulation  of  the  Securities  and
          Exchange   Commission  are  not  required  under  the  related
          instructions  or are  inapplicable  and  therefore  have  been
          omitted.


                                     -11-

<PAGE>

PART IV

Item 14.Financial Statement Schedules, Reports on Form 8-K and Exhibits 
(Cont'd)                                                                  Page


  (b)(1)    GATC  filed a Current  Report on Form 8-K  dated  January  26,
            1996, with respect to the Medium Term Notes,  Series F. Copies
            of the forms of the underlying  documents entered into by GATC
            as part of this transaction were filed as part of the Form 8-K
            Report.

     (2)    GATC  filed a Current  Report on Form 8-K dated  March 4, 1996
            with respect to the offering of $100 million  principal amount
            of 6-3/4%  Notes due March 1, 2006. A copy of the Note entered
            into by GATC as part of this  transaction was filed as part of
            the Form 8-K Report.

  (c)       Exhibit Index

Exhibit
Number          Exhibit Description                                        Page


   3A.     Certificate    of    Incorporation    of   General    American
           Transportation  Corporation,  incorporated by reference to the
           GATC  Annual  Report on Form 10-K for the  fiscal  year  ended
           December 31, 1991, file number 2-54754.

   3B.     By-Laws of General  American  Transportation  Corporation,  as
           amended and  restated  as of June 15,  1994,  incorporated  by
           reference  to the  GATC  Annual  Report  on Form  10-K for the
           fiscal year ended December 31, 1994, file number 2-54754.

           Indenture dated October 1, 1987,  incorporated by reference to
   4A.     Exhibit  4.1 to the GATC  Registration  Statement  on Form S-3
           filed  October  8,  1987,  file  number  33-17692;   Indenture
           Supplement  dated May 15, 1988,  incorporated  by reference to
           the GATC  Quarterly  Report on Form 10-Q for the quarter ended
           June  30,  1988,  file  number  2-54754.  Second  Supplemental
           Indenture  dated  as  of  March  15,  1990,   incorporated  by
           reference  to  GATC  Quarterly  Report  on Form  10-Q  for the
           quarter  ended  March 30,  1990,  file number  2-54754.  Third
           Supplemental Indenture dated as of June 15, 1990, incorporated
           by  reference  to GATC  Quarterly  Report on Form 10-Q for the
           quarter  ended June 30,  1990,  file  number  2-54754.  Fourth
           Supplemental Indenture dated as of January 15, 1996 filed with
           the SEC on  Current  Report on Form 8-K on January  26,  1996,
           file number 2-54754.

  4B.      General American Transportation  Corporation Notices 1 through
           6 dated from  November 6, 1987 through April 12, 1988 defining
           the  rights of holders of GATC's  Medium-Term  Notes  Series A
           issued  during that period,  incorporated  by reference to the
           GATC Quarterly  Report on Form 10-Q for the quarter ended June
           30, 1988, file number 2-54754.



                                -12-

<PAGE>

Exhibit
Number                         Exhibit Description                        Page

   4C.     General American Transportation  Corporation Notices 1 through
           3 dated from October 17, 1988  through  October 24, 1988 and 4
           through 6 dated from  November 7, 1988  through  March 3, 1989
           defining  the rights of holders  of GATC's  Medium-Term  Notes
           Series B issued  during  those  periods,  Notices  1 through 3
           incorporated by reference to the GATC Quarterly Report on Form
           10-Q for the quarter ended  September 30, 1988,  and Notices 4
           through 6 incorporated  by reference to the GATC Annual Report
           on Form 10-K for the fiscal year ended December 31, 1988, file
           number 2-54754.

   4D.     General American  Transportation  Corporation  Notices 1 and 2
           dated from March 30, 1989 through  March 31,  1989,  Notices 3
           through 8 dated  from  April 4, 1989  through  June 29,  1989,
           Notices  9  through  16  dated  from  July  19,  1989  through
           September  29,  1989,  and  Notices  17  through 21 dated from
           October 2, 1989 through October 9, 1989 defining the rights of
           the holders of GATC's Medium-Term Notes Series C issued during
           those  periods.  Notices  1 and 2,  Notices  3  through  8 and
           Notices 9 through 16 are incorporated by reference to the GATC
           Quarterly  Reports on Form 10-Q for the  quarters  ended March
           31, 1989, June 30, 1989 and September 30, 1989,  respectively,
           and Notices 17 through 21  incorporated  by  reference  to the
           GATC  Annual  Report on Form 10-K for the  fiscal  year  ended
           December 31, 1989, file number 2-54754.

    4E.    General American  Transportation  Corporation  Notices 1 and 2
           dated  February  27,  1992,  Notices 3  through  5 dated  from
           December  7, 1992  through  December  14,  1992 and  notices 6
           through  10  dated  from May 18,  1993  through  May 25,  1993
           defining the rights of the holders of GATC's Medium-Term Notes
           Series D issued  during  those  periods.  Notices  1 and 2 are
           incorporated by reference to the GATC Quarterly Report on Form
           10-Q for the quarter ended March 31, 1992, Notices 3 through 5
           are  incorporated  by reference  to the GATC Annual  Report on
           Form 10-K for the fiscal year ended  December  31,  1992,  and
           Notices 6 through 10 are incorporated by reference to the GATC
           Quarterly  Report on Form 10-Q for the quarter ending June 30,
           1993, file number 2-54754.

     4F.   General American  Transportation  Corporation  Notices 1 and 2
           dated  June 8, 1994 and  Notices  3  through 6 dated  June 17,
           1994,  and Notices 7 through 11 dated July 18, 1994,  defining
           the rights of the holders of GATC's Medium-Term Notes Series E
           issued  during  those   periods.   Notices  1  through  6  are
           incorporated by reference to the GATC Quarterly Report on Form
           10-Q for the  quarter  ended  June 30,  1994,  and  Notices  7
           through 11 are  incorporated  herein by  reference to the Form
           424(b)(5) dated July 18, 1994, file number 2-54754.


                                  -13-
<PAGE>

Exhibit
Number              Exhibit Description                                   Page

     4G.   General American Transportation Corporation Notices 12 through
           14 dated  February 24,  1995,  Notices 15 through 20 dated May
           11,  1995,  amended  May 24,  1995,  and Notices 21 through 30
           dated from November 8, 1995 through November 13, 1995 defining
           the rights of the holders of GATC's Medium-Term Notes Series E
           issued  during  those  periods.  Notices  12  through  14  are
           incorporated by reference to the Form 424(b)(5) dated February
           24, 1995,  Notices 15 through 20 are incorporated by reference
           to the Form  424(b)(5)  dated May 11,  1995,  and  Notices  21
           through 30 are incorporated by reference to the Form 424(b)(5)
           dated from  November 8, 1995 through  November 13, 1995,  file
           number 2-54754.

    4H.    Form of 8-5/8% Note due December 1, 2004 filed with the SEC on
           Current  Report on Form 8-K on December  7, 1994,  file number
           2-54754.

    4I.    Form of 6-3/4%  Note due March 1, 2006  filed  with the SEC on
           Current  Report  on Form  8-K on March 4,  1996,  file  number
           2-54754.

   10A.    Third Amended and Restated Revolving Credit Agreement for GATC
           dated as of March  31,  1994,  incorporated  by  reference  to
           GATC's  Quarterly  Report  on Form 10-Q for the  period  ended
           March  31,  1994,  file  number  2-54754.  Amendment  Number 1
           thereto dated as of April 21, 1995; submitted to the SEC along
           with the electronic transmission of this Annual Report on Form
           10-K.

   10B.    Revolving Credit Facility Agreement for GATX Terminals Limited
           as borrower and GATC as  guarantor  dated as of July 13, 1993,
           incorporated by reference to GATC's  Quarterly  Report on Form
           10-Q for the period  ended  September  30,  1993,  file number
           2-54754. Amendment effective June 30, 1994 and amendment dated
           June 19, 1995;  submitted to the SEC along with the electronic
           submission of this Report on Form 10-K.

   12.     Statement regarding computation of ratios of earnings to fixed     
           charges.                                                         38

   23.     Consent of Independent Auditors                                  39

   27.     Financial  Data  Schedule  for GATC for the fiscal  year ended
           December 31, 1995, file number  2-54754.  Submitted to the SEC
           along with the  electronic  submission  of this report on Form
           10-K.

           Any  instrument  defining the rights of security  holders with
           respect to nonregistered long-term debt not being filed on the
           basis that the amount of securities authorized does not exceed
           10 percent of the total assets of the company and subsidiaries
           on a  consolidated  basis will be furnished to the  Commission
           upon request.

                                       -14-

<PAGE>

                                    SIGNATURES


Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  Registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.


                          GENERAL AMERICAN TRANSPORTATION CORPORATION
                                  (Registrant)



                                   /s/D. Ward Fuller
                            ---------------------------------
                                       D. Ward Fuller
                             President, Chief Executive Officer
                                         and Director
                                        March 22, 1996


Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities and on the date indicated.


    /s/D. Ward Fuller                                 /s/David M. Edwards
-----------------------------------             -----------------------------
       D. Ward Fuller                                 David M. Edwards
President, Chief Executive Officer                        Director
        and Director                                  March 22, 1996
       March 22, 1996


    /s/Donald J. Schaffer                            /s/David B. Anderson
----------------------------------              -----------------------------
      Donald J. Schaffer                              David B. Anderson
Vice President, Finance and Chief                         Director
       Financial Officer                               March 22, 1996
        March 22, 1996


   /s/Ronald H. Zech
-------------------------------
      Ronald H. Zech
         Director
       March 22, 1996


                                       -15-

<PAGE>

REPORT OF INDEPENDENT AUDITORS


Board of Directors
General American Transportation Corporation



We have audited the  consolidated  financial  statements and related schedule of
General American  Transportation  Corporation (a wholly-owned subsidiary of GATX
Corporation)  and  subsidiaries  listed in Item  14(a)(1)  and (2) of the Annual
Report on Form 10-K of General American Transportation  Corporation for the year
ended December 31, 1995. These financial statements and related schedule are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements and related schedule based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements and related schedule. An
audit also includes  assessing the accounting  principles  used and  significant
estimates  made by  management,  as well as  evaluating  the  overall  financial
statement  presentation.  We believe that our audits provide a reasonable  basis
for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all material respects,  the consolidated  financial position of General American
Transportation  Corporation and  subsidiaries at December 31, 1995 and 1994, and
the results of their operations and their cash flows for each of the three years
in the period ended  December 31, 1995, in conformity  with  generally  accepted
accounting principles.  Also, it is our opinion, the related financial statement
schedule, when considered in relation to the basic financial statements taken as
a whole,  presents  fairly in all material  respects,  the information set forth
therein.



                                                   ERNST & YOUNG LLP


Chicago, Illinois
January 23, 1996



                                          -16-


<PAGE>
<TABLE>
<CAPTION>

            GENERAL AMERICAN TRANSPORTATION CORPORATION AND SUBSIDIARIES

             STATEMENTS OF CONSOLIDATED INCOME AND REINVESTED EARNINGS
                                   (In Millions)



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

<S>                                                 <C>           <C>            <C>   
Gross income                                        $709.2        $642.6         $601.7

Costs and expenses
   Operating expenses                                312.2         293.0          271.9
   Interest                                           99.4          78.3           78.8
   Provision for depreciation and amortization       121.4         111.8          104.9
   Selling, general and administrative                55.2          46.7           41.5
                                                    ------        ------         ------
                                                     588.2         529.8          497.1
                                                    ------        ------         ------
Income before income taxes and equity in net
  earnings of affiliated companies                   121.0         112.8          104.6

Income taxes                                          47.2          42.7           45.1
                                                    ------        ------         ------
Income before equity in net earnings of
  affiliated companies                                73.8          70.1           59.5

Equity in net earnings
  of affiliated companies                             20.1          16.9           14.6
                                                    ------        ------         ------

Net income                                            93.9          87.0           74.1

Reinvested earnings at beginning of year             346.9         306.5          275.7
                                                                               
Dividends paid to GATX Corporation                   (48.1)        (46.6)         (43.3)
                                                    ------        ------         ------

Reinvested earnings at end of year                  $392.7        $346.9         $306.5
                                                    ======        ======         ======  

<FN>

See notes to consolidated financial statements.
</FN>
</TABLE>



                                           -17-

<PAGE>
<TABLE>
<CAPTION>

             GENERAL AMERICAN TRANSPORTATION CORPORATION AND SUBSIDIARIES


                           CONSOLIDATED BALANCE SHEETS
                                   (In Millions)


                                                               December 31
                                                        ------------------------
                                                          1995             1994
                                                        ------            ------
ASSETS

<S>                                                    <C>              <C>      
Cash and cash equivalents                              $    13.4        $    14.5


Trade receivables--net                                      64.8             52.3


Property, plant and equipment:
   Railcars and support facilities                       1,945.1          1,857.4
   Tank storage terminals and pipelines                  1,242.3          1,171.8
                                                        --------         --------
                                                         3,187.4          3,029.2

   Less - Allowance for depreciation                    (1,332.3)        (1,274.3
                                                        --------         --------
                                                         1,855.1          1,754.9


Due from GATX Corporation                                  373.9            362.4


Investments in affiliated companies                        221.2            182.1


Other assets                                               102.6            100.4
                                                        --------         --------

TOTAL ASSETS                                           $ 2,631.0        $ 2,466.6
                                                        ========         ========


<FN>

See notes to consolidated financial statements.

</FN>
</TABLE>


                                             -18-


<PAGE>



<TABLE>
<CAPTION>
                                                                  December 31
                                                         ----------------------------      
                                                            1995               1994
                                                         ---------          ---------
LIABILITIES, DEFERRED ITEMS
   AND SHAREHOLDER'S EQUITY

<S>                                                      <C>               <C>      
Accounts payable                                         $    89.9         $   106.4

Accrued expenses                                              36.4              35.7

Debt
   Short-term debt                                           144.8             129.4
   Long-term debt                                            972.9             864.1
   Capital lease obligations                                 115.1             121.8
                                                          --------          --------
                                                           1,232.8           1,115.3

Deferred income taxes                                        281.1             271.3

Other deferred items                                         250.0             234.5
                                                          --------          --------

       Total liabilities and deferred items                1,890.2           1,763.2



Shareholder's equity
   Common Stock--par value $1 per share,
       1,000 shares authorized, issued and
       outstanding (owned by GATX Corporation)                   -                 -
   Additional capital                                        335.0             335.0
   Reinvested earnings                                       392.7             346.9
   Cumulative foreign currency
        translation adjustment                                13.1              21.5
                                                          --------          --------

        Total shareholder's equity                           740.8             703.4
                                                          --------          --------

TOTAL LIABILITIES, DEFERRED ITEMS
   AND SHAREHOLDER'S EQUITY                              $ 2,631.0         $ 2,466.6
                                                         =========         =========
</TABLE>

                                               -19-

<PAGE>
<TABLE>
<CAPTION>


                GENERAL AMERICAN TRANSPORTATION CORPORATION AND SUBSIDIARIES

                        STATEMENTS OF CONSOLIDATED CASH FLOWS
                                      (In Millions)

                                                                               Year Ended December 31
                                                                        ----------------------------------------
                                                                          1995            1994            1993
                                                                        ---------       ---------       --------
<S>                                                                     <C>             <C>             <C>    
OPERATING ACTIVITIES
   Net income                                                           $    93.9       $   87.0        $  74.1
   Adjustments to reconcile net income to net
       cash provided by operating activities:
          Provision for depreciation
              and amortization                                              121.4          111.8          104.9
          Deferred income taxes                                              18.2           10.7           14.5
   Other (includes working capital)                                         (22.3)          (8.7)          13.0
                                                                        ---------       --------        --------             

     NET CASH PROVIDED BY OPERATING ACTIVITIES                              211.2          200.8          206.5


INVESTING ACTIVITIES
   Additions to property, plant & equipment:
     Railcars and support facilities                                       (382.0)        (281.8)        (195.3)
     Tank storage terminals and pipelines                                  (128.9)        (144.9)         (75.9)
   Investments in affiliated companies                                      (30.3)         (13.1)         ( 1.9)
                                                                        ---------       --------        -------- 
       Capital additions                                                   (541.2)        (439.8)        (273.1)
   Proceeds from asset dispositions                                         270.7          137.3          151.6
                                                                        ---------       --------        -------- 

     NET CASH USED IN INVESTING ACTIVITIES                                 (270.5)        (302.5)        (121.5)


FINANCING ACTIVITIES
   Proceeds from issuance of long-term debt                                 200.4          182.4           63.3
   Repayment of long-term debt                                              (91.5)         (50.7)         (58.8)
   Net increase (decrease) in short-term debt                                15.4           25.2          (29.1)
   Repayment of capital lease obligations                                    (6.5)          (4.9)          (8.1)
   Cash dividends paid to GATX Corporation                                  (48.1)         (46.6)         (43.3)
   Net (increase) in amount due from GATX Corporation                       (11.5)           (.9)          (2.8)
                                                                        ---------       --------        -------- 

     NET CASH PROVIDED BY (USED IN)
           FINANCING ACTIVITIES                                              58.2          104.5          (78.8)
                                                                        ---------       --------        -------- 


NET (DECREASE) INCREASE IN CASH
     AND CASH EQUIVALENTS                                               $    (1.1)      $    2.8       $    6.2
                                                                        =========       ========       =========   
</TABLE>


                                                        -20-


<PAGE>

GENERAL AMERICAN TRANSPORTATION CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A--SIGNIFICANT ACCOUNTING POLICIES

Significant accounting policies of General American  Transportation  Corporation
(GATC) and its consolidated subsidiaries are discussed below.

Consolidation:  The consolidated  financial  statements  include the accounts of
GATC and its majority-owned subsidiaries.  Investments in 20 to 50 percent-owned
companies  and joint  ventures are accounted for under the equity method and are
shown  as  investments  in  affiliated  companies.  Less  than 20  percent-owned
affiliated companies are recorded using the cost method.

Cash Equivalents:  GATC considers all highly liquid  investments with a maturity
of three  months or less when  purchased  to be cash  equivalents.  The carrying
amounts reported in the balance sheet for cash and cash equivalents  approximate
the fair value of those assets.

Property,  Plant  and  Equipment:  Property,  plant  and  equipment  are  stated
principally  at cost.  Assets  acquired  under  capital  leases are  included in
property,  plant and  equipment  and the  related  obligations  are  recorded as
liabilities. Provisions for depreciation include the amortization of the cost of
capital  leases and are computed by the  straight-line  method which  results in
equal annual depreciation charges over the estimated useful lives of the assets.
The estimated useful lives of depreciable assets are as follows:

                   Railcars                                         20-33 years
                   Buildings, leasehold improvements,
                       storage tanks, and pipelines                  5-40 years
                   Machinery and related equipment                   3-25 years

Goodwill:  GATC has  classified as goodwill the cost in excess of the fair value
of net assets acquired.  Goodwill,  which is included in other assets,  is being
amortized on a straight-line basis over 40 years. GATC continually evaluates the
existence  of  goodwill  impairment  on the basis of  whether  the  goodwill  is
recoverable from projected  undiscounted net cash flows of the related business.
Goodwill, net of accumulated  amortization of $2.7 million and $2.2 million, was
$18.3 million and $19.5 million as of December 31, 1995 and 1994,  respectively.
Amortization expense was $.5 million for each of 1995, 1994, and 1993.

Income  Taxes:  United  States  income  taxes  have  not  been  provided  on the
undistributed earnings of foreign subsidiaries and affiliates which GATC intends
to permanently  reinvest in these foreign  operations.  The cumulative amount of
such earnings was $141.3 million at December 31, 1995.

Other   Deferred   Items:   Other   deferred   items  include  the  accrual  for
postretirement  benefits other than pensions;  environmental,  general liability
and workers' compensation reserves; and other deferred credits.


                                      -21-

<PAGE>

GENERAL AMERICAN TRANSPORTATION CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

NOTE A--SIGNIFICANT ACCOUNTING POLICIES (CONT'D)

Off-Balance-Sheet-Financial  Instruments:  GATC uses  interest rate and currency
swaps,  forwards and similar  contracts  to set  interest and exchange  rates on
existing  or  anticipated  transactions.  These  instruments  qualify  for hedge
accounting.  Fair  values  of  GATC's  off-balance-sheet  financial  instruments
(futures,  swaps,  forwards,  options  and  purchase  commitments)  are based on
current market prices, settlement values or fees currently charged to enter into
similar agreements. The fair values of the hedge contracts are not recognized in
the  financial  statements.  Net amounts paid or received on such  contracts are
recognized over the term of the contract as an adjustment to interest expense or
the basis of the hedged financial instrument.

Environmental  Liabilities:  Expenditures  that  relate  to  current  or  future
operations are expensed or capitalized as appropriate.  Expenditures that relate
to an existing condition caused by past operations,  and which do not contribute
to current or future revenue generation,  are charged to environmental reserves.
Reserves are recorded in accordance with accounting  guidelines to cover work at
identified  sites when  GATC's  liability  for  environmental  clean-up  is both
probable and a minimum estimate of associated costs can be made;  adjustments to
initial estimates are recorded as necessary.

Revenue Recognition:  The  majority of GATC's gross income is  derived from  the
rentals of railcars and terminals and other services.

Foreign  Currency  Translation:  The assets and  liabilities of GATC  operations
located  outside the United States are translated at exchange rates in effect at
year end, and income statements are translated at the average exchange rates for
the year.  Gains or losses  resulting from the  translation of foreign  currency
financial  statements  are  deferred  and  recorded as a separate  component  of
consolidated  shareholder's  equity.  Incremental  unrealized  translation gains
(losses)  recorded in the cumulative  foreign  currency  translation  adjustment
account were $(8.4) million,  $19.1million and $(5.8) million during 1995, 1994,
and 1993, respectively.

Use of Estimates:  The  preparation of financial  statements in conformity  with
generally accepted accounting principles necessarily requires management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the financial  statements as well as revenues and expenses  during the reporting
period.  Actual  amounts  when  ultimately  realized  could  differ  from  those
estimates.

Reclassifications:  Certain amounts in the 1994  and  1993 financial  statements
have been reclassified to conform to the 1995 presentation.

NOTE B--ACCOUNTING FOR LEASES

The following information pertains to GATC as a lessor:

Operating  leases:  Railcar and tankage assets  included in property,  plant and
equipment are classified as operating leases.

                                         -22-

<PAGE>

GENERAL AMERICAN TRANSPORTATION CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

NOTE B--ACCOUNTING FOR LEASES (CONT'D)

Minimum  future  receipts:  Minimum  future rental  receipts from  noncancelable
operating leases by year at December 31, 1995 were (in millions):

             1996                                      $  457.2
             1997                                         332.0
             1998                                         242.6
             1999                                         171.9
             2000                                         105.4
             Years thereafter                             363.2
                                                       --------
                                                       $1,672.3
                                                       ========

The following information pertains to GATC as a lessee:

Capital  leases:  Certain  railcars  are  leased  by GATC  under  capital  lease
agreements.  Property,  plant and equipment includes cost and related allowances
for depreciation of $152.8 million and $76.5 million,  respectively, at December
31, 1995 and $153.1  million and $70.0  million,  respectively,  at December 31,
1994  for  these  railcars.  The  cost  of  these  assets  is  amortized  on the
straight-line basis with the charge included in depreciation expense.

Operating  leases:  GATC has financed railcars through sale leasebacks which are
accounted for as operating leases. In addition, GATC leases certain other assets
and office  facilities.  Total rental  expense for the years ended  December 31,
1995,  1994,  and 1993 was $65.1  million,  $50.3  million,  and $39.8  million,
respectively.

Minimum  future  rental  payments:  Future  minimum  rental  payments  due under
noncancellable leases at December 31, 1995 were (in millions):

                                                    Capital           Operating
                                                     Leases             Leases
                                                   ---------          ---------
            1996                                   $    17.0          $    53.3
            1997                                        17.5               61.5
            1998                                        17.3               63.0
            1999                                        17.3               58.4
            2000                                        17.2               59.2
            Years thereafter                            98.7            1,033.1
                                                   ---------          ---------
                                                       185.0          $ 1,328.5
                                                                      =========
            Less - Amount representing interest        (69.9)
                                                   ---------
            Present value of future
              minimum capital lease payments       $   115.1
                                                   =========
The above  capital  lease  amounts do not include the cost of  licenses,  taxes,
insurance and maintenance which GATC is required to pay. Interest expense on the
above capital  lease  obligations  was $10.6  million in 1995,  $11.3 million in
1994, and $11.8 million in 1993.


                                        -23-

<PAGE>

GENERAL AMERICAN TRANSPORTATION CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

NOTE C--ADVANCES TO/FROM PARENT

Interest  income on advances to GATX,  which is included in gross  income on the
income  statement,  was $34.8 million in 1995,  $17.4 million in 1994, and $18.4
million in 1993. Interest expense on advances from GATX to GATC was $6.2 million
in 1995, $1.8 million in 1994, and $2.2 million in 1993.  These advances have no
fixed maturity date. Interest income/expense on advances to/from GATX were based
on an interest rate which is adjusted annually in accordance with an estimate of
short-term  borrowing rates and averaged 7.45% in 1995, 4.09% in 1994, and 4.30%
in 1993.

NOTE D--INVESTMENTS IN AFFILIATED COMPANIES

GATC has  investments  in 20 to 50  percent-owned  companies and joint  ventures
which are  accounted  for using the  equity  method.  These  investments  are in
businesses  similar to GATC's  operations.  They  include  Canadian and European
railcar  leasing and foreign and domestic tank storage  terminals and pipelines.
Distributions received from such jointly-owned companies were $7.3 million, $2.6
million, and $3.1 million in 1995, 1994, and 1993, respectively.

Summarized operating results for all affiliated companies in their entirety were
(in millions):

                                                   For the Year
                                        ----------------------------------
                                         1995         1994           1993
                                        ------       ------         ------
            Revenues                  $233.8         $206.8         $176.8
            Net income                  44.0           35.7           32.4

Summarized  balance sheet data for all  affiliated  companies in their  entirety
were (in millions):

                                                        December 31
                                                  ----------------------
                                                    1995           1994
                                                  -------        -------
            Total assets                           $868.0         $773.2
            Long-term liabilities                   347.6          339.0
            Other liabilities                       151.5           97.8
                                                  -------        -------
            Shareholder's equity                   $368.9         $336.4
                                                  =======        =======

                                           -24-

<PAGE>

GENERAL AMERICAN TRANSPORTATION CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

NOTE E--FOREIGN OPERATIONS

GATC has a number of investments in subsidiaries and affiliated  companies which
are  located  in or derive  income  from  foreign  countries.  Foreign  entities
contribute  significantly to equity in net earnings of affiliated companies. The
foreign identifiable assets are primarily  investments in affiliated  companies;
and a United Kingdom  terminalling  operation and a Mexican  railcar  operation,
which are fully consolidated.

GROSS INCOME (IN MILLIONS)              1995            1994          1993
--------------------------            --------         -------       -------
Foreign                               $   35.5         $  30.6       $  26.5
United States                            673.7           612.0         575.2
                                      --------         -------       -------
                                      $  709.2         $ 642.6       $ 601.7
                                      ========         =======       =======

INCOME BEFORE INCOME TAXES AND
EQUITY IN NET EARNINGS OF AFFILIATED
COMPANIES (IN MILLIONS)                 1995            1994          1993
---------------------------------    --------         --------       -------
Foreign                              $    .7          $    2.8       $   2.7
United States                          120.3             110.0         101.9
                                     --------         --------       -------
                                     $ 121.0          $  112.8       $ 104.6
                                     ========         ========       ======= 

EQUITY IN NET EARNINGS OF
AFFILIATED COMPANIES (IN MILLIONS)          1995            1994          1993
---------------------------------         -------         -------      -------
Foreign                                   $  19.6         $  16.9      $  14.6
United States                                  .5               -            -
                                          -------         -------      -------
                                          $  20.1         $  16.9      $  14.6
                                          =======         =======      =======


IDENTIFIABLE ASSETS (IN MILLIONS)         1995           1994          1993
--------------------------------       --------       --------      --------

Foreign                                $  318.2       $  273.1      $  212.6
United States                           2,312.8        2,193.5       2,003.0
                                       --------       --------      --------
                                       $2,631.0       $2,466.6      $2,215.6
                                       ========       ========      ========

Foreign  cash flows  generated  are used to meet local  operating  needs and for
reinvestment.  The translation of the foreign  balance sheets into U.S.  dollars
results  in  an  increase  or  decrease  to  the  unrealized   foreign  currency
translation account.



                                          -25-


<PAGE>

GENERAL AMERICAN TRANSPORTATION CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

NOTE F--SHORT-TERM DEBT AND LINES OF CREDIT

Short-term debt and its weighted  average  interest rate as of year end were (in
millions):

                                                   December 31
                                      --------------------------------------
                                            1995                  1994
                                      Amount      Rate       Amount     Rate
                                      -------    -------     ------   -------
Commercial paper                      $  44.6      6.02%     $ 60.0      6.15%
Other short-term borrowings             100.2      6.41        69.4      5.99
                                      -------                ------   
                                      $ 144.8                $129.4
                                      =======                ======

Under a revolving credit agreement with a group of banks,  GATC may borrow up to
$250.0 million.  The revolving  credit agreement  contains  various  restrictive
covenants which include, among other things, minimum net worth,  restrictions on
additional  indebtedness,  and requirements to maintain certain financial ratios
for GATC. Under the agreement GATC met its requirement to maintain a minimum net
worth of $573.4  million at December 31, 1995.  While at year end no  borrowings
were outstanding  under the agreement,  the available line of credit was reduced
by $44.6 million of commercial paper  outstanding.  GATC had borrowings of $62.9
million under unsecured money market lines. Also, GATX Terminals has a revolving
credit  agreement  of  (pound)28.0  million  of  which  (pound)4.0  million  was
available at year end.

Interest  expense on short-term  debt was $8.5 million in 1995,  $6.2 million in
1994, and $4.2 million in 1993.

NOTE G--LONG-TERM DEBT

Long-term debt consisted of (in millions):

                                                                December 31
                                   Interest      Final        ----------------
                                    Rates      Maturity       1995        1994
Fixed Rate:                       ----------   ---------     ------      ------
    Term notes                    5.16%-10.8%   1996-2007    $885.0      $776.2
    Industrial revenue bonds      6.625-7.3     2019-2024      87.9        87.9
                                                             ------      ------
                                                             $972.9      $864.1
                                                             ======      ======

                                       -26-

<PAGE>

GENERAL AMERICAN TRANSPORTATION CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

NOTE G--LONG-TERM DEBT (CONT'D)

Maturities  of GATC's  long-term  debt as of  December  31, 1995 for each of the
years 1996 through 2000 were (in millions):

                                    Year             Amount

                                    1996              $ 66.0
                                    1997                65.0
                                    1998                81.0
                                    1999                84.0
                                    2000               103.1

Interest cost incurred on long-term debt, net of capitalized interest, was $74.1
million in 1995, $59.0 million in 1994, and $60.5 million in 1993. Interest cost
capitalized as part of the cost of acquisition or  construction  of major assets
was $4.6 million in 1995, $2.7 million in 1994, and $2.4 million in 1993. A loss
of $.3 million was recorded on the early retirement of debt in 1994.

NOTE H--OFF-BALANCE-SHEET FINANCIAL INSTRUMENTS

In  the  ordinary  course  of  business,  GATC  enters  into  various  types  of
transactions  that involve  financial  instruments with  off-balance-sheet  risk
which are used to manage  financial  market risk,  including  interest  rate and
foreign exchange risk.

At  December  31,  1995  GATC  had the  following  off-balance  sheet  financial
instruments (in millions):
                                                Pay        Recieve
Interest Rate Swaps                  Amount  Rate/Index    Rate/Index   Maturity
---------------------               -------  ----------  ------------- ---------
GATC pays fixed, receives floating   $765.5  4.7%-7.585%     LIBOR     1996-2000
GATC pays floating, receives fixed    850.0     LIBOR    6.205%-7.646% 2003-2006


Currency Forwards               Deliver         Purchase     Maturity
-----------------              --------     --------------   ---------

Singapore dollar forwards       $   7.1     10.0 Singapore      1996



                                         -27-

<PAGE>

GENERAL AMERICAN TRANSPORTATION CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

NOTE H--OFF-BALANCE-SHEET FINANCIAL INSTRUMENTS (CONT'D)

GATC had the following interest rate hedge activity (in millions):

                                           Pay                 Pay
Interest Rate Swaps                       Fixed             Floating
--------------------                     -------           ---------
Balance at January 1, 1994                $400.0            $500.0

Additions                                  200.0             100.0
Maturities                                (100.0)                -
                                         -------            -------
Balance at December 31, 1994               500.0             600.0

Additions                                  365.5             250.0
Maturities                                (100.0)                -
                                         -------            -------
Balance at December 31, 1995              $765.5            $850.0
                                         =======            ======

GATC  manages  its  assets  and  liabilities  using  interest  rate swaps and on
occasion uses interest rate forwards for anticipated transactions. Interest rate
swaps are utilized to better match the duration of GATC's debt  portfolio to the
duration of its railcar leases. Railcar assets are financed with long-term fixed
rate debt or through sale leasebacks.  However, the railcar assets are placed on
lease with  average new lease terms of 5 years;  the average  renewal  term is 3
years.  Rents are fixed over these lease terms.  Interest rate swaps effectively
convert GATC's long-term fixed rate debt to fixed rate debt with maturities of 3
months to 3 years. Through the swap program, railcar lease rates are expected to
better reflect GATC's  interest costs.  At GATX Terminals  Limited,  an interest
rate swap is used to fix the  interest  rate on a portion of its  floating  rate
debt.

In its swaps,  GATC agrees to exchange,  at specific  intervals  the  difference
between fixed and floating rate  interest  amounts  calculated on an agreed upon
notional  principal amount.  The swaps have in effect converted $84.5 million of
long-term  fixed  rate  debt  into  floating  rate debt and  $765.5  million  of
long-term fixed rate debt into 1-3 year fixed rate debt.

The net amount payable or receivable  from the interest rate swap  agreements is
accrued as an  adjustment  to interest  expense.  The fair value of its interest
rate swap  agreements  is an estimate of the amount the company would receive or
pay to terminate the swap  agreement;  at December 31, 1995,  GATC would receive
$27.1  million if the swaps were  terminated.  At December 31, 1994,  GATC would
have paid $45.2 million if the swaps were terminated at that time.

In  conjunction  with the  financing  of the  purchase of an interest in a joint
venture, GATX Terminals has a forward contract to deliver 10.0 million Singapore
dollars in exchange for $7.1 million. The gain or loss from the final settlement
will be used to offset any gain or loss from the underlying transaction.

In the event that a  counterparty  fails to meet the terms of the interest  rate
swap agreement or a foreign exchange contract, GATC's exposure is limited to the
interest  rate  or  currency  differential.  GATC  manages  the  credit  risk of
counterparties  by dealing  only with  institutions  that the company  considers
financially  sound  and  by  avoiding  concentrations  of  risk  with  a  single
counterparty. GATC considers the risk of nonperformance to be remote.

                                   -28-

<PAGE>

NOTE I--FAIR VALUE OF OTHER FINANCIAL INSTRUMENTS

SFAS No. 107, Disclosures about Fair Value of Financial Instruments, defines the
fair value of a financial instrument as the amount at which the instrument could
be exchanged in a current  transaction  between willing  parties.  The following
table  presents  the  carrying  amounts  and  estimated  fair  values  of GATC's
financial  instruments  that were  recorded on the balance sheet at year end (in
millions):

                                                   December 31
                                 ----------------------------------------------
                                          1995                    1994
                                 ----------------------   ---------------------
                                 Carrying      Fair      Carrying        Fair
                                  Amount       Value      Amount        Value
                                 --------     ---------  --------      --------
Assets:
    Cash and cash equivalents    $  13.4      $   13.4    $  14.5     $  14.5
    Trade receivables-net           64.8          64.8       52.3        52.3
    Due from GATX Corporation      373.9         373.9      362.4       362.4

Liabilities:
    Accounts payable                89.9          89.9      106.4       106.4
    Short-term debt                144.8         144.8      129.4       129.4
    Long-term debt - fixed         972.9       1,085.2      864.1       883.3

The carrying  amounts shown in the table are included in the balance sheet under
the indicated captions.

The following  methods and  assumptions  were used to estimate the fair value of
each class of financial instruments:

Cash and cash equivalents,  trade receivables,  accounts payables and short-term
debt are  carried at cost  which  approximates  fair value  because of the short
maturity of those instruments.

The  carrying  amounts  reported  in the  balance  sheet  for the Due from  GATX
Corporation approximate fair value.

The fair  value of fixed rate  long-term  debt was  estimated  by  performing  a
discounted  cash flow  calculation  using the note term and market interest rate
based on  GATC's  current  incremental  borrowing  rates for  similar  borrowing
arrangements.

NOTE J--PENSION BENEFITS

GATC and its subsidiaries contributed to several pension plans sponsored by GATX
which cover  substantially all employees.  Benefits under the plans are based on
years of service and/or final average  salary.  The funding policy for all plans
is based on an  actuarially  determined  cost method  allowable  under  Internal
Revenue Service  regulations.  Contributions to these plans were $3.5 million in
1995, $6.6 million in 1994, and $6.7 million in 1993.

                                        -29-

<PAGE>

GENERAL AMERICAN TRANSPORTATION CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

NOTE J-- PENSION BENEFITS (CONT'D)

Costs pertaining to the GATX plans are allocated to GATC on the basis of payroll
costs with respect to normal cost and on the basis of  actuarial  determinations
for prior service cost. Net periodic  pension cost for 1995,  1994, and 1993 was
$3.1  million,  $2.6  million,  and $3.4  million,  respectively.  Plan  benefit
obligations, plan assets, and the components of net periodic cost for individual
subsidiaries of GATX have not been determined.

NOTE K--POSTRETIREMENT BENEFITS OTHER THAN PENSIONS

GATC provides health care, life insurance and other benefits for certain retired
employees who meet established  criteria.  Most domestic  employees are eligible
for  health  care and life  insurance  benefits  if they  retire  from GATC with
immediate  pension  benefits  under the GATX pension plan.  The plans are either
contributory or non-contributory, depending on various factors.

Net  periodic   postretirement  cost  includes  the  following   components  (in
millions):

                                                 1995         1994        1993
                                                --------     --------   --------

    Current service cost                        $   .4      $  .4      $   .3
    Interest cost on accumulated
      postretirement benefit obligation            4.2        4.7         5.9
                                                -------     ------     ------- 
    Net periodic postretirement benefit cost    $  4.6      $ 5.1      $  6.2
                                                =======     ======     ======= 
    Discount rate                                 7.75%      7.75%        8.5%
                                                =======     ======     ======= 
                                      -30-

<PAGE>

GENERAL AMERICAN TRANSPORTATION CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

NOTE K--POSTRETIREMENT BENEFITS OTHER THAN PENSIONS (CONT'D)

The following  table sets forth the amounts  recognized  in GATC's  consolidated
balance sheet (in millions):

                                                                December 31
                                                             1995          1994
                                                           -------       -------

         Accumulated postretirement benefit obligation
            Retirees                                       $48.2          $55.3
            Fully eligible active plan participants          2.5            2.6
            Other active plan participants                   4.8            4.5
                                                           -------       -------
         Total accumulated
             postretirement benefit obligation              55.5           62.4

         Unrecognized gain                                   9.1            1.2
                                                           -------       -------
         Accrued postretirement benefit liability          $64.6          $63.6
                                                           ======        ======

The accrued  postretirement  benefit  liability was determined  using an assumed
discount rate of 7.75% for 1995 and 1994.

For  measurement  purposes,  blended rates ranging from 9% decreasing to 5% over
the next two years and  remaining  at that  level  thereafter  were used for the
increase in the per capita cost of covered health care benefits. The health care
cost  trend  rate  assumption  has a  significant  effect  on the  amount of the
obligation  and periodic cost  reported.  An increase in the assumed health care
cost trend rates by 1% would  increase the  accumulated  postretirement  benefit
obligation  by $3.7 million and would  increase  aggregate  service and interest
cost components of net periodic  postretirement  benefit cost by $.3 million per
year.


NOTE L--INCOME TAXES

Deferred  income  taxes  reflect  the net tax effects of  temporary  differences
between the carrying  amounts of assets and liabilities for financial  reporting
purposes and the amounts used for income tax purposes.


                                -31-

<PAGE>

GENERAL AMERICAN TRANSPORTATION CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

NOTE L--INCOME TAXES (CONT'D)

Significant  components of GATC's  deferred tax  liabilities and assets were (in
millions):

                                                                December 31
                                                            ------------------
                                                             1995        1994
                                                            ------      ------
Deferred tax liabilities:
  Book/tax basis differences due to depreciation            $329.4      $323.6
  Other                                                       30.1        31.0
                                                            ------      ------
   Total deferred tax liabilities                            359.5       354.6

Deferred tax assets:
  Accruals not currently deductible for tax purposes          34.4        34.7
  Postretirement benefits other than pensions                 22.8        22.4
  Lease accounting                                            19.4        14.4
  Other                                                        1.8        11.8
                                                            ------      ------
    Total deferred tax assets                                 78.4        83.3
                                                            ------      ------
Net deferred tax liabilities                                $281.1      $271.3
                                                            ======      ======

The  results  of  operations  of GATC and its  United  States  subsidiaries  are
included  in the  consolidated  federal  income  tax  return  of  GATX.  Current
provisions for federal income taxes represent  amounts payable to GATX resulting
from  inclusion of GATC's  operations  in the  consolidated  federal  income tax
return.  Amounts shown as currently  payable for federal income taxes  represent
taxes payable due to the alternative minimum tax.

Income taxes consisted of (in millions):
                                                For the Year
                                        1995          1994             1993
                                      -------         -------       -------
   Current-
      Domestic:
         Federal                      $  26.7        $  30.1        $ 29.6
         State and local                  2.2            1.7            .7
                                      -------         -------       -------
                                         28.9           31.8          30.3
      Foreign                              .1             .2            .3
                                      -------         -------       -------
                                         29.0           32.0          30.6
   Deferred-
      Domestic:
         Federal                         16.7            8.4          12.1
         State and local                  1.0            1.5           2.4
                                      -------         -------       -------
                                         17.7            9.9          14.5
       Foreign                             .5             .8             -
                                      -------         -------       -------
                                         18.2           10.7          14.5

   Income tax expense                 $  47.2        $  42.7        $ 45.1
                                      =======        =======        =======

   Income taxes paid                  $  26.9        $  31.9        $ 28.0
                                      =======        =======        =======

                                          -32-

<PAGE>

GENERAL AMERICAN TRANSPORTATION CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

NOTE L--INCOME TAXES (CONT'D)

The reasons for the  differences  between the effective  income tax rate and the
federal statutory income tax rate were:
                                                        For the Year
                                              ----------------------------
                                               1995      1994       1993
                                              -----      -----      -----
  Federal statutory income tax rate           35.0%      35.0%      35.0%
  Add (deduct) effect of:
      Minority interest                        2.0         .9         .8
      State income taxes                       1.7        1.9        1.9
      Purchase accounting adjustments            -         .3        2.1
      Tax rate increase on deferred taxes        -          -        6.4
      Other                                     .3        (.3)      (3.1)
                                              -----      -----      -----
                                              39.0%      37.8%      43.1%
                                              =====      =====      =====


NOTE M--COMMITMENTS, CONTINGENCIES AND CONCENTRATIONS OF CREDIT RISK

GATC's  revenues  are derived  from a wide range of  industries  and  companies.
However, approximately 80% of total consolidated revenues are generated from the
transportation or storage of products for the chemical and petroleum industries.

Under its lease  agreements,  GATC retains  legal  ownership of the asset except
when such assets have been financed by sale  leasebacks.  GATC  performs  credit
evaluations   prior  to  approval  of  a  lease  contract.   Subsequently,   the
creditworthiness  of  the  customer  is  monitored  on an  ongoing  basis.  GATC
maintains  an  allowance  for possible  losses to provide for  potential  losses
should customers become unable to discharge their obligations to GATC.

At  December  31,  1995 GATC had firm  commitments  to acquire  railcars  and to
upgrade facilities totaling $171 million.

GATC and its  subsidiaries are engaged in various matters of litigation and have
a number of unresolved claims pending,  including proceedings under governmental
laws and regulations related to environmental matters. While the amounts claimed
are substantial  and the ultimate  liability with respect to such litigation and
claims cannot be  determined at this time, it is the opinion of management  that
such  liability  to be paid  by GATC is not  likely  to be  material  to  GATC's
consolidated financial position or results of operations.


                                  -33-

<PAGE>

GENERAL AMERICAN TRANSPORTATION CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

NOTE N--FINANCIAL DATA OF BUSINESS SEGMENTS

GATC is engaged in the following businesses:

Railcar  Leasing  and  Management  represents  General  American  Transportation
Corporation and its foreign subsidiaries and affiliates (Transportation),  which
lease and manage tank cars and other specialized railcars.

Terminals and Pipelines  represents GATX Terminals  Corporation and its domestic
and foreign subsidiaries and affiliates (Terminals),  which own and operate tank
storage terminals, pipelines and related facilities.

Intersegment   sales  are  not   significant  in  amount  or  meaningful  to  an
understanding of GATC's business segments.

The following  presentation of segment  profitability  includes the direct costs
incurred at the segment's operating level plus expenses allocated by GATX. These
allocated  expenses  represent  costs for services  provided by GATX which these
operations  would have incurred  otherwise and are  determined on a usage basis;
management  believes that this method is  reasonable.  Such costs do not include
general corporate expense nor interest on debt of GATX.

Interest  costs  associated  with  segment  indebtedness  are  included  in  the
determination  of  profitability of each segment since interest expense directly
influences any investment decision and the evaluation of subsequent  operational
performance.  Interest costs by segment have been shown separately so the reader
can ascertain segment profitability before deducting interest expense.

                              -34-

<PAGE>

GENERAL AMERICAN TRANSPORTATION CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

NOTE N--FINANCIAL DATA OF BUSINESS SEGMENTS (CONT'D)


                                                     (In millions)
                                                1995         1994       1993
                                             ---------    ---------   -------
                       
Gross Income:
-------------
   Railcar Leasing and Management            $   360.9    $   322.1   $ 302.2
   Terminals and Pipelines                       313.4        303.1     281.1
                                             ---------    ---------   -------
         Subtotal                                674.3        625.2     583.3

   Intersegment amounts
   with other GATX segments                       34.9         17.4      18.4
                                             ---------    ---------   -------
CONSOLIDATED                                 $   709.2    $   642.6   $ 601.7
                                             =========    =========   =======

Income Before Income Taxes and Equity
  in Net Earnings of Affiliated Companies:
------------------------------------------
  Railcar Leasing and Management             $    90.7    $   79.6    $  74.4
  Terminals and Pipelines                         30.3        33.2       30.2
                                             ---------    ---------   -------
CONSOLIDATED                                 $   121.0    $  112.8    $ 104.6
                                             =========    =========   =======

Equity in Net Earnings
  of Affiliated Companies:
---------------------------
   Railcar Leasing and Management            $     5.4    $    4.7    $   4.5
   Terminals and Pipelines                        14.7        12.2       10.1
                                             ---------    ---------   -------
CONSOLIDATED                                 $    20.1    $   16.9    $  14.6
                                             =========    =========   =======

Net Income:
-----------
   Railcar Leasing and Management            $    62.9    $   55.1    $  47.6
   Terminals and Pipelines                        31.0        31.9       26.5
                                             ---------    ---------   -------
CONSOLIDATED                                 $    93.9    $   87.0    $  74.1(A)
                                             =========    =========   =======


(A)      Income  includes a $6.6 million charge for the  cumulative  increase in
         deferred  income  taxes as a result of the 1993 federal tax rate change
         (see following table for a breakdown by segment).


                                      -35-

<PAGE>

GENERAL AMERICAN TRANSPORTATION CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

NOTE N--FINANCIAL DATA OF BUSINESS SEGMENTS (CONT'D)

FEDERAL TAX RATE CHANGE IN 1993

The following table shows the effect of the federal tax  legislation  enacted in
1993 which  increased the federal income tax rate from 34% to 35%  retroactively
to January 1, 1993.


                                             Income
                                   Net       Before Tax     Tax Rate    Net
                                   Income    Rate Change    Change(A)   Income
                                 ---------   -------------  ----------  ------
In Millions                         1994                      1993
------------                     ---------   ----------------------------------
Railcar Leasing and Management   $  55.1     $  51.9      $  (4.3)     $  47.6
Terminals and Pipelines             31.9        28.8         (2.3)        26.5

CONSOLIDATED                     $  87.0     $  80.7      $  (6.6)     $  74.1

(A) Effect of tax rate change on pre-1993 deferred taxes.

                                                         (In Millions)
                                                   1995       1994      1993
                                                --------    --------   --------
Identifiable Assets:
   Railcar Leasing and Management               $2,041.9    $1,882.8   $1,701.0
   Terminals and Pipelines                       1,101.5     1,022.5      872.5
   Other                                             1.0          .6        1.0
                                                --------    --------   --------
                                                 3,144.4     2,905.9    2,574.5
   Intersegment amounts                           (513.4)     (439.3)    (358.9)
                                                --------    --------   --------
CONSOLIDATED                                    $2,631.0    $2,466.6   $2,215.6

Capital Additions:
   Railcar Leasing and Management               $  392.6    $  285.4   $  195.3
   Terminals and Pipelines                         148.6       154.4       77.8
                                                --------    --------   --------
CONSOLIDATED                                    $  541.2    $  439.8   $  273.1

Provision for Depreciation and Amortization:
   Railcar Leasing and Management               $   76.1    $   68.3   $   63.9
   Terminals and Pipelines                          45.3        43.5       41.0
                                                --------    --------   --------
CONSOLIDATED                                    $  121.4    $  111.8   $  104.9

Interest Expense:
   Railcar Leasing and Management               $   92.2    $   70.0   $   69.6
   Terminals and Pipelines                          46.4        39.7       39.0
                                                --------    --------   --------
                                                   138.6       109.7      108.6
     Intersegment amounts                          (39.2)      (31.4)     (29.8)
                                                --------    --------   --------
CONSOLIDATED                                    $   99.4    $   78.3   $   78.8

                                               -36-


<PAGE>
<TABLE>
<CAPTION>


                                         SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

                                  GENERAL AMERICAN TRANSPORTATION CORPORATION AND SUBSIDIARIES
                                                          (In Millions)



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


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

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


                                                                 ADDITIONS
                                        Balance at     Charged to     Charged to                       Balance
                                        Beginning      Costs and      Other Accounts- Deductions-      at End
   DESCRIPTION                          of Period      Expenses       Describe           Describe      of Period
----------------------------------------------------------------------------------------------------------------
       
<S>                                     <C>            <C>            <C>                <C>           <C>    
Year ended December 31, 1995:
    Allowance for possible losses
       in collection of trade
       receivables - Note A             $  5.4         $   .1         $   1.2(B)         $   1.3(C)    $   5.4

Year ended December 31, 1994:
    Allowance for possible losses
       in collection of trade
       receivables - Note A             $  5.8         $   .1         $     -            $    .5(C)    $   5.4

Year ended December 31, 1993:
     Allowance for possible losses
        in collection of trade
        receivables - Note A            $  5.8         $  .3          $     -            $   .3(C)     $   5.8

<FN>

Note A - Deducted from asset  accounts.  
Note B - Transfer from other  accounts.
Note C - Uncollectible accounts charged off.

</FN>
</TABLE>



                                           -37-


<PAGE>
<TABLE>
<CAPTION>
                                                                                                                          EXHIBIT 12

                                        GENERAL AMERICAN TRANSPORTATION CORPORATION AND SUBSIDIARIES

                                             COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
                                                       (In Millions Except For Ratios)



                                                       1995         1994         1993          1992         1991
                                                      -------      -------      -------       -------      -------

<S>                                                   <C>          <C>          <C>           <C>          <C>    
Earnings available for fixed charges:
   Net Income                                         $  93.9      $  87.0      $  74.1       $  66.1      $  74.2

   Add (deduct):
      Income taxes                                       47.2         42.7         45.1          31.7         29.0
      Cumulative effect of accounting changes               -            -            -           6.7            -
      Equity in net earnings of affiliated
        companies, net of distributions received        (12.8)       (14.2)       (11.5)        (13.2)       (11.5)
      Interest on indebtedness and amortization
        of debt discount and expense                     99.4         78.3         78.8          96.0        100.7
      Amortization of capitalized interest                1.1          1.1          1.1           1.1           .9
      Portion of rents representative of interest
        factor (deemed to be one-third)                  21.7         16.8         13.2           9.3          7.3
                                                      -------      -------      -------       -------      -------
   Total earnings available for fixed charges         $ 250.5      $ 211.7       $200.8       $ 197.7      $ 200.6
                                                      =======      =======      =======       =======      =======
Fixed charges:
   Interest on indebtedness and amortization
      of debt discount and expense                    $  99.4      $ 78.3       $  78.8       $  96.0      $ 100.7
   Capitalized interest                                   4.6         2.7           2.4           2.8          2.8
   Portion of rents representative of interest
      factor (deemed to be one-third)                    21.7        16.8          13.2           9.3          7.3
                                                      -------      -------      -------       -------      -------
   Total fixed charges                                $ 125.7      $ 97.8       $  94.4       $ 108.1      $ 110.8
                                                      =======      =======      =======       =======      =======
Ratio of earnings to fixed charges(A)                    1.99x       2.16x         2.13x         1.83x        1.81x

<FN>


(A)     The ratio of earnings to fixed  charges  represents  the number of times
        "fixed charges" are covered by "earnings."  "Fixed  charges"  consist of
        interest on outstanding  debt and capitalized  interest,  one-third (the
        proportion deemed representative of the interest factor) of rentals, and
        amortization  of  debt  discount  and  expense.  "Earnings"  consist  of
        consolidated  net income  before income taxes,  fixed  charges,  and, in
        1992, the cumulative  effect of accounting  changes,  less equity in net
        earnings of affiliated companies, net of distributions received.

</FN>
</TABLE>


                                            -38-
<PAGE>


                                                                  EXHIBIT 23




CONSENT OF INDEPENDENT AUDITORS




We consent to the  incorporation  by reference  in  Registration  Statement  No.
33-48475 on Form S-3 filed July 30, 1992, Registration Statement No. 33-52301 on
Form S-3 filed February 16, 1994 and Registration Statement No. 33-64697 on Form
S-3 filed December 1, 1995 of General American Transportation Corporation of our
report  dated  January  23,  1996 with  respect  to the  consolidated  financial
statements and schedule of General American Transportation  Corporation included
in this Annual Report on Form 10-K for the year ended December 31, 1995.



                                                       ERNST & YOUNG LLP


Chicago, Illinois
March 20, 1996




                                        -39-
<PAGE>

   EXHIBITS FILED WITH DOCUMENT

   10A.           Third Amended and Restated Revolving Credit Agreement for GATC
                  dated as of March  31,  1994,  incorporated  by  reference  to
                  GATC's  Quarterly  Report  on Form 10-Q for the  period  ended
                  March  31,  1994,  file  number  2-54754.  Amendment  Number 1
                  thereto dated as of April 21, 1995; submitted to the SEC along
                  with the electronic transmission of this Annual Report on Form
                  10-K.

   10B.           Revolving Credit Facility Agreement for GATX Terminals Limited
                  as borrower and GATC as  guarantor  dated as of July 13, 1993,
                  incorporated by reference to GATC's  Quarterly  Report on Form
                  10-Q for the period  ended  September  30,  1993,  file number
                  2-54754. Amendment effective June 30, 1994 and amendment dated
                  June 19, 1995;  submitted to the SEC along with the electronic
                  submission of this Report on Form 10-K.

   12.            Statement regarding computation of ratios of earnings
                  to fixed charges.

   23.            Consent of Independent Auditors

   27.            Financial Data Schedule for GATC for the fiscal year
                  ended December 31, 1995, file number 2-54754.  Submitted
                  to the SEC along with the electronic submission of this
                  report on Form 10-K.


<PAGE>