The 2007 fourth quarter results include a deferredtax benefit of $9.8 million or $.19 per diluted share from a reduction ofstatutory tax rates in the U.K and Canada. Net income from continuing operations for the full-year 2008 was $196.0 millionor $3.89 per diluted share, compared to $185.8 million or $3.44 per dilutedshare in the prior year period. The 2008 full-year results include a combined$23.2 million or $.45 tickets for Milwaukee Brewers per diluted share of benefits from the reversal of taxreserves and income from the sale of real estate and reversal of environmentalreserves in Poland. The 2007 year-to-date results include deferred tax benefitsof $20.1 million or $.36 per diluted share. Highlights from 2008 include: North American rail utilization remained at 98 throughout the year,reflecting a strong commercial effort as well as Tampa Bay Rays ticket robust scrapping activity asGATX capitalized on historically high scrap prices Railcar lease renewal terms averaged 63 months in 2008. By extending renewalterm in recent years, the number of railcars exposed to lease renewal in 2009 isapproximately 15,000 cars, or only 13 of GATXs total North American fleet. Remarketing income of $55 million; GATX took advantage of strong assetvaluations in the first half of 2008, including optimization of the rail fleetvia Milwaukee Brewers ticket sales in the secondary market."GATX posted outstanding results in 2008 despite increasing challenges," saidBrian A Kenney, president and chief executive officer of GATX.
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"While GATX hasmanaged through a number of economic cycles during its 110-year history, thevolatility in recent months has been tremendous. During Tampa Bay Rays tickets 2008 we invested a total of $780 millionwhile also generating a very strong return on equity and maintaininghistorically low leverage. "In recent years, we have taken a number of steps to reduce our operatingvolatility, and this will serve us well as we manage through this downturn.However, we are not immune to current market challenges. In 2009, we expect thatrail utilization and lease rates will come under increasing pressure, shippingvolumes in the Great Lakes and ocean-going markets will decline materially, New Kids on the Block andsome customers will come under increasing Tampa Bay Rays financial distress. In addition to thepressures in our markets mentioned above, 2009 earnings will be affected by anumber of uncontrollable variables, such New Kids on the Block ticket as corporate credit spreads, the priceof scrap steel and other assets, New Kids on the Block tickets and the number and size of investmentopportunities that become available in this troubled environment." Mr.
Kenney concluded, "While the current environment will present formidablechallenges in 2009, tickets for New Kids on the Block it should also create attractive buying opportunities. Ouracquisition of 3,650 railcars from Allco in December highlights tickets for Tampa Bay Rays our ability touse market pressures and uncertainty to our advantage. GATX is positioned tonavigate through difficult operating environments while simultaneously investingat attractive valuations when others cannot - we expect to continue to executethis strategy in 2009." Milwaukee Brewers RAILRail segment profit was $58.2 million in the fourth quarter of 2008, compared to$63.5 million in the fourth quarter of 2007. The fourth quarter 2008 resultsinclude a $6.9 million provision for possible loss on a direct finance lease toa large customer which declared bankruptcy.
A loss provision of this magnitudeis unusual in Rail, as Milwaukee Brewers tickets 97 of GATXs railcars are under operating leases, whichare not reserveable assets under GAAP. Rails 2008 segment profit reflects the positive impact ofrenewal rate increases, continued strength in utilization, increased income fromscrapping, solid remarketing income, and favorable foreign exchange rates. At December 31, 2008, Rails North American fleet totaled approximately 113,000cars, including 3,650 cars added through the Allco portfolio acquisition in thefourth quarter. Fleet utilization was 97.9, up slightly from 97.8 in the priorquarter and flat with 2007 year end.