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
 September 30, 1996                                             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 October 31, 1996,  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      Nine Months Ended
                                    September 30,          September 30,
                                   1996       1995        1996       1995
                                   ----       ----        ----       ----
                                     (Unaudited)            (Unaudited)

EARNED INCOME:

Leases ......................  $  48,146   $  32,601   $ 139,813   $  99,712
Gain on sale of assets ......      7,645       5,112      25,747      29,200
Fees ........................     15,711       4,414      21,353      14,567
Interest ....................     10,448       5,348      23,023      17,697
Investment in joint ventures       7,014       7,728      15,878      14,913
Other .......................      4,691         682       9,630       2,021
                               ---------   ---------   ---------   ---------
                                  93,655      55,885     235,444     178,110
                               ---------   ---------   ---------   ---------

EXPENSES:

Interest ....................     22,716      16,920      62,541      49,988
Operating leases ............     19,785      11,529      52,404      34,812
Selling, general and
  administrative ............     15,030       9,676      41,808      29,989
Provision for losses
  on investments ............      3,000       3,000       9,501      12,000
Other .......................        997         191       3,285         505
                               ---------   ---------   ---------   ---------
                                  61,528      41,316     169,539     127,294
                               ---------   ---------   ---------   ---------

Income before income taxes ..     32,127      14,569      65,905      50,816
                               ---------   ---------   ---------   ---------

INCOME TAXES:

Current income taxes ........     10,203       2,769      22,809      16,206
Deferred income taxes .......      2,863       4,158       4,008       5,401
                               ---------   ---------   ---------   ---------
                                  13,066       6,927      26,817      21,607
                               ---------   ---------   ---------   ---------

NET INCOME ..................     19,061       7,642      39,088      29,209

Reinvested earnings at
  beginning of period .......    172,497     160,051     162,400     146,036
Dividends paid to stockholder     (6,305)     (4,099)    (16,235)    (11,651)

REINVESTED EARNINGS
   AT END OF PERIOD .........  $ 185,253   $ 163,594   $ 185,253   $ 163,594
                               =========   =========   =========   =========


                                        1

<PAGE>



GATX CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in Thousands)
                                                                          
                                                  September 30,  December 31,
                                                      1996           1995
                                                      ----           ----
                                                   (Unaudited)
ASSETS:
Cash and cash equivalents ....................   $    73,476    $    19,905
Investments:
   Direct financing leases ...................       441,106        406,950
   Leveraged leases ..........................       205,816        220,407
   Operating lease equipment
     - net of depreciation ...................       389,216        315,707
   Secured loans .............................       220,179        239,873
   Investment in joint ventures ..............       275,772        205,292
   Assets held for sale or lease .............        14,792         28,230
   Other investments .........................        76,728         77,604
   Investment in future residuals ............        20,963         23,223
   Allowance for losses on investments .......      (107,543)       (92,489)
                                                 -----------    -----------
          Total investments ..................     1,537,029      1,424,797

Due from GATX Corporation ....................        36,959         44,337
Other assets .................................        34,581         29,344
                                                 -----------    -----------
TOTAL ASSETS .................................   $ 1,682,045    $ 1,518,383
                                                 ===========    ===========
<PAGE>
LIABILITIES AND STOCKHOLDER'S EQUITY:
Accrued interest .............................   $    19,143    $    15,053
Accounts payable and other liabilities .......       115,303         80,045

Debt financing:
   Commercial paper and bankers acceptances ..       109,550        130,600
   Notes payable .............................        86,709         54,883
   Obligations under capital leases ..........        12,357         15,802
   Senior term notes .........................       735,600        679,600
                                                 -----------    -----------
          Total debt financing ...............       944,216        880,885

Nonrecourse obligations ......................       214,314        193,446
Deferred income ..............................         5,148          4,392
Deferred income taxes ........................        38,783         27,562

Stockholder's equity:
   Convertible preferred stock:
      Par value $1.00 ........................         1,027          1,027
      Additional paid-in capital .............       123,973        123,973
                                                 -----------    -----------
          Total preferred stockholder's equity       125,000        125,000

   Common Stock:
      Par value $1.00 ........................         1,031          1,031
      Additional paid-in capital .............        27,929         27,929
   Reinvested earnings .......................       185,253        162,400
   Unrealized gains on marketable
        equity securities, net of tax ........         6,190             -  
   Foreign currency translation adjustment ...          (265)           640
                                                 -----------    -----------
             Total common stockholder's equity       220,138        192,000
                                                 -----------    -----------

             Total stockholder's equity ......       345,138        317,000
                                                 -----------    -----------

TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY ...   $ 1,682,045    $ 1,518,383
                                                 ===========    ===========

                                        2

<PAGE>




GATX CAPITAL CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
(in Thousands)
                                                        Nine Months Ended
                                                          September 30,
                                                         1996       1995
                                                         ----       ----
                                                          (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:

Net income .......................................  $  39,088   $  29,209
Reconciliation to net cash provided by
     operating activities:
   Provision for losses on investments ...........      9,501      12,000
   Depreciation expense ..........................     27,357      20,655
   Provision for deferred income taxes ...........      4,008       5,401
   Gain on sale of assets ........................    (25,747)    (29,200)
   Joint venture income ..........................    (15,878)    (14,913)
   Changes in assets and liabilities:
      Due from GATX Corporation ..................      7,378       1,195
      Accrued interest, accounts payable
         and other liabilities ...................     39,348     (56,377)
      Deferred income ............................        756         (69)
   Other - net ...................................         67      (7,355)
                                                    ---------   ---------
Net cash flows provided by (used in)
  operating activities ...........................     85,878     (39,454)
                                                    ---------   ---------
<PAGE>
CASH FLOWS FROM INVESTING ACTIVITIES:

Investments in leased equipment, net of
       nonrecourse borrowings for leveraged leases   (268,512)   (179,506)
Loans extended to borrowers ......................   (108,738)    (58,244)
Other investments ................................    (81,742)    (32,649)
                                                    ---------   ---------
   Total investments .............................   (458,992)   (270,399)
                                                    ---------   ---------
Lease rents received, net of earned income and
        leveraged lease nonrecourse debt service .     81,693      40,640
Loan principal received ..........................    115,978      41,857
Proceeds from sale of assets .....................     66,175     125,050
Proceeds from sale of other assets ...............     63,807          -
Joint venture investment recovery ................     19,549      18,887
                                                    ---------   ---------
   Recovery of investments .......................    347,202     226,434
                                                    ---------   ---------
Net cash flows used in  investing activities .....   (111,790)    (43,965)
                                                    ---------   ---------

CASH FLOWS FROM FINANCING ACTIVITIES:

Net increase in short-term borrowings ............     22,776      87,652
Proceeds from issuance of long-term debt .........    168,000      80,000
Proceeds from nonrecourse obligations ............     68,413       8,209
Repayment of long-term debt ......................   (112,000)    (78,000)
Repayment of nonrecourse obligation ..............    (47,679)     (2,690)
Dividends paid to stockholder ....................    (16,235)    (11,651)
Other financing activities .......................     (3,792)     (3,397)
                                                    ---------   ---------
Net cash flows provided by financing activities ..     79,483      80,123
                                                    ---------   ---------

Net  increase  (decrease) in cash
  and cash equivalents ...........................     53,571      (3,296)
Cash and cash equivalents at
  beginning of period ............................     19,905       9,407
                                                    ---------   ---------

CASH AND CASH EQUIVALENTS AT END OF THE PERIOD ...  $  73,476   $   6,111
                                                    =========   =========

                                        3

<PAGE>



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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1996 and 1995


1.      The  consolidated  balance  sheet of GATX  Capital  Corporation  and its
        subsidiaries  ("the  Company") at December 31, 1995 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 nine-month period ended September 30, 1996 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,  from  time to time,  in  various  litigation
        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 any such
        liability  to be paid by the Company is not likely to be material to the
        Company's consolidated financial position or results of operations.



                                        4

<PAGE>



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


RESULTS OF OPERATIONS

The increase in net income for the quarter ended September 30, 1996, compared to
the  corresponding  period in the prior year,  was  primarily  due to fee income
related to asset remarketing. Net income for the nine months ended September 30,
1996, compared to the corresponding  period in the prior year,  increased due to
higher earned income from leasing and lending activities, partially offset by an
increase in interest,  operating lease, and selling,  general and administrative
expenses.

Late in 1995,  the Company  acquired  80% of the stock of Sun  Financial  Group,
Inc., which had the effect of increasing lease income,  operating lease expense,
interest  expense and  selling,  general and  administrative  expenses,  but had
minimal  effect on net income for the third  quarter or the first nine months of
1996.

New investment in leased assets,  including assets funded with off-balance sheet
financing,  had the effect of increasing  lease income and operating  lease rent
expense.  Interest  income  increased  in the  third  quarter  due  to two  loan
prepayments  and  related  fees.   Interest  expense  increased  due  to  higher
outstanding debt balances associated with portfolio growth,  partially offset by
lower  interest  rates.  Increased  spending  in support of  continued  business
growth,  primarily  in the area of human  resources,  resulted in an increase in
selling, general and administrative expense.

Gains from sales of assets are  realized  at lease end and in response to market
opportunities,   and  do  not  occur  evenly  between  periods.   The  Company's
remarketing fees are generally performance-based and can fluctuate significantly
depending  on  market  conditions  and the  timing of lease  maturities.  Fourth
quarter  income  from asset  remarketing  is expected to be lower than the third
quarter.

The  allowance  for losses  increased  during the first nine months of 1996 as a
result of a $9.5 million  provision for losses and $9.1 million in recoveries of
previously  written off investments,  offset by $3.7 million in write-downs.  At
September 30, 1996 the allowance  for losses is 6.5% of  investments,  including
off-balance  sheet assets and after  deducting  nonleveraged  lease  nonrecourse
debt.

<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

Floating  rate  debt  financing  represented  29.5%  of  the  Company's  capital
structure at September 30, 1996. These borrowings  support leases and loans tied
to LIBOR or 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 September  30, 1996,  the Company had $31.6 million
more floating rate debt than floating rate assets.

At September 30, 1996, the Company had approved unfunded  transactions  totaling
$586.4  million;  including  $127.8  million  expected to fund in 1996,  and the
remaining $458.6 million thereafter, primarily for investment in new narrow-body
aircraft.  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 from  portfolio  proceeds and has
certain  facilities  for  borrowing.  At September  30, 1996,  the Company had a
$300.0 million shelf registration for Series D medium term notes, of which $68.0
million had been issued.  The Company also had unused  capacity under its credit
agreements of $167.6 million as of September 30, 1996.


                                        5

<PAGE>



PART II.      OTHER INFORMATION
Item 1.       Legal Proceedings

The Company has  previously  disclosed  that in July 1996,  GATX/Airlog  Company
("Airlog"),  a  California  general  partnership  of which a  subsidiary  of the
Company is a partner, and the Company filed a complaint for Declaratory Judgment
against  Evergreen  International  Airlines,  Inc.  ("Evergreen")  in the United
States  District Court for the Northern  District of California  (No. C 96-2494)
seeking a  declaration  that neither the Company nor Airlog has any liability to
Evergreen as a result of the issuance of Airworthiness  Directive  96-01-03 (the
"Airworthiness  Directive") by the Federal Aviation  Administration (the "FAA").
The effect of the Airworthiness  Directive is to reduce significantly the amount
of freight that three of Evergreen's  B747 aircraft,  modified from passenger to
freight service by subcontractors of Airlog pursuant to contracts between Airlog
and Evergreen or one of its affiliates, may carry. Evergreen filed an answer and
counterclaim on August 1, 1996, asserting that Airlog and the Company are liable
to it under a number of legal theories in connection with the application of the
AD to the three aircraft.  In an initial disclosure  statement dated October 29,
1996,  and served on Airlog and the  Company  pursuant to  applicable  discovery
rules in this  litigation,  Evergreen  alleges to have suffered damages which it
has calculated as follows:  (i) out-of-service  costs amounting to approximately
$16.2  million  as of  October  15,  1996;  (ii)  denial of access to  currently
favorable capital markets,  resulting in an alleged inability to issue shares in
an inital public  offering  with a value of as much as $1.8 billion;  (iii) lost
flight revenues and profits amounting to approximately $25.8 million;  (iv) lost
business  opportunities and profits  attributable to Evergreen's  diminished 747
fleet capacity (which Evergreen has not quantified, but has indicated is subject
to  further  calculation);  and  (v)  maintenance  costs  in  responding  to the
Airworthiness  Directive (and to related airworthiness  directives issued by the
FAA) of approximately $1.6 million as of March 1996.

While the results of any litigation  are  impossible to predict with  certainty,
the Company believes that Evergreen's  claims are without merit, and that it and
Airlog have adquate defenses thereto.


Item 5.       Other Information

On October 25, 1996, the Company  acquired the remaining 50% ownership  interest
in Centron DPL Company,  Inc. Centron,  based in Eden Prairie,  Minnesota,  is a
leading network solutions  provider and value added reseller with annual revenue
approaching $200 million.

                                        6

<PAGE>


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



(a)    Exhibits:

       27.  Financial Data Schedule

(b) The  Company  filed no  reports on Form 8-K  during  the nine  months  ended
September 30, 1996.


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

<PAGE>











November 14, 1996



                                                         7

<PAGE>
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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
 September 30, 1996                                             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 October 31, 1996,  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      Nine Months Ended
                                    September 30,          September 30,
                                   1996       1995        1996       1995
                                   ----       ----        ----       ----
                                     (Unaudited)            (Unaudited)

EARNED INCOME:

Leases ......................  $  48,146   $  32,601   $ 139,813   $  99,712
Gain on sale of assets ......      7,645       5,112      25,747      29,200
Fees ........................     15,711       4,414      21,353      14,567
Interest ....................     10,448       5,348      23,023      17,697
Investment in joint ventures       7,014       7,728      15,878      14,913
Other .......................      4,691         682       9,630       2,021
                               ---------   ---------   ---------   ---------
                                  93,655      55,885     235,444     178,110
                               ---------   ---------   ---------   ---------

EXPENSES:

Interest ....................     22,716      16,920      62,541      49,988
Operating leases ............     19,785      11,529      52,404      34,812
Selling, general and
  administrative ............     15,030       9,676      41,808      29,989
Provision for losses
  on investments ............      3,000       3,000       9,501      12,000
Other .......................        997         191       3,285         505
                               ---------   ---------   ---------   ---------
                                  61,528      41,316     169,539     127,294
                               ---------   ---------   ---------   ---------

Income before income taxes ..     32,127      14,569      65,905      50,816
                               ---------   ---------   ---------   ---------

INCOME TAXES:

Current income taxes ........     10,203       2,769      22,809      16,206
Deferred income taxes .......      2,863       4,158       4,008       5,401
                               ---------   ---------   ---------   ---------
                                  13,066       6,927      26,817      21,607
                               ---------   ---------   ---------   ---------

NET INCOME ..................     19,061       7,642      39,088      29,209

Reinvested earnings at
  beginning of period .......    172,497     160,051     162,400     146,036
Dividends paid to stockholder     (6,305)     (4,099)    (16,235)    (11,651)

REINVESTED EARNINGS
   AT END OF PERIOD .........  $ 185,253   $ 163,594   $ 185,253   $ 163,594
                               =========   =========   =========   =========

                                        1
GATX CAPITAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in Thousands)
                                                                          
                                                  September 30,  December 31,
                                                      1996           1995
                                                      ----           ----
                                                   (Unaudited)
ASSETS:
Cash and cash equivalents ....................   $    73,476    $    19,905
Investments:
   Direct financing leases ...................       441,106        406,950
   Leveraged leases ..........................       205,816        220,407
   Operating lease equipment
     - net of depreciation ...................       389,216        315,707
   Secured loans .............................       220,179        239,873
   Investment in joint ventures ..............       275,772        205,292
   Assets held for sale or lease .............        14,792         28,230
   Other investments .........................        76,728         77,604
   Investment in future residuals ............        20,963         23,223
   Allowance for losses on investments .......      (107,543)       (92,489)
                                                 -----------    -----------
          Total investments ..................     1,537,029      1,424,797

Due from GATX Corporation ....................        36,959         44,337
Other assets .................................        34,581         29,344
                                                 -----------    -----------
TOTAL ASSETS .................................   $ 1,682,045    $ 1,518,383
                                                 ===========    ===========
LIABILITIES AND STOCKHOLDER'S EQUITY:
Accrued interest .............................   $    19,143    $    15,053
Accounts payable and other liabilities .......       115,303         80,045

Debt financing:
   Commercial paper and bankers acceptances ..       109,550        130,600
   Notes payable .............................        86,709         54,883
   Obligations under capital leases ..........        12,357         15,802
   Senior term notes .........................       735,600        679,600
                                                 -----------    -----------
          Total debt financing ...............       944,216        880,885

Nonrecourse obligations ......................       214,314        193,446
Deferred income ..............................         5,148          4,392
Deferred income taxes ........................        38,783         27,562

Stockholder's equity:
   Convertible preferred stock:
      Par value $1.00 ........................         1,027          1,027
      Additional paid-in capital .............       123,973        123,973
                                                 -----------    -----------
          Total preferred stockholder's equity       125,000        125,000

   Common Stock:
      Par value $1.00 ........................         1,031          1,031
      Additional paid-in capital .............        27,929         27,929
   Reinvested earnings .......................       185,253        162,400
   Unrealized gains on marketable
        equity securities, net of tax ........         6,190             -  
   Foreign currency translation adjustment ...          (265)           640
                                                 -----------    -----------
             Total common stockholder's equity       220,138        192,000
                                                 -----------    -----------

             Total stockholder's equity ......       345,138        317,000
                                                 -----------    -----------

TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY ...   $ 1,682,045    $ 1,518,383
                                                 ===========    ===========

                                        2
GATX CAPITAL CORPORATION AND SUBSIDIARIES
STATEMENTS OF CONSOLIDATED CASH FLOWS
(in Thousands)
                                                        Nine Months Ended
                                                          September 30,
                                                         1996       1995
                                                         ----       ----
                                                          (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:

Net income .......................................  $  39,088   $  29,209
Reconciliation to net cash provided by
     operating activities:
   Provision for losses on investments ...........      9,501      12,000
   Depreciation expense ..........................     27,357      20,655
   Provision for deferred income taxes ...........      4,008       5,401
   Gain on sale of assets ........................    (25,747)    (29,200)
   Joint venture income ..........................    (15,878)    (14,913)
   Changes in assets and liabilities:
      Due from GATX Corporation ..................      7,378       1,195
      Accrued interest, accounts payable
         and other liabilities ...................     39,348     (56,377)
      Deferred income ............................        756         (69)
   Other - net ...................................         67      (7,355)
                                                    ---------   ---------
Net cash flows provided by (used in)
  operating activities ...........................     85,878     (39,454)
                                                    ---------   ---------
CASH FLOWS FROM INVESTING ACTIVITIES:

Investments in leased equipment, net of
       nonrecourse borrowings for leveraged leases   (268,512)   (179,506)
Loans extended to borrowers ......................   (108,738)    (58,244)
Other investments ................................    (81,742)    (32,649)
                                                    ---------   ---------
   Total investments .............................   (458,992)   (270,399)
                                                    ---------   ---------
Lease rents received, net of earned income and
        leveraged lease nonrecourse debt service .     81,693      40,640
Loan principal received ..........................    115,978      41,857
Proceeds from sale of assets .....................     66,175     125,050
Proceeds from sale of other assets ...............     63,807          -
Joint venture investment recovery ................     19,549      18,887
                                                    ---------   ---------
   Recovery of investments .......................    347,202     226,434
                                                    ---------   ---------
Net cash flows used in  investing activities .....   (111,790)    (43,965)
                                                    ---------   ---------

CASH FLOWS FROM FINANCING ACTIVITIES:

Net increase in short-term borrowings ............     22,776      87,652
Proceeds from issuance of long-term debt .........    168,000      80,000
Proceeds from nonrecourse obligations ............     68,413       8,209
Repayment of long-term debt ......................   (112,000)    (78,000)
Repayment of nonrecourse obligation ..............    (47,679)     (2,690)
Dividends paid to stockholder ....................    (16,235)    (11,651)
Other financing activities .......................     (3,792)     (3,397)
                                                    ---------   ---------
Net cash flows provided by financing activities ..     79,483      80,123
                                                    ---------   ---------

Net  increase  (decrease) in cash
  and cash equivalents ...........................     53,571      (3,296)
Cash and cash equivalents at
  beginning of period ............................     19,905       9,407
                                                    ---------   ---------

CASH AND CASH EQUIVALENTS AT END OF THE PERIOD ...  $  73,476   $   6,111
                                                    =========   =========

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1996 and 1995

1.      The  consolidated  balance  sheet of GATX  Capital  Corporation  and its
        subsidiaries  ("the  Company") at December 31, 1995 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 nine-month period ended September 30, 1996 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,  from  time to time,  in  various  litigation
        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 any such
        liability  to be paid by the Company is not likely to be material to the
        Company's consolidated financial position or results of operations.

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

RESULTS OF OPERATIONS

The increase in net income for the quarter ended September 30, 1996, compared to
the  corresponding  period in the prior year,  was  primarily  due to fee income
related to asset remarketing. Net income for the nine months ended September 30,
1996, compared to the corresponding  period in the prior year,  increased due to
higher earned income from leasing and lending activities, partially offset by an
increase in interest,  operating lease, and selling,  general and administrative
expenses.

Late in 1995,  the Company  acquired  80% of the stock of Sun  Financial  Group,
Inc., which had the effect of increasing lease income,  operating lease expense,
interest  expense and  selling,  general and  administrative  expenses,  but had
minimal  effect on net income for the third  quarter or the first nine months of
1996.

New investment in leased assets,  including assets funded with off-balance sheet
financing,  had the effect of increasing  lease income and operating  lease rent
expense.  Interest  income  increased  in the  third  quarter  due  to two  loan
prepayments  and  related  fees.   Interest  expense  increased  due  to  higher
outstanding debt balances associated with portfolio growth,  partially offset by
lower  interest  rates.  Increased  spending  in support of  continued  business
growth,  primarily  in the area of human  resources,  resulted in an increase in
selling, general and administrative expense.

Gains from sales of assets are  realized  at lease end and in response to market
opportunities,   and  do  not  occur  evenly  between  periods.   The  Company's
remarketing fees are generally performance-based and can fluctuate significantly
depending  on  market  conditions  and the  timing of lease  maturities.  Fourth
quarter  income  from asset  remarketing  is expected to be lower than the third
quarter.

The  allowance  for losses  increased  during the first nine months of 1996 as a
result of a $9.5 million  provision for losses and $9.1 million in recoveries of
previously  written off investments,  offset by $3.7 million in write-downs.  At
September 30, 1996 the allowance  for losses is 6.5% of  investments,  including
off-balance  sheet assets and after  deducting  nonleveraged  lease  nonrecourse
debt.
LIQUIDITY AND CAPITAL RESOURCES

Floating  rate  debt  financing  represented  29.5%  of  the  Company's  capital
structure at September 30, 1996. These borrowings  support leases and loans tied
to LIBOR or 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 September  30, 1996,  the Company had $31.6 million
more floating rate debt than floating rate assets.

At September 30, 1996, the Company had approved unfunded  transactions  totaling
$586.4  million;  including  $127.8  million  expected to fund in 1996,  and the
remaining $458.6 million thereafter, primarily for investment in new narrow-body
aircraft.  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 from  portfolio  proceeds and has
certain  facilities  for  borrowing.  At September  30, 1996,  the Company had a
$300.0 million shelf registration for Series D medium term notes, of which $68.0
million had been issued.  The Company also had unused  capacity under its credit
agreements of $167.6 million as of September 30, 1996.

                                        5
PART II.      OTHER INFORMATION
Item 1.       Legal Proceedings

The Company has  previously  disclosed  that in July 1996,  GATX/Airlog  Company
("Airlog"),  a  California  general  partnership  of which a  subsidiary  of the
Company is a partner, and the Company filed a complaint for Declaratory Judgment
against  Evergreen  International  Airlines,  Inc.  ("Evergreen")  in the United
States  District Court for the Northern  District of California  (No. C 96-2494)
seeking a  declaration  that neither the Company nor Airlog has any liability to
Evergreen as a result of the issuance of Airworthiness  Directive  96-01-03 (the
"Airworthiness  Directive") by the Federal Aviation  Administration (the "FAA").
The effect of the Airworthiness  Directive is to reduce significantly the amount
of freight that three of Evergreen's  B747 aircraft,  modified from passenger to
freight service by subcontractors of Airlog pursuant to contracts between Airlog
and Evergreen or one of its affiliates, may carry. Evergreen filed an answer and
counterclaim on August 1, 1996, asserting that Airlog and the Company are liable
to it under a number of legal theories in connection with the application of the
AD to the three aircraft.  In an initial disclosure  statement dated October 29,
1996,  and served on Airlog and the  Company  pursuant to  applicable  discovery
rules in this  litigation,  Evergreen  alleges to have suffered damages which it
has calculated as follows:  (i) out-of-service  costs amounting to approximately
$16.2  million  as of  October  15,  1996;  (ii)  denial of access to  currently
favorable capital markets,  resulting in an alleged inability to issue shares in
an inital public  offering  with a value of as much as $1.8 billion;  (iii) lost
flight revenues and profits amounting to approximately $25.8 million;  (iv) lost
business  opportunities and profits  attributable to Evergreen's  diminished 747
fleet capacity (which Evergreen has not quantified, but has indicated is subject
to  further  calculation);  and  (v)  maintenance  costs  in  responding  to the
Airworthiness  Directive (and to related airworthiness  directives issued by the
FAA) of approximately $1.6 million as of March 1996.

While the results of any litigation  are  impossible to predict with  certainty,
the Company believes that Evergreen's  claims are without merit, and that it and
Airlog have adquate defenses thereto.

Item 5.       Other Information

On October 25, 1996, the Company  acquired the remaining 50% ownership  interest
in Centron DPL Company,  Inc. Centron,  based in Eden Prairie,  Minnesota,  is a
leading network solutions  provider and value added reseller with annual revenue
approaching $200 million.

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

(a)    Exhibits:

       27.  Financial Data Schedule

(b) The  Company  filed no  reports on Form 8-K  during  the nine  months  ended
September 30, 1996.

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
November 14, 1996

                                                         7