UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    Form 10-Q


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

          For the Quarter Ended              Commission File Number
                 March 31, 1997                    1-8319



                            GATX CAPITAL CORPORATION


         Incorporated in the             IRS Employer Identification Number
          State of Delaware                        94-1661392

                             Four Embarcadero Center
                             San Francisco, CA 94111
                                 (415) 955-3200



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  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.


                                Yes _X_   No__
                                     
                                          


    All Common Stock of Registrant is held by GATX Financial Services, Inc.
                (a wholly-owned subsidiary of GATX Corporation).


As of May 5, 1997,  Registrant has outstanding  1,031,250 shares of $1 par value
Common Stock.


THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND
(b) OF FORM 10-Q AND IS THEREFORE  FILING THIS FORM WITH THE REDUCED  DISCLOSURE
FORMAT.


<PAGE>

PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements

GATX CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND REINVESTED EARNINGS
(in thousands)


                                                    Three Months Ended
                                                         March 31,
                                                     1997         1996
                                                 ---------    ---------
                                                        (Unaudited)
REVENUES:

Investment and asset management                   $ 111,135    $ 65,433
Technology equipment sales and service               39,252         -
                                               ------------ -----------
                                                    150,387      65,433
                                               ------------ -----------

EXPENSES:

Interest                                             22,041      19,451
Operating leases                                     27,445      14,646
Cost of technology equipment sales and service       31,963         -
Selling, general & administrative                    26,148      12,084
Provision for losses on investments                   2,250       3,000
Other                                                 1,987         782
                                               ------------ -----------
                                                    111,834      49,963
                                               ------------ -----------

Income before income taxes                           38,553      15,470
                                               ------------ -----------

INCOME TAXES:

Current income taxes                                 14,084       5,773
Deferred income taxes                                 1,529         492
                                               ------------ -----------
                                                     15,613       6,265
                                               ------------ -----------

NET INCOME                                           22,940       9,205

Reinvested earnings at beginning of period          185,686     162,400
Dividends paid to stockholder                        (5,914)     (4,343)

                                               ------------ -----------
REINVESTED EARNINGS AT END OF PERIOD              $ 202,712   $ 167,262
                                               ============ ===========



                                       -1-
<PAGE>

GATX CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)

                                                   March 31,  December 31,
                                                       1997        1996
                                                  ----------   ----------
                                                  (Unaudited)
ASSETS:
Cash and cash equivalents                        $   28,378  $   18,482
Investments:
   Direct financing leases                          453,645     461,757
   Leveraged leases                                 209,005     257,039
   Operating lease equipment-
        net of depreciation                         425,237     429,880
   Secured loans                                    192,961     222,602
   Investment in joint ventures                     318,985     308,934
   Assets held for sale or lease                     10,254      12,393
   Other investments                                 67,334      65,506
   Investment in future residuals                    20,879      21,457
   Allowance for losses on investments             (117,509)   (114,096)
                                                ------------ -----------
          Total investments                       1,580,791   1,665,472
                                                ------------ -----------

Due from GATX Corporation                            25,361      45,147
Other assets                                        130,220     119,528

                                               ------------ -----------
TOTAL ASSETS                                    $ 1,764,750 $ 1,848,629
                                               ============ ===========


LIABILITIES AND STOCKHOLDER'S EQUITY:
Accrued interest                                $    21,776  $   15,821
Accounts payable and other liabilities              117,234     138,660
Debt financing:
   Commercial paper and bankers acceptances          28,916      13,772
   Notes payable                                     52,985      63,114
   Obligations under capital leases                  11,624      12,429
   Senior term notes                                835,600     935,600
                                               ------------ -----------
          Total debt financing                      929,125   1,024,915
                                               ------------ -----------

Nonrecourse obligations                             281,287     268,044
Deferred income                                       6,538       5,786
Deferred income taxes                                52,317      51,726

Stockholder's equity:
   Convertible preferred stock, par value $1,       125,000     125,000
      and additional paid-in capital
   Common stock, par value $1, and
     additional paid-in capital                      28,960      28,960
   Reinvested earnings                              202,712     185,686
   Foreign currency translation adjustment           (3,919)     (1,543)
   Unrealized gain on equity securities               3,720       5,574

                                               ------------ -----------
             Total stockholder's equity             356,473     343,677
                                               ------------ -----------

TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY     $  1,764,750 $ 1,848,629
                                               ============ ===========



                                      - 2 -

<PAGE>

GATX CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

                                                    Three Months Ended
                                                        March 31,
                                                    1997         1996
                                                  ----------  --------- 
                                                      (Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income                                        $  22,940     $ 9,205
Reconciliation to net cash provided by operating
  activities:
   Provision for losses on investments                2,250       3,000
   Depreciation expense                              17,528       8,364
   Provision for deferred income taxes                1,529         492
   Gain on sale of assets                           (25,489)     (6,773)
   Changes in assets and liabilities:
      Due from GATX Corporation                      19,786       8,724
      Accrued interest, accounts payable and        (15,471)    (12,917)
          other liabilities
      Deferred income                                   752         270
   Other - net                                       (7,450)      5,627

                                                ------------ ----------
Net cash flows provided by operating activities      16,375      15,992
                                                ------------ ----------

CASH FLOWS FROM INVESTING ACTIVITIES:

Investments in leased equipment, net of
 nonrecourse borrowings for leveraged leases        (51,045)    (72,392)
Loans extended to borrowers                          (2,529)    (19,295)
Other investments                                   (32,326)    (37,233)
                                                ------------ -----------
   Total investments                                (85,900)   (128,920)
                                                ------------ -----------
Lease rents received, net of earned income and
        leveraged lease nonrecourse debt service     31,483      35,462
Loan principal received                              33,246      11,328
Proceeds from sale of assets                         88,731      24,788
Joint venture investment recovery, net of earned
  income                                              1,750       1,337

                                               ------------ -----------
   Recovery of investments                          155,210      72,915
                                               ------------ -----------

Net cash flows provided by (used in)                 69,310     (56,005)
     investing activities                      ------------ -----------



CASH FLOWS FROM FINANCING ACTIVITIES:

Net increase in short-term borrowings                17,015      62,207
Proceeds from issuance of long-term debt               -         78,500
Proceeds from nonrecourse obligations                39,658      21,616
Repayment of long-term debt                        (100,000)   (105,000)
Repayment of nonrecourse obligations                (25,742)    (14,273)
Dividends paid to stockholder                        (5,914)     (4,343)
Other financing activities                             (806)     (1,058)

                                                ------------ -----------
Net cash flows (used in) provided by                (75,789)     37,649
   financing activities                         ------------ -----------


Net  increase  (decrease) in cash
  and cash equivalents                                9,896      (2,364)
Cash and cash equivalents at beginning of period     18,482      19,905

                                                ------------  -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD          $28,378    $ 17,541
                                                ============  ===========



                                      - 3 -

<PAGE>


PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements, continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997 AND 1996


  1. The  consolidated  balance  sheet of GATX  Capital  Corporation  and its
     subsidiaries  ("the  Company") at December 31, 1996 was derived from the
     audited financial statements at that date. All other consolidated financial
     statements are  unaudited  and  include  all  adjustments, consisting
     only of normal recurring items,  which  management  considers  necessary 
     for a  fair  statement  of  the consolidated  results of operations and 
     financial position for and as of the end of the indicated periods.
     Operating  results for the three-month period ended March 31,1997 are not
     necessarily indicative of the results that may be achieved for the entire 
     year.

 2.  Certain prior year amounts have been reclassified to conform to current
     presentation.

 3.  The Company is engaged in various  matters of litigation and has unresolved
     claims pending.  While the amounts claimed are substantial and the ultimate
     liability with respect to such claims cannot be determined at this time, it
     is the opinion of management that damages,  if any,  required to be paid by
     the  Company  in the  discharge  of such  liability  are not  likely  to be
     material to the Company's financial position or results of operations.




                                      - 4 -

<PAGE>


PART I.  FINANCIAL INFORMATION, continued
Item 2.  Management's Discussion and Analysis


RESULTS OF OPERATIONS

Net income for 1997's  first  quarter  exceeded  1996's  first  quarter by $13.7
million, or 149%, due primarily to higher investment and asset management income
related to asset remarketing.


Investment and Asset Management
---------------------------------
The  Company  invests  in a wide  variety  of  assets  and  generates income by
financing  equipment (through lease, loan and joint venture  investments),  from
the  remarketing  of assets,  and from fees generated by managing the investment
portfolios  of others and from  brokering or arranging  financing  transactions.
Investment and asset management  revenue  increased $45.7 million over the first
quarter of 1996.  The  primary  reason for this  increase  is income  from asset
remarketing,   which   increased  $28.7  million.   Because  asset   remarketing
opportunities  are  realized  at lease end or in  response  to  specific  market
conditions,  they  do  not  occur  evenly  between  periods  and  can  fluctuate
significantly depending on market conditions.  Higher investment balances during
1997's first quarter,  including those funded with  off-balance  sheet financing
and those of Centron DPL (which was acquired in October  1996),  contributed  to
the  remainder  of the  increase  in  investment  earnings  as well as to higher
operating lease expense.


Technology Equipment Sales and Service
----------------------------------------
With the October 1996 acquisition of the 50% of  Centron  DPL which it did not
already  own,  the  Company  entered  the technology  equipment sales and 
service  business.  Centron  is a  technology solutions  provider  that  offers
products,  technical  service  and  financial services required for building  
corporate  information  networks.  The sales and technical  services  offered by
Centron  are  included  in this  segment of the business. Lease and other
financing alternatives offered by Centron are included in the investment and 
asset management business segment.

Higher average  borrowings  (to fund new  investments  and technology  equipment
inventory)  and the  consolidation  of Centron DPL resulted in interest  expense
being higher than last year.

Selling,  general and administrative costs increased over 1996, due primarily to
higher human resource and other  administrative  costs  resulting from increased
business activity, including the impact of the acquisition of Centron DPL.

The  allowance for losses  increased  during the first three months of 1997 as a
result of a $2.3 million  provision for losses and $1.1 million in recoveries of
previously written off investments. There were no significant write-downs during
the  first  quarter.  At March  31,  1997 the  allowance  for  losses is 7.2% of
investments, including off-balance sheet assets and after deducting nonleveraged
lease nonrecourse debt.


LIQUIDITY AND CAPITAL RESOURCES

Floating  rate  debt  financing  represented  19.9%  of  the  Company's  capital
structure at March 31, 1997. These borrowings support  investments tied to LIBOR
and other similar rates.  Fluctuations  in interest  rates may impact  earnings,
either  negatively or  positively,  depending on the Company's net floating rate
asset or debt  position.  At March 31, 1997,  the Company had $43.1 million more
floating rate assets than floating rate debt.
             
At March 31, 1997, the Company had approved and unfunded  transactions  totaling
approximately $180.4 million, including approximately $162.5 million expected to
fund during the remainder of 1997. Once approved for funding,  a transaction may
not be  completed  for various  reasons,  or the  investment  may be shared with
partners or sold.

The Company  generates  cash from  operations  and  portfolio  proceeds  and has
certain  facilities for borrowing.  During the first quarter of 1997 the Company
used the cash  generated from  operations  and portfolio  proceeds to repay over
$100  million of debt  financing.  At March 31,  1997,  the  Company  had a $300
million shelf  registration for Series D medium term notes, of which $32 million
was  available,  and had unused  capacity  under its credit  agreements  of $274
million.


                                      -5-


<PAGE>

FORWARD LOOKING STATEMENTS

Certain  statements  in the  Management's  Discussion  and  Analysis  constitute
forward-looking  statements  within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although the
Company  believes  that  the  expectations  reflected  in  such  forward-looking
statements are based on reasonable  assumptions,  such statements are subject to
risks and  uncertainties,  and could cause actual  results to differ  materially
from those projected.


PART II.  OTHER INFORMATION
Item 1.   Legal Proceedings

The Company has previously reported various lawsuits filed by and against it and
GATX/Airlog  Company  ("Airlog"),  a  general  partnership  of  which a  Company
subsidiary is a partner,  arising out of the issuance of Airworthiness Directive
96-01-03  by  the  Federal   Aviation   Administration   in  January  1996  (the
"Airworthiness  Directive").  On January 2, 1997, the Company and Airlog filed a
Motion for Partial Summary Judgment with respect to certain of the counterclaims
filed by Evergreen International Airlines, Inc. ("Evergreen") in the Declaratory
Judgment  action brought by the Company and Airlog in the United States District
Court for the Northern  District of California  (No.  C96-2494).  The Motion for
Partial  Summary  Judgment is brought on the grounds  that (1) the  contracts at
issue in the  litigation  are governed by the  California  Commercial  Code (the
"Code"),  (2)  Evergreen's  contract  counterclaims  are barred by the four-year
statute  of  repose  established  by the  Code,  and (3)  Evergreen's  negligent
misrepresentation  counterclaim  is barred by the economic loss  doctrine  under
California  law. The court has held oral argument on the motion and has taken it
under advisement.

The previously reported action filed by General Electric Capital Corporation and
a subsidiary thereof  (hereinafter  collectively  "GECC"),  against the Company,
Airlog and certain other companies, has been dismissed, without prejudice. These
parties and GATX Corporation entered into a tolling agreement dated December 17,
1996 and amended in April  1997.  Under the tolling  agreement  as amended,  the
parties  thereto have agreed that any defenses of  expiration  of the statute of
limitations  or statute of repose or laches  applicable  to the causes of action
asserted by GECC are tolled, up to and including January 8, 1998.

            

PART II.  OTHER INFORMATION, continued
Item 6.   Exhibits and Reports on Form 8-K

(a)  Exhibits:

     27. Financial Data Schedule

(b) The Company  filed a current  report on Form 8-K on January 23, 1997,  under
Item 5., Other Events.


Signatures

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



         GATX CAPITAL CORPORATION



         /s/ Michael E. Cromar
         ______________________ 
         Michael E. Cromar
         Vice President and Chief Financial Officer


         /s/ Curt F. Glenn
         ______________________
         Curt F. Glenn
         Principal Accounting Officer,
         Vice President and Controller




May 12, 1997
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UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    Form 10-Q

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

          For the Quarter Ended              Commission File Number
                 March 31, 1997                    1-8319

                            GATX CAPITAL CORPORATION

         Incorporated in the             IRS Employer Identification Number
          State of Delaware                        94-1661392

                             Four Embarcadero Center
                             San Francisco, CA 94111
                                 (415) 955-3200

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  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                Yes _X_   No__
                                     
                                          

    All Common Stock of Registrant is held by GATX Financial Services, Inc.
                (a wholly-owned subsidiary of GATX Corporation).

As of May 5, 1997,  Registrant has outstanding  1,031,250 shares of $1 par value
Common Stock.

THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H(1)(a) AND
(b) OF FORM 10-Q AND IS THEREFORE  FILING THIS FORM WITH THE REDUCED  DISCLOSURE
FORMAT.
PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements

GATX CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND REINVESTED EARNINGS
(in thousands)

                                                    Three Months Ended
                                                         March 31,
                                                     1997         1996
                                                 ---------    ---------
                                                        (Unaudited)
REVENUES:

Investment and asset management                   $ 111,135    $ 65,433
Technology equipment sales and service               39,252         -
                                               ------------ -----------
                                                    150,387      65,433
                                               ------------ -----------

EXPENSES:

Interest                                             22,041      19,451
Operating leases                                     27,445      14,646
Cost of technology equipment sales and service       31,963         -
Selling, general & administrative                    26,148      12,084
Provision for losses on investments                   2,250       3,000
Other                                                 1,987         782
                                               ------------ -----------
                                                    111,834      49,963
                                               ------------ -----------

Income before income taxes                           38,553      15,470
                                               ------------ -----------

INCOME TAXES:

Current income taxes                                 14,084       5,773
Deferred income taxes                                 1,529         492
                                               ------------ -----------
                                                     15,613       6,265
                                               ------------ -----------

NET INCOME                                           22,940       9,205

Reinvested earnings at beginning of period          185,686     162,400
Dividends paid to stockholder                        (5,914)     (4,343)

                                               ------------ -----------
REINVESTED EARNINGS AT END OF PERIOD              $ 202,712   $ 167,262
                                               ============ ===========

                                       -1-
GATX CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)

                                                   March 31,  December 31,
                                                       1997        1996
                                                  ----------   ----------
                                                  (Unaudited)
ASSETS:
Cash and cash equivalents                        $   28,378  $   18,482
Investments:
   Direct financing leases                          453,645     461,757
   Leveraged leases                                 209,005     257,039
   Operating lease equipment-
        net of depreciation                         425,237     429,880
   Secured loans                                    192,961     222,602
   Investment in joint ventures                     318,985     308,934
   Assets held for sale or lease                     10,254      12,393
   Other investments                                 67,334      65,506
   Investment in future residuals                    20,879      21,457
   Allowance for losses on investments             (117,509)   (114,096)
                                                ------------ -----------
          Total investments                       1,580,791   1,665,472
                                                ------------ -----------

Due from GATX Corporation                            25,361      45,147
Other assets                                        130,220     119,528

                                               ------------ -----------
TOTAL ASSETS                                    $ 1,764,750 $ 1,848,629
                                               ============ ===========

LIABILITIES AND STOCKHOLDER'S EQUITY:
Accrued interest                                $    21,776  $   15,821
Accounts payable and other liabilities              117,234     138,660
Debt financing:
   Commercial paper and bankers acceptances          28,916      13,772
   Notes payable                                     52,985      63,114
   Obligations under capital leases                  11,624      12,429
   Senior term notes                                835,600     935,600
                                               ------------ -----------
          Total debt financing                      929,125   1,024,915
                                               ------------ -----------

Nonrecourse obligations                             281,287     268,044
Deferred income                                       6,538       5,786
Deferred income taxes                                52,317      51,726

Stockholder's equity:
   Convertible preferred stock, par value $1,       125,000     125,000
      and additional paid-in capital
   Common stock, par value $1, and
     additional paid-in capital                      28,960      28,960
   Reinvested earnings                              202,712     185,686
   Foreign currency translation adjustment           (3,919)     (1,543)
   Unrealized gain on equity securities               3,720       5,574

                                               ------------ -----------
             Total stockholder's equity             356,473     343,677
                                               ------------ -----------

TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY     $  1,764,750 $ 1,848,629
                                               ============ ===========

                                      - 2 -
GATX CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

                                                    Three Months Ended
                                                        March 31,
                                                    1997         1996
                                                  ----------  --------- 
                                                      (Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income                                        $  22,940     $ 9,205
Reconciliation to net cash provided by operating
  activities:
   Provision for losses on investments                2,250       3,000
   Depreciation expense                              17,528       8,364
   Provision for deferred income taxes                1,529         492
   Gain on sale of assets                           (25,489)     (6,773)
   Changes in assets and liabilities:
      Due from GATX Corporation                      19,786       8,724
      Accrued interest, accounts payable and        (15,471)    (12,917)
          other liabilities
      Deferred income                                   752         270
   Other - net                                       (7,450)      5,627

                                                ------------ ----------
Net cash flows provided by operating activities      16,375      15,992
                                                ------------ ----------

CASH FLOWS FROM INVESTING ACTIVITIES:

Investments in leased equipment, net of
 nonrecourse borrowings for leveraged leases        (51,045)    (72,392)
Loans extended to borrowers                          (2,529)    (19,295)
Other investments                                   (32,326)    (37,233)
                                                ------------ -----------
   Total investments                                (85,900)   (128,920)
                                                ------------ -----------
Lease rents received, net of earned income and
        leveraged lease nonrecourse debt service     31,483      35,462
Loan principal received                              33,246      11,328
Proceeds from sale of assets                         88,731      24,788
Joint venture investment recovery, net of earned
  income                                              1,750       1,337

                                               ------------ -----------
   Recovery of investments                          155,210      72,915
                                               ------------ -----------

Net cash flows provided by (used in)                 69,310     (56,005)
     investing activities                      ------------ -----------

CASH FLOWS FROM FINANCING ACTIVITIES:

Net increase in short-term borrowings                17,015      62,207
Proceeds from issuance of long-term debt               -         78,500
Proceeds from nonrecourse obligations                39,658      21,616
Repayment of long-term debt                        (100,000)   (105,000)
Repayment of nonrecourse obligations                (25,742)    (14,273)
Dividends paid to stockholder                        (5,914)     (4,343)
Other financing activities                             (806)     (1,058)

                                                ------------ -----------
Net cash flows (used in) provided by                (75,789)     37,649
   financing activities                         ------------ -----------

Net  increase  (decrease) in cash
  and cash equivalents                                9,896      (2,364)
Cash and cash equivalents at beginning of period     18,482      19,905

                                                ------------  -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD          $28,378    $ 17,541
                                                ============  ===========

                                      - 3 -
PART I.  FINANCIAL INFORMATION
Item 1.  Financial Statements, continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1997 AND 1996

  1. The  consolidated  balance  sheet of GATX  Capital  Corporation  and its
     subsidiaries  ("the  Company") at December 31, 1996 was derived from the
     audited financial statements at that date. All other consolidated financial
     statements are  unaudited  and  include  all  adjustments, consisting
     only of normal recurring items,  which  management  considers  necessary 
     for a  fair  statement  of  the consolidated  results of operations and 
     financial position for and as of the end of the indicated periods.
     Operating  results for the three-month period ended March 31,1997 are not
     necessarily indicative of the results that may be achieved for the entire 
     year.

 2.  Certain prior year amounts have been reclassified to conform to current
     presentation.

 3.  The Company is engaged in various  matters of litigation and has unresolved
     claims pending.  While the amounts claimed are substantial and the ultimate
     liability with respect to such claims cannot be determined at this time, it
     is the opinion of management that damages,  if any,  required to be paid by
     the  Company  in the  discharge  of such  liability  are not  likely  to be
     material to the Company's financial position or results of operations.

                                      - 4 -
PART I.  FINANCIAL INFORMATION, continued
Item 2.  Management's Discussion and Analysis

RESULTS OF OPERATIONS

Net income for 1997's  first  quarter  exceeded  1996's  first  quarter by $13.7
million, or 149%, due primarily to higher investment and asset management income
related to asset remarketing.

Investment and Asset Management
---------------------------------
The  Company  invests  in a wide  variety  of  assets  and  generates income by
financing  equipment (through lease, loan and joint venture  investments),  from
the  remarketing  of assets,  and from fees generated by managing the investment
portfolios  of others and from  brokering or arranging  financing  transactions.
Investment and asset management  revenue  increased $45.7 million over the first
quarter of 1996.  The  primary  reason for this  increase  is income  from asset
remarketing,   which   increased  $28.7  million.   Because  asset   remarketing
opportunities  are  realized  at lease end or in  response  to  specific  market
conditions,  they  do  not  occur  evenly  between  periods  and  can  fluctuate
significantly depending on market conditions.  Higher investment balances during
1997's first quarter,  including those funded with  off-balance  sheet financing
and those of Centron DPL (which was acquired in October  1996),  contributed  to
the  remainder  of the  increase  in  investment  earnings  as well as to higher
operating lease expense.

Technology Equipment Sales and Service
----------------------------------------
With the October 1996 acquisition of the 50% of  Centron  DPL which it did not
already  own,  the  Company  entered  the technology  equipment sales and 
service  business.  Centron  is a  technology solutions  provider  that  offers
products,  technical  service  and  financial services required for building  
corporate  information  networks.  The sales and technical  services  offered by
Centron  are  included  in this  segment of the business. Lease and other
financing alternatives offered by Centron are included in the investment and 
asset management business segment.

Higher average  borrowings  (to fund new  investments  and technology  equipment
inventory)  and the  consolidation  of Centron DPL resulted in interest  expense
being higher than last year.

Selling,  general and administrative costs increased over 1996, due primarily to
higher human resource and other  administrative  costs  resulting from increased
business activity, including the impact of the acquisition of Centron DPL.

The  allowance for losses  increased  during the first three months of 1997 as a
result of a $2.3 million  provision for losses and $1.1 million in recoveries of
previously written off investments. There were no significant write-downs during
the  first  quarter.  At March  31,  1997 the  allowance  for  losses is 7.2% of
investments, including off-balance sheet assets and after deducting nonleveraged
lease nonrecourse debt.

LIQUIDITY AND CAPITAL RESOURCES

Floating  rate  debt  financing  represented  19.9%  of  the  Company's  capital
structure at March 31, 1997. These borrowings support  investments tied to LIBOR
and other similar rates.  Fluctuations  in interest  rates may impact  earnings,
either  negatively or  positively,  depending on the Company's net floating rate
asset or debt  position.  At March 31, 1997,  the Company had $43.1 million more
floating rate assets than floating rate debt.
             
At March 31, 1997, the Company had approved and unfunded  transactions  totaling
approximately $180.4 million, including approximately $162.5 million expected to
fund during the remainder of 1997. Once approved for funding,  a transaction may
not be  completed  for various  reasons,  or the  investment  may be shared with
partners or sold.

The Company  generates  cash from  operations  and  portfolio  proceeds  and has
certain  facilities for borrowing.  During the first quarter of 1997 the Company
used the cash  generated from  operations  and portfolio  proceeds to repay over
$100  million of debt  financing.  At March 31,  1997,  the  Company  had a $300
million shelf  registration for Series D medium term notes, of which $32 million
was  available,  and had unused  capacity  under its credit  agreements  of $274
million.

                                      -5-
FORWARD LOOKING STATEMENTS

Certain  statements  in the  Management's  Discussion  and  Analysis  constitute
forward-looking  statements  within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although the
Company  believes  that  the  expectations  reflected  in  such  forward-looking
statements are based on reasonable  assumptions,  such statements are subject to
risks and  uncertainties,  and could cause actual  results to differ  materially
from those projected.

PART II.  OTHER INFORMATION
Item 1.   Legal Proceedings

The Company has previously reported various lawsuits filed by and against it and
GATX/Airlog  Company  ("Airlog"),  a  general  partnership  of  which a  Company
subsidiary is a partner,  arising out of the issuance of Airworthiness Directive
96-01-03  by  the  Federal   Aviation   Administration   in  January  1996  (the
"Airworthiness  Directive").  On January 2, 1997, the Company and Airlog filed a
Motion for Partial Summary Judgment with respect to certain of the counterclaims
filed by Evergreen International Airlines, Inc. ("Evergreen") in the Declaratory
Judgment  action brought by the Company and Airlog in the United States District
Court for the Northern  District of California  (No.  C96-2494).  The Motion for
Partial  Summary  Judgment is brought on the grounds  that (1) the  contracts at
issue in the  litigation  are governed by the  California  Commercial  Code (the
"Code"),  (2)  Evergreen's  contract  counterclaims  are barred by the four-year
statute  of  repose  established  by the  Code,  and (3)  Evergreen's  negligent
misrepresentation  counterclaim  is barred by the economic loss  doctrine  under
California  law. The court has held oral argument on the motion and has taken it
under advisement.

The previously reported action filed by General Electric Capital Corporation and
a subsidiary thereof  (hereinafter  collectively  "GECC"),  against the Company,
Airlog and certain other companies, has been dismissed, without prejudice. These
parties and GATX Corporation entered into a tolling agreement dated December 17,
1996 and amended in April  1997.  Under the tolling  agreement  as amended,  the
parties  thereto have agreed that any defenses of  expiration  of the statute of
limitations  or statute of repose or laches  applicable  to the causes of action
asserted by GECC are tolled, up to and including January 8, 1998.

            

PART II.  OTHER INFORMATION, continued
Item 6.   Exhibits and Reports on Form 8-K

(a)  Exhibits:

     27. Financial Data Schedule

(b) The Company  filed a current  report on Form 8-K on January 23, 1997,  under
Item 5., Other Events.

Signatures

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

         GATX CAPITAL CORPORATION

         /s/ Michael E. Cromar
         ______________________ 
         Michael E. Cromar
         Vice President and Chief Financial Officer

         /s/ Curt F. Glenn
         ______________________
         Curt F. Glenn
         Principal Accounting Officer,
         Vice President and Controller

May 12, 1997