SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended ~~March 31~~June 30, ~~2005~~2008

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

For the transition period from to

Commission file number: 1-5666

UNION TANK CAR COMPANY

(Exact name of registrant as specified in its charter)

Delaware		36-3104688
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)
225 W. Washington Street, Chicago, Illinois		60606
181 W. Madison Street, 26th Floor, Chicago, Illinois		60602-4510
(Address of principal executive offices)		(Zip Code)

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

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

~~Indicate~~* byNOTE: ~~check~~The ~~mark~~registrant ~~whether~~is not subject to the ~~registrant~~filing isrequirements anof ~~accelerated~~Section 13 ~~filer~~or 15(asd) ~~defined~~of inthe ~~Rule~~Securities Exchange ~~12b-2~~Act of ~~the~~1934. ~~Act)~~The registrant is a voluntary filer. ~~Yes ¨ No x~~

~~There~~Indicate isby nocheck ~~voting~~mark ~~stock~~whether ~~held~~the byregistrant ~~non-affiliates~~is ofa ~~the~~large ~~registrant.~~accelerated ~~The~~filer, ~~registrant~~an isaccelerated ~~not~~filer, a ~~subject~~non-accelerated tofiler, ~~the~~or ~~filing~~a ~~requirements~~smaller ofreporting ~~Section~~company. 13See orthe ~~15(d)~~definitions of ~~the~~“large ~~Securities~~accelerated ~~Exchange~~filer,” ~~Act~~“accelerated offiler” ~~1934.~~and ~~The~~“smaller ~~registrant~~reporting iscompany” ain ~~voluntary~~Rule ~~filer~~12b-2 of the Exchange Act.

~~The~~Large ~~registrant~~accelerated ~~meets~~filer ~~the~~¨ ~~conditions~~Accelerated ~~set~~filer ~~forth~~¨ inNon-accelerated ~~General~~filer ~~Instruction~~x H(~~1)(a)~~Do ~~and~~not ~~(b)~~check ofif ~~Form~~a ~~10-Q~~smaller ~~and~~reporting iscompany) ~~therefore~~Smaller ~~filing~~reporting ~~this~~company ~~Form with the reduced disclosure format.~~ ¨

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

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

UNION TANK CAR COMPANY AND SUBSIDIARIES

FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, 2008

INDEX

			Page
Part I. Financial Information
	Item 1.	Financial Statements	3
		Condensed consolidated statement of income- three months ended March 31, 2005 and 2004	3
		Condensed consolidated statements of income - three and six month periods ended June 30, 2008 and 2007	3
		Condensed consolidated balance sheet - March 31, 2005 and December 31, 2004	4
		Condensed consolidated balance sheets - June 30, 2008 and December 31, 2007	4
		Condensed consolidated statement of cash flows - three months ended March 31, 2005 and 2004	5
		Condensed consolidated statements of cash flows - six months ended June 30, 2008 and 2007	5
		Notes to condensed consolidated financial statements	6
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1312
	Item 4.	Controls and Procedures	16
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	20
	Item 4.	Controls and Procedures	20
Part II. Other Information
	Item 1.	Legal Proceedings	1721
	Item 5.	Other Information	17
	Item 1A.	Risk Factors	21
	Item 6.	Exhibits	17
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	*
Signatures			18
	Item 3.	Defaults Upon Senior Securities	*
	Item 4.	Submission of Matters to a Vote of Security Holders	*
	Item 5.	Other Information	*
	Item 6.	Exhibits	21
Signatures			22

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

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PART I. FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS

UNION TANK CAR COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED ~~STATEMENT~~STATEMENTS OF INCOME

(Dollars in Thousands)

(Unaudited)

	Three Months Ended March 31,
	Three Months EndedJune 30,						Six Months EndedJune 30,
	2005			2004
	2008			2007			2008			2007
Revenues
Services (leasing and other)	$	~~185~~246,~~115~~928		$	~~183~~217,~~779~~862		$	488,130		$	431,126
Net sales		215,592			164,387
Sales		340,289			287,883			627,307			596,678
		400,707			348,166
		587,217			505,745			1,115,437			1,027,804
Other income, net		3,025			2,569
Costs and expenses
		403,732			350,735
Cost of services		130,054			121,433			258,535			239,051
Costs and expenses
Cost of sales		279,240			233,947			512,350			476,264
Cost of services		107,620			117,705
Closure costs - railcar manufacturing facility		1,514			—			26,312			—
Cost of sales		179,624			133,009
General and administrative		42,096			35,204			84,760			72,278
General and administrative		39,490			35,476
Interest expense		25,229			29,695			52,165			56,960
Interest		19,619			16,777
		478,133			420,279			934,122			844,553
		346,353			302,967
Operating income		109,084			85,466			181,315			183,251
Income before income taxes		57,379			47,768
Interest income		1,705			3,361			4,822			6,688
Provision for income taxes		21,528			19,311
Other income, net		2,295			1,464			3,992			2,456
Net income		35,851			28,457
Income before income taxes and minority interest		113,084			90,291			190,129			192,395
Other comprehensive loss
Provision for income taxes		47,212			35,534			78,005			78,729
Unrealized losses on securities, net of tax		(822	)		—
Income before minority interest		65,872			54,757			112,124			113,666
Comprehensive income	$	35,029		$	28,457
Minority interest		2,775			2,183			5,104			4,577
Net income		63,097			52,574			107,020			109,089
Other comprehensive (losses) income
Unrealized (losses) gains on securities, net of tax		(95	)		(10	)		(29	)		11
Comprehensive income	$	63,002		$	52,564		$	106,991		$	109,100

See notes to condensed consolidated financial statements.

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UNION TANK CAR COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE ~~SHEET~~SHEETS

(Dollars in Thousands)

	March 31, 2005			December 31, 2004
	June 30,2008			December 31,2007
	(Unaudited)
Assets
Cash and cash equivalents	$	~~122~~151,~~926~~170		$	98122,~~336~~114
Short-term investments		—			45172,~~429~~335
Available-for-sale securities		232,047			244,896
Accounts receivable, net of allowances of $4,748 ($6,079 at December 31, 2007)		280,196			209,034
Accounts receivable, primarily due within one year		175,918			172,689
Accounts and notes receivable, affiliate		43,718			43,990
Accounts and notes receivable, affiliates		44,597			43,626
Inventories, net of LIFO reserves of $137,839 ($116,365 at December 31, 2007)		222,058			203,180
Inventories, net of LIFO reserves of $80,145 ($74,379 at December 31, 2004)		168,909			146,944
Prepaid expenses and deferred charges		24,496			12,442
Prepaid expenses and deferred charges		14,348			13,292
Railcar lease fleet, net		3,327,873			3,156,456
Advances to parent company, principally at LIBOR plus 1%		48,540			150,246
Intermodal tank container lease fleet, net		409,969			374,828
Railcar lease fleet, net		1,918,876			1,804,350
Other fixed assets, net		277,173			290,995
Intermodal tank container lease fleet, net		327,173			323,601
Other assets		58,812			53,170
Other fixed assets, net		203,316			198,986
Total assets	$	4,795,465		$	4,638,544
Other assets		35,154			35,422
Total assets	$	3,291,804		$	3,277,817
Liabilities and Stockholder’s Equity
Accounts payable	$	90171,~~555~~643		$	74119,~~606~~677
Accrued liabilities		~~263~~197,~~872~~262			~~265~~205,~~480~~475
Borrowed debt, including $64,642 due within one year ($34,147 at December 31, 2004)		1,157,696			1,167,251
Advances from parent and affiliates		1,144,074			1,055,651
		1,512,123			1,507,337
Debt, including $215,112 due within one year ($107,488 at December 31, 2007)		1,055,155			1,137,589
Deferred income taxes and investment tax credits		~~593~~814,~~739~~985			~~596~~745,~~126~~901
Minority interest		98,914			97,355
Total liabilities		3,383,119			3,264,293
Minority interest		115,852			110,748
Stockholder’s equity
Common stock and additional capital		265,061			265,061
Common stock		106,689			106,689
Retained earnings		823,190			812,339
Additional capital		169,455			169,455
Unrealized losses on available-for-sale securities, net		(1,223	)		(401	)
Retained earnings		1,020,484			987,464
Total stockholder’s equity		1,087,028			1,076,999
Accumulated other comprehensive losses		(134	)		(105	)
Total liabilities and stockholder’s equity	$	3,291,804		$	3,277,817
Total stockholder’s equity		1,296,494			1,263,503
Total liabilities and stockholder’s equity	$	4,795,465		$	4,638,544

See notes to condensed consolidated financial statements.

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UNION TANK CAR COMPANY AND SUBSIDIARIES

CONDENSED CONSOLIDATED ~~STATEMENT~~STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

(Unaudited)

	Three Months Ended March 31,
	Six Months EndedJune 30,
	2005			2004
	2008			2007
Cash flows from operating activities:
Net income	$	35107,~~851~~020		$	28109,~~457~~089
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		42117,~~083~~293			39104,~~797~~994
Deferred taxes		(1,605	)		(1,438	)
Deferred income taxes		70,059			35,877
Gain on disposition of lease fleet and other fixed assets		(2,809	)		(2,452	)
Gains on disposition of lease fleet and other fixed assets		(13,211	)		(9,166	)
Other non-cash income and expenses		2,383			2,120
Write-off of building and equipment		10,905			—
Changes in assets and liabilities:
Other non-cash income and expenses		8,137			5,555
Accounts receivable		(5,056	)		(21,073	)
Changes in assets and liabilities
Inventories		(22,095	)		(2,690	)
Accounts receivable		(74,561	)		(18,429	)
Prepaid expenses and deferred charges		(1,132	)		1,188
Inventories		(18,507	)		11,493
Accounts payable and accrued expenses		15,060			(10,962	)
Prepaid expenses and deferred charges		(12,364	)		(1,961	)
Net cash provided by operating activities		62,680			32,947
Accounts payable and accrued expenses		45,701			(30,534	)
Net cash provided by operating activities		240,472			206,918
Cash flows from investing activities:
Construction and purchase of lease fleet and other fixed assets		(168,199	)		(77,100	)
Construction and purchase of lease fleet		(314,171	)		(345,631	)
Decrease in short-term investments		45,429			62,606
Construction and purchase of other fixed assets		(16,342	)		(17,239	)
Decrease in available-for-sale securities		11,586			—
Proceeds from sales of available-for-sale securities		—			24,462
Decrease in advance to parent		103,091			19,368
Purchases of short-term investments		—			(53,293	)
Increase in other assets		(215	)		(183	)
Proceeds from sales of short-term investments		171,683			130,618
Proceeds from disposals of lease fleet and other fixed assets		5,043			7,883
Increase in other assets		(6,389	)		(1,470	)
Net cash (used in) provided by investing activities		(3,265	)		12,574
Proceeds from disposals of lease fleet and other fixed assets		21,291			17,709
Purchases of businesses, net of cash acquired		—			(35,523	)
Net cash used in investing activities		(143,928	)		(280,367	)
Cash flows from financing activities:
Principal payments of borrowed debt		(9,555	)		(24,325	)
Increase in advances from parent and affiliates		90,615			372,895
Cash dividends		(25,000	)		(20,000	)
Principal payments of debt		(82,434	)		(167,010	)
Net cash used in financing activities		(34,555	)		(44,325	)
Cash dividends		(74,000	)		(76,000	)
Effect of exchange rates on cash and cash equivalents		(270	)		(1,152	)
Net cash (used in) provided by financing activities		(65,819	)		129,885
Net increase in cash and cash equivalents		24,590			44
Effect of exchange rates on cash and cash equivalents		(1,669	)		12,777
Cash and cash equivalents at beginning of year		98,336			56,197
Net increase in cash and cash equivalents		29,056			69,213
Cash and cash equivalents at end of period	$	122,926		$	56,241
Cash and cash equivalents at beginning of year		122,114			165,588
Cash and cash equivalents at end of period	$	151,170		$	234,801
Cash paid during the period for:
Interest (net of amount capitalized)	$	17,342		$	13,978
Interest	$	34,177		$	42,155
Income taxes		141,~~263~~970			2139,~~189~~934
Non-cash item:
Cumulative effect of adopting FIN 48	$	—		$	17,073

See notes to condensed consolidated financial statements.

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UNION TANK CAR COMPANY AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in Thousands)

(Unaudited)

1. UNION TANK CAR COMPANY (the “Company”) is a wholly-owned subsidiary of Marmon Holdings, Inc. (“Holdings”), all of the stock of which is owned, directly or indirectly, by trusts for the benefit of certain members of the Pritzker family. As used herein, “Pritzker family” refers to the lineal descendants of Nicholas J. Pritzker, deceased.Ownership

2.UNION ~~The~~TANK ~~accompanying~~CAR ~~unaudited~~COMPANY ~~condensed~~(the “Company”) ~~consolidated~~is ~~financial~~a ~~statements~~wholly ~~include~~owned ~~all~~subsidiary ~~adjustments~~of Marmon Holdings, ~~consisting~~Inc. of(“Holdings”). ~~normal~~On ~~recurring~~March 18, ~~accruals~~2008, ~~which~~Berkshire ~~the~~Hathaway ~~Company~~Inc. ~~considers~~(“Berkshire”) ~~necessary~~purchased ~~for~~60% aof ~~fair~~Holdings ~~presentation~~for $4,500,000. ~~These~~On ~~interim~~April 30, ~~financial~~2008, ~~statements~~Berkshire purchased doan ~~not~~additional ~~include~~4.4% ~~all~~of ~~disclosures~~Holdings ~~normally~~for ~~provided~~$329,000. inAfter ~~annual~~adjustments ~~financial~~for ~~statements~~other common share changes, Berkshire owns 63.6% ~~Accordingly~~of Holdings’ common stock as of June 30, ~~they~~2008. ~~should~~The beremaining ~~read~~shares inof ~~conjunction~~Holdings ~~with~~will ~~the~~be ~~consolidated~~acquired ~~financial~~by ~~statements~~Berkshire through ~~and~~staged ~~notes~~acquisitions ~~thereto~~over ina ~~the~~five ~~Company’s~~to ~~2004~~six ~~Annual~~year ~~Report~~period for consideration based on ~~Form~~future ~~10-K~~earnings of Holdings.

~~Certain~~Prior ~~prior~~to ~~year~~the transactions ~~amounts~~discussed ~~have~~above, ~~been~~substantially ~~reclassified~~all toof ~~conform~~the stock of Holdings was owned, directly or indirectly, by trusts for the benefit of certain members of the Pritzker family. As used herein, “Pritzker family” refers to the ~~current~~lineal descendants ~~year~~of ~~presentation~~Nicholas J. Pritzker, deceased.

~~The~~2. ~~2005~~Basis ~~interim results presented herein are not necessarily indicative~~ of ~~the results of operations for the full year 2005.~~ Presentation

3.The Asaccompanying ~~more~~unaudited condensed ~~fully~~consolidated ~~described~~financial instatements ~~the~~reflect ~~Company’s~~all ~~2004~~adjustments ~~Annual~~of ~~Report~~a onnormal ~~Form~~recurring ~~10-K,~~nature ~~under~~necessary anfor ~~arrangement~~a ~~with~~fair ~~Holdings,~~presentation of the ~~Company~~results isfor ~~included in~~ the ~~consolidated~~interim ~~federal~~periods. ~~income~~These ~~tax~~interim ~~return~~financial ofstatements ~~Holdings.~~do Asnot ainclude ~~member~~all ofdisclosures anormally provided ~~consolidated~~in ~~federal~~annual ~~income~~financial ~~tax~~statements. ~~group~~Accordingly, ~~the~~they ~~Company~~should isbe ~~contingently~~read ~~liable~~in ~~for~~conjunction with the ~~federal~~consolidated ~~income~~financial ~~taxes~~statements ofand notes thereto in the ~~other~~Company’s ~~members~~Annual ofReport on Form 10-K for the ~~group~~year ended December 31, 2007.

4. The ~~Company~~2008 ~~and~~interim ~~its~~results ~~subsidiaries~~presented ~~have~~herein ~~been named as defendants in a number of lawsuits, and certain claims~~ are ~~pending.~~not ~~The~~necessarily ~~Company~~indicative ~~has accrued what it reasonably expects to pay in resolution~~ of ~~these matters and, in~~ the ~~opinion~~results of ~~management,~~operations ~~their~~for ~~ultimate resolution will not have a material adverse effect on~~ the ~~Company’s~~full ~~consolidated~~year ~~financial position or results of operations~~2008.

53. ~~Foreign~~Significant ~~currency~~Accounting translation adjustments and transaction gains and losses are borne by the Company’s parent. For the three months ended March 31, 2005 and 2004, the Company’s parent absorbed gains of $168 and $325, respectively.Policies

6.Revenue ~~The Company’s short-term investments consist of commercial paper with original maturities between four and six months. No such investments were held at March 31, 2005.~~Recognition

7.Revenue ~~The~~from ~~Company’s~~sales ~~foreign~~of ~~subsidiaries~~products ~~periodically~~is ~~enter~~generally ~~into~~recognized ~~foreign~~upon ~~currency~~shipment ~~forward~~to ~~contracts~~customers towhich ~~hedge~~is ~~against~~when ~~currency~~title ~~exchange~~and ~~rate~~the ~~exposures~~risks and rewards of ownership are passed on to the customers. ~~There~~Such ~~were~~revenue nois ~~foreign~~based ~~currency~~upon ~~forward~~determinable sales prices and is recognized only upon collectibility being reasonably assured. Certain long-term contracts ~~outstanding~~are ataccounted ~~March~~for ~~31,~~under ~~2005~~the completed contract method when the Company is unable to reasonably forecast costs and ~~December~~the ~~31,~~time ~~2004~~required to complete those contracts.

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83. ~~Consolidating~~Significant ~~Financial~~Accounting ~~Information~~Policies (Continued)

~~The following condensed consolidating statements are provided because Procor Limited, a~~Lessor ~~wholly-owned~~Accounting subsidiary of the Company, has issued three separate series of equipment trust certificates, guaranteed by Union Tank Car Company, as part of certain public debt offerings issued by Union Tank Car Company in the United States.

~~Effective~~Most ~~January~~of ~~1, 2005,~~ the Company’s ~~tank~~railcar ~~car~~and ~~manufacturing~~intermodal ~~business was~~tank ~~transferred~~container ~~from~~leases ~~Union~~with ~~Tank~~its ~~Car~~customers ~~Company~~are toclassified ~~UTLX~~as ~~Manufacturing,~~operating ~~Inc~~leases., Aggregate arentals ~~new~~from ~~wholly-owned~~operating ~~subsidiary~~leases are reported as revenue ratably over the life of the ~~Company~~lease ~~which~~as collectibility is ~~now~~reasonably ~~included~~assured. inExpenses, ~~Other~~including ~~Subsidiaries~~depreciation and maintenance, are charged as incurred.

~~Condensed~~The ~~consolidating~~Company ~~statements~~periodically reviews and evaluates the ultimate realization of ~~income~~the receivables and properties under lease contracts. Allowances for ~~the~~losses ~~three~~are maintained ~~months~~at ~~ended~~amounts ~~March~~necessary 31to cover anticipated losses based on management’s assessment of various factors, ~~2005~~including loss experience and ~~2004~~review ~~are~~of asspecific ~~follows:~~accounts.

~~Three~~Foreign ~~Months~~Currency ~~Ended~~Translation ~~March 31, 2005~~

	Union Tank Car Company			Procor Limited			Other Subsidiaries		Eliminations			Consolidated
Revenues
Services	$	125,964		$	4,780		$	75,250	$	(20,879	)	$	185,115
Net sales		—			—			285,826		(70,234	)		215,592
		125,964			4,780			361,076		(91,113	)		400,707
Other income, net		24,820			657			220		(22,672	)		3,025
		150,784			5,437			361,296		(113,785	)		403,732
Costs and expenses
Cost of services		79,502			5,643			43,354		(20,879	)		107,620
Cost of sales		(8	)		—			245,089		(65,457	)		179,624
General and administrative		12,271			537			27,258		(576	)		39,490
Interest		15,341			566			3,712		—			19,619
		107,106			6,746			319,413		(86,912	)		346,353
Income before income taxes		43,678			(1,309	)		41,883		(26,873	)		57,379
Provision for income taxes		7,827			(381	)		15,482		(1,400	)		21,528
Net income	$	35,851		$	(928	)	$	26,401	$	(25,473	)	$	35,851

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

~~Three~~Foreign ~~Months~~currency ~~Ended~~translation adjustments and transaction gains and losses are borne by Holdings. For the six months ended ~~March~~June 30, 312008 and 2007, ~~2004~~Holdings absorbed a loss of $5,486 and a gain of $8,668, respectively.

	Union Tank Car Company		Procor Limited			Other Subsidiaries		Eliminations			Consolidated
Revenues
Services	$	117,669	$	5,594		$	78,725	$	(18,209	)	$	183,779
Net sales		6,527		189			161,088		(3,417	)		164,387
		124,196		5,783			239,813		(21,626	)		348,166
Other income, net		19,542		668			815		(18,456	)		2,569
		143,738		6,451			240,628		(40,082	)		350,735
Costs and expenses
Cost of services		78,035		6,789			51,090		(18,209	)		117,705
Cost of sales		6,400		107			129,919		(3,417	)		133,009
General and administrative		9,553		1,251			24,672		—			35,476
Interest		12,747		596			3,434		—			16,777
		106,735		8,743			209,115		(21,626	)		302,967
Income before income taxes		37,003		(2,292	)		31,513		(18,456	)		47,768
Provision for income taxes		8,546		(592	)		11,357		—			19,311
Net income	$	28,457	$	(1,700	)	$	20,156	$	(18,456	)	$	28,457

Income Taxes

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

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

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

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83. ~~Consolidating~~Significant ~~Financial~~Accounting ~~Information~~Policies (Continued)

~~Condensed~~Accounts Receivable ~~consolidating balance sheets as of March 31, 2005~~ and ~~December~~Allowance ~~31,~~for ~~2004~~Doubtful ~~are~~Accounts ~~as follows:~~

~~March~~The 31Company carries its accounts receivable at their face amounts less an allowance for doubtful accounts. On a regular basis, ~~2005~~the Company evaluates its accounts receivable as well as establishes the allowance for doubtful accounts based on a combination of specific customer circumstances and credit conditions and based on a history of write-offs and collections. A receivable is considered past due if payments have not been received within agreed upon invoice terms. Uncollectible receivables are charged against the allowance for doubtful accounts when approved by management after all collection efforts have been exhausted.

	Union Tank Car Company			Procor Limited			Other Subsidiaries			Eliminations			Consolidated
Assets
Cash and cash equivalents	$	33,043		$	86,020		$	3,863		$	—		$	122,926
Available-for-sale securities		231,132			—			915			—			232,047
Accounts receivable		40,832			1,693			211,071			(77,678	)		175,918
Accounts and notes receivable, affiliates		—			915			43,682			—			44,597
Inventories, net		11,703			1,778			155,428			—			168,909
Prepaid expenses and deferred charges		4,070			285			9,993			—			14,348
Advances (from) to parent		(209,467	)		(80,397	)		340,898			(2,494	)		48,540
Railcar lease fleet, net		1,679,945			31,128			208,864			(1,061	)		1,918,876
Intermodal tank container lease fleet, net		—			—			327,173			—			327,173
Other fixed assets, net		42,795			14,859			145,662			—			203,316
Investment in subsidiaries		889,236			75,455			86,083			(1,050,774	)		—
Other assets		—			3,089			32,065			—			35,154
Total assets	$	2,723,289		$	134,825		$	1,565,697		$	(1,132,007	)	$	3,291,804
Liabilities and Stockholder’s Equity
Accounts payable	$	62,453		$	15,912		$	89,452		$	(77,262	)	$	90,555
Accrued liabilities		162,363			3,874			95,635			2,000			263,872
Borrowed debt		1,001,089			18,479			138,128			—			1,157,696
		1,225,905			38,265			323,215			(75,262	)		1,512,123
Deferred income taxes and investment tax credits		445,559			22,642			125,538			—			593,739
Minority interest		—			—			98,914			—			98,914
Stockholder’s equity
Common stock and additional capital		358,475			13,345			358,862			(465,621	)		265,061
Retained earnings		701,768			61,270			651,372			(591,220	)		823,190
Unrealized losses on available-for-sale securities, net		(1,218	)		—			(5	)		—			(1,223	)
Equity adjustment from foreign currency translation		(7,200	)		(697	)		7,801			96			—
Total stockholder’s equity		1,051,825			73,918			1,018,030			(1,056,745	)		1,087,028
Total liabilities and stockholder’s equity	$	2,723,289		$	134,825		$	1,565,697		$	(1,132,007	)	$	3,291,804

Inventories

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


	June 30, 2008			December 31, 2007
Raw materials	$	40,081		$	37,564
Work-in-process		38,303			39,341
Finished goods		286,160			247,972
Obsolescence and other reserves		(4,647	)		(5,332	)

		359,897			319,545
LIFO reserve		(137,839	)		(116,365	)

Net	$	222,058		$	203,180

Property and Equipment

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

Asset Impairment

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

- 8 -

83. ~~Consolidating~~Significant ~~Financial~~Accounting ~~Information~~Policies (Continued)

~~December~~Lease ~~31,~~Fleet and ~~2004~~Other Fixed Assets

	Union Tank Car Company			Procor Limited			Other Subsidiaries			Eliminations			Consolidated
	June 30,2008			December 31,2007
Assets
Railcar lease fleet
Cash and cash equivalents	$	61,663		$	33,123		$	3,550		$	—		$	98,336
Gross cost	$	5,273,289		$	5,056,138
Short-term investments		—			45,429			—			—			45,429
Less accumulated depreciation		(1,945,416	)		(1,899,682	)
Available-for-sale securities		243,986			—			910			—			244,896
	$	3,327,873		$	3,156,456
Accounts receivable		39,971			2,668			193,962			(63,912	)		172,689
Intermodal tank container lease fleet
Accounts and notes receivable, affiliates		—			—			43,626			—			43,626
Gross cost	$	596,838		$	546,897
Inventories, net		44,780			1,924			100,240			—			146,944
Less accumulated depreciation		(186,869	)		(172,069	)
Prepaid expenses and deferred charges		4,592			2,840			5,860			—			13,292
	$	409,969		$	374,828
Advances (from) to parent		(122,196	)		(73,143	)		345,133			452			150,246
Other fixed assets
Railcar lease fleet, net		1,557,425			31,661			215,995			(731	)		1,804,350
Gross cost	$	720,782		$	711,627
Intermodal tank container lease fleet, net		—			—			323,601			—			323,601
Less accumulated depreciation		(443,609	)		(420,632	)
Other fixed assets, net		90,524			15,303			93,159			—			198,986
	$	277,173		$	290,995
Investment in subsidiaries		813,631			75,455			77,512			(966,598	)		—
Other assets		13			3,792			31,617			—			35,422
Total assets	$	2,734,389		$	139,052		$	1,435,165		$	(1,030,789	)	$	3,277,817
Liabilities and Stockholder’s Equity
Accounts payable	$	55,474		$	17,132		$	65,589		$	(63,589	)	$	74,606
Accrued liabilities		185,005			5,505			72,403			2,567			265,480
Borrowed debt		1,010,625			18,479			138,147			—			1,167,251
		1,251,104			41,116			276,139			(61,022	)		1,507,337
Deferred income taxes and investment tax credits		442,416			23,453			130,257			—			596,126
Minority interest		—			—			97,355			—			97,355
Stockholder’s equity
Common stock and additional capital		358,475			13,345			358,799			(465,558	)		265,061
Retained earnings		691,547			61,830			563,267			(504,305	)		812,339
Unrealized losses on available-for-sale securities, net		(399	)		—			(2	)		—			(401	)
Equity adjustment from foreign currency translation		(8,754	)		(692	)		9,350			96			—
Total stockholder’s equity		1,040,869			74,483			931,414			(969,767	)		1,076,999
Total liabilities and stockholder’s equity	$	2,734,389		$	139,052		$	1,435,165		$	(1,030,789	)	$	3,277,817

Legal Matters

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

Use of Estimates

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

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84. ~~Consolidating~~Closure ~~Financial~~Costs ~~Information~~– ~~(Continued)~~Railcar Manufacturing Facility

~~Condensed~~As ~~consolidating~~a result ~~statements~~ of ~~cash~~a ~~flows~~declining market for tank car sales and leases and long-term demand estimates, the ~~three~~Company ~~months~~announced ~~ended~~on March 28, 312008 the closure of its railcar manufacturing facility in East Chicago, ~~2005~~Indiana effective at the end of May 2008. The ~~and~~charges ~~2004~~related to the closure are detailed as follows:

Three Months Ended March 31, 2005


	Three Months Ended June 30, 2008		Six Months Ended June 30, 2008
Write-off of building and equipment	$	—	$	10,905
Severance and fringe benefits		—		11,141
Environmental related costs		—		3,758
Reduction in post-retirement liabilities		—		(1,806	)
Relocation costs for equipment, etc.		1,126		1,126
Other		388		1,188

Total	$	1,514	$	26,312

	Union Tank Car Company			Procor Limited			Other Subsidiaries			Eliminations			Consolidated
Net cash provided by (used in) operating activities:	$	49,252		$	(27	)	$	12,857		$	598		$	62,680
Cash flows from investing activities:
Construction and purchase of lease fleet and other fixed assets		(146,202	)		(180	)		(21,219	)		(598	)		(168,199	)
Decrease in short-term investments		—			45,429			—			—			45,429
Decrease (increase) in available-for-sale securities		11,594			—			(8	)		—			11,586
Decrease in advance to parent		88,657			7,254			7,180			—			103,091
Decrease (increase) in other assets		—			678			(893	)		—			(215	)
Proceeds from disposals of lease fleet and other fixed assets		2,615			13			2,415			—			5,043
Net cash (used in) provided by investing activities		(43,336	)		53,194			(12,525	)		(598	)		(3,265	)
Cash flows from financing activities:
Principal payments of borrowed debt		(9,536	)		—			(19	)		—			(9,555	)
Cash dividends		(25,000	)		—			—			—			(25,000	)
Net cash used in financing activities		(34,536	)		—			(19	)		—			(34,555	)
Effect of exchange rates on cash and cash equivalents		—			(270	)		—			—			(270	)
Net (decrease) increase in cash and cash equivalents		(28,620	)		52,897			313			—			24,590
Cash and cash equivalents at beginning of year		61,663			33,123			3,550			—			98,336
Cash and cash equivalents at end of period	$	33,043		$	86,020		$	3,863		$	—		$	122,926

The Company estimates an additional $5,100 of period costs will be incurred over the remainder of 2008 for this closure.

5.	Segment Information

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


	Railcar		Metals Distribution		Intermodal Tank Container Leasing		All Other		Consolidated Totals
	(Dollars in Millions)
Three months ended June 30, 2008
Services revenue	$	185.8	$	2.7	$	33.9	$	24.5	$	246.9
Sales revenue		4.6		275.7		—		60.0		340.3
Income before income taxes and minority interest		63.7		26.1		12.8		10.5		113.1

Three months ended June 30, 2007
Services revenue	$	165.5	$	2.7	$	30.3	$	19.4	$	217.9
Sales revenue		6.0		242.3		—		39.6		287.9
Income before income taxes and minority interest		53.5		25.1		9.8		1.9		90.3

Six months ended June 30, 2008
Services revenue	$	368.9	$	5.1	$	66.6	$	47.5	$	488.1
Sales revenue		4.9		516.6		—		105.8		627.3
Income before income taxes and minority interest		99.1		50.1		25.3		15.6		190.1

Six months ended June 30, 2007
Services revenue	$	329.0	$	4.6	$	59.8	$	37.7	$	431.1
Sales revenue		16.2		462.2		—		118.3		596.7
Income before income taxes and minority interest		99.3		48.5		19.4		25.2		192.4

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86. ~~Consolidating~~Completed ~~Financial Information (Continued)~~ Contracts

~~Three~~Certain ~~Months~~projects ~~Ended~~are ~~March~~accounted ~~31,~~for using ~~2004~~the completed contract method because of the inherent difficulty and uncertainty in estimating the total cost of completion and the extent of progress toward completion. Net billings in excess of costs included in accrued liabilities in the condensed consolidated balance sheets are as follows:

	Union Tank Car Company			Procor Limited			Other Subsidiaries			Eliminations			Consolidated
	June 30,2008			December 31,2007
Net cash provided by operating activities:	$	1,112		$	3,067		$	28,768		$	—		$	32,947
Costs incurred	$	7,915		$	4,166
Cash flows from investing activities:
Deferred revenue		(13,434	)		(5,975	)
Construction and purchase of lease fleet and other fixed assets		(58,753	)		(318	)		(18,029	)		—			(77,100	)
Net billings in excess of costs	$	(5,519	)	$	(1,809	)
Decrease in short-term investments		—			62,606			—			—			62,606
Decrease (increase) in advance to parent		98,002			(39,685	)		41,341			(80,290	)		19,368
Increase in other assets		—			—			(183	)		—			(183	)
Proceeds from disposals of lease fleet and other fixed assets		3,931			16			3,936			—			7,883
Net cash provided by (used in) investing activities		43,180			22,619			27,065			(80,290	)		12,574
Cash flows from financing activities:
Principal payments of borrowed debt		(24,285	)		—			(40	)		—			(24,325	)
Cash dividends		(20,000	)		(25,115	)		(55,175	)		80,290			(20,000	)
Net cash (used in) provided by financing activities		(44,285	)		(25,115	)		(55,215	)		80,290			(44,325	)
Effect of exchange rates on cash and cash equivalents		—			(1,156	)		4			—			(1,152	)
Net increase (decrease) in cash and cash equivalents		7			(585	)		622			—			44
Cash and cash equivalents at beginning of year		82			48,759			7,356			—			56,197
Cash and cash equivalents at end of period	$	89		$	48,174		$	7,978		$	—		$	56,241

7.	Commitments and Contingencies

The Company’s Canadian subsidiaries have a demand credit facility of approximately $34,500 available on a no-fee basis at June 30, 2008. Holdings is a guarantor of this demand credit facility. At June 30, 2008, $11,151 of letters of credit were outstanding; no amounts were outstanding for overdrafts or borrowings.

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

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

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


	Six Months Ended June 30,
	2008			2007
Balance at beginning of year	$	1,715		$	769
Warranties issued		745			2,539
Settlements/reversals		(603	)		(1,683	)

Balance at end of period	$	1,857		$	1,625

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

The Company has early buyout options for railcars under certain sale-leaseback financing arrangements. The exercise price for these buyout options are $137,740, $29,351 and $92,055 in 2009, 2010 and 2012, respectively.

- 11 -

98. ~~Segment~~Consolidating ~~Information~~Financial Information

	Railcar		Metals Distribution		Intermodal Tank Container Leasing		AllOther		Consolidated Totals
	(Dollars in Millions)
Three months ended March 31, 2005
Services revenue	$	142.0	$	2.1	$	25.2	$	15.8	$	185.1
Net sales revenue		14.9		168.2		—		32.5		215.6
Income before income taxes		30.4		12.8		5.1		9.1		57.4
Three months ended March 31, 2004
Services revenue	$	135.7	$	1.9	$	23.4	$	22.8	$	183.8
Net sales revenue		6.5		125.6		—		32.3		164.4
Income before income taxes		28.6		9.4		3.5		6.3		47.8

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

10. The Company has one residual value guarantee totaling $2.1 million until March 2006, several performance guarantees totaling $3.0 million until June 2007, and several standby letters of credit totaling $17.9 million.

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

	Three Months Ended March 31,
	2005			2004
	(Dollars in Thousands)
Balance, beginning of year	$	1,687		$	602
Warranties issued		83			86
Settlements		(106	)		(82	)
Balance, end of period	$	1,664		$	606

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

11. On April 29, 2005, the Company sold its sulfur-based fertilizer business, which operated in the United States and Canada, for a sale price of approximately $9.0 million, which amount is subject to certain post-closing adjustments.

- 12 -

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the Unaudited Condensed Consolidated Financial Statements and the related notes that appear elsewhere in this document as well as our ~~2004~~ Annual Report on Form 10-K for the year ended December 31, 2007 filed with the Securities and Exchange Commission (“SEC”) inon March 20, ~~2005.~~2008 and our quarterly report for the period ended March 31, 2008 filed with the SEC on May 12, 2008.

Forward-Looking Statements

Certain ~~statements~~ statements contained in this quarterly report on Form 10-Q for the quarter ended ~~March 31~~June 30, ~~2005~~2008 may include certain forward-looking ~~information~~ statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including (without limitation) statements with respect to anticipated future operating and financial performance, growth and acquisition opportunities and other similar forecasts and statements of expectation. Words such as “expects”, “anticipates”, “intends”, “plans”, “~~will”, “~~believes”, “seeks”, “estimates”, and “should” and variations of these words and similar expressions, are intended to identify these forward-looking statements. Forward-looking statements made by the Company and its management are based on estimates, projections, beliefs and assumptions of management at the time of such statements and are not guarantees of future performance. The Company disclaims any obligation to update or revise any forward-looking statement based on the occurrence of future events, the receipt of new information or otherwise. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements made by the Company and its management as a result of a number of risks, uncertainties and assumptions. ~~Representative~~In ~~examples~~addition, ofcertain ~~these~~ factors, ~~include~~including ~~(without~~risk factors ~~limitation)~~identified ~~general~~in ~~industry~~“Item ~~and~~1A—Risk ~~economic~~Factors” ~~conditions, unanticipated changes~~ in the ~~markets~~Company’s ~~served~~Annual byReport ~~the~~on ~~Company~~Form 10-K ~~(such~~for as the ~~railcar~~year ~~leasing,~~ended ~~service and sales~~December 31, ~~intermodal tank container leasing and metal products distribution industries)~~2007, ~~acts~~may ofaffect ~~terrorism,~~the ~~interest~~Company’s ~~rate~~businesses. ~~trends,~~As ~~cost~~a ~~of capital requirements~~result, ~~competition~~past ~~from~~financial ~~other~~results ~~companies,~~may ~~changes~~not inbe ~~operating~~a reliable ~~expenses,~~indicator ~~changes in prices and availability~~ of ~~key~~future ~~raw materials, governmental and public policy changes, changes in applicable laws, rules and regulations (including changes in tax laws)~~performance.

- 12 -

Results of Operations

~~1st~~2nd Quarter ~~2005~~ 2008 versus ~~1st~~2nd Quarter ~~2004~~2007

~~Performance~~Services ~~of the railcar leasing business~~revenue ~~improved in all major markets. Demand for existing railcar equipment improved, resulting in higher fleet utilization~~ and ~~improved lease rental rates. Demand for leased intermodal tank containers improved, resulting in fleet growth and higher utilization. First quarter revenues and~~ gross profit ~~from services were as follows~~:

	2005		2004		Increase (Decrease)
	(Dollars in Thousands)
Services revenue	$	185,115	$	183,779	$	1,336
Cost of services		107,620		117,705		(10,085	)
Gross profit from services	$	77,495	$	66,074	$	11,421

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

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


	2008			2007			Increase
	(Dollars in Thousands)
Services revenue	$	246,928		$	217,862		$	29,066
Cost of services		130,054			121,433			8,621

Gross profit from services	$	116,874		$	96,429		$	20,445
Gross profit %		47	%		44	%

Services revenue in the second quarter of 2008 increased $29.1 million from the second quarter of 2007 due to $20.4 million higher railcar leasing and service revenues (higher lease rates and equipment additions), $3.6 million higher intermodal tank container leasing revenues (equipment additions, favorable foreign currency rates and higher lease rates), $2.9 million higher revenue in the sulphur processing business (higher volume) and $2.2 million higher revenue in the contract rail switching business (higher volume).

Gross profit on services revenue in the second quarter of 2008 increased $20.4 million from the second quarter of 2007 primarily due to a $15.3 million increase for railcar leasing (higher lease rates and equipment additions more than offsetting higher maintenance expense), a $2.9 million increase for the intermodal tank container leasing business (equipment additions, favorable foreign currency rates and higher lease rates) and a $1.0 million increase for the sulphur processing business (higher volume).

Gains on disposals of lease fleet and other fixed assets, primarily on railcars and tank containers, totaled $8.8 million in the second quarter of 2008 compared to $3.9 million in the second quarter of 2007. Gains on disposals are treated as a reduction to the cost of services.

The gross margin on services revenue of 47% in the second quarter of 2008 increased from 44% in the second quarter of 2007 due to a higher margin in the railcar leasing business (higher lease rates and equipment additions more than offsetting higher maintenance expense) and a higher margin in the intermodal tank container leasing business (favorable foreign currency rates and higher lease rates).

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

- 13 -

~~Services~~Sales revenue ~~in the first quarter of 2005 increased over the first quarter of 2004 primarily due to a $6.2 million increase in railcar leasing~~ and ~~service~~gross ~~revenues~~profit: (improved utilization rates and equipment additions), a $1.8 million increase in intermodal tank container leasing revenues (improved utilization rates and equipment additions), and $1.0 million higher revenue in the contract rail switching business, which more than offset an $8.0 million decline in revenues from exiting low-margin transportation and terminaling activity related to sulphur processing.

~~Gross~~Demand ~~profit~~for onproducts ~~services revenue in the first quarter~~ of ~~2005 increased from~~ the ~~first quarter~~metals ofdistribution ~~2004~~business ~~primarily~~remained ~~due to an $8~~strong.2 ~~million~~Demand ~~improvement~~for innew ~~railcar~~railcars ~~leasing (improved utilization rates, lower external lease expense due to exercising purchase options on leveraged leases, and equipment additions), and a $2~~declined.3 ~~million increase in the tank container leasing business (improved utilization rates and equipment additions).~~

~~Average~~See ~~utilization~~Note of4 of the ~~Company’s~~Notes ~~railcar~~to ~~fleet was 98% for~~ the ~~first~~Condensed ~~quarter~~Consolidated ofFinancial ~~2005,~~Statements ~~compared~~ with ~~95%~~respect ~~for~~to the ~~first quarter of 2004~~$1.5 ~~Utilization~~million ~~rates~~closure costs of the ~~Company’s~~East ~~existing railcars are driven by long-term requirements of manufacturers and shippers of chemical products~~Chicago, ~~petroleum~~Indiana ~~products,~~railcar ~~food~~manufacturing ~~products,~~facility ~~and~~incurred ~~bulk plastics, and suitability of the Company’s fleet to meet such demand. The potential impact of short-term fluctuations~~ in ~~demand~~ ~~is tempered by~~ the ~~longer-term~~second ~~nature~~quarter of ~~the leases~~2008.

~~Sales~~Second ~~revenue increased primarily due to increased prices for products of the metals distribution business. First~~ quarter revenues and gross profit from sales were as follows:

	2005			2004			Increase (Decrease)
	2008				2007				Increase
	(Dollars in Thousands)
Net sales	$	215,592		$	164,387		$	51,205
Sales revenue	$	340,289			$	287,883			$	52,406
Cost of sales		~~179~~279,~~624~~240			~~133,009~~	233,947		~~46,615~~		45,293
Gross profit from sales	$	3561,~~968~~049		$	~~31,378~~$	53,936	$	~~4,590~~	$	7,113
Gross profit %		18	%			19	%

Sales revenue for the ~~first~~second quarter of ~~2005~~ 2008 increased $52.4 million from the ~~first~~second quarter of ~~2004~~2007 ~~primarily~~ due to $4233.6 4 million higher sales of metals distribution products (higher prices) and higher volume), $811.3 million ~~increased~~higher sales of ~~manufactured~~sulphur ~~railcars~~processing equipment (completion of a large project in the second quarter of 2008), $4.1 million higher sales of containment vessel heads (higher volume), $2.3 million higher sales of light rail transit products (higher volume) and ~~prices~~$1.7 million higher sales of gear drives (higher volume). These increases were partially offset by a $1.4 million decrease in sales of manufactured railcars (lower sales volume).

Gross profit on sales revenue in the ~~first~~second quarter of ~~2005~~2008 ~~improved~~increased $7.1 million from the ~~first~~ second quarter of ~~2004~~ 2007 primarily due to a $42.86 million increase for sulphur processing equipment (completion of a large project), a $2.3 million increase for metals distribution products (higher prices and higher volume partly offset by higher costs), a $1.2 million increase for containment vessel heads (higher volume) and a $1.0 million increase for light rail transit products (higher volume). These increases were partially offset by a $1.2 million decrease for manufactured railcars (lower sales volume and higher costs).

~~General~~The ~~and~~gross ~~administrative~~margin ~~expenses~~on sales revenue of 18% in the ~~first~~second quarter of ~~2005~~2008 ~~were~~decreased ~~$4.0~~from ~~million~~19% ~~higher~~in ~~than~~ the ~~first~~second quarter of ~~2004~~2007 primarily due to ~~higher~~lower ~~activity~~margins in the ~~railcar and~~ metals distribution ~~businesses~~business.

Interest expense in the first quarter of 2005 was $2.8 million higher than in the first quarter of 2004 due to the interest expense related to the new financing in 2004 more than offsetting lower interest expense from principal repayments of debt.

- 14 -

~~Provision~~General ~~for~~and ~~income~~administrative ~~taxes was $21.5 million in the first quarter of 2005 with an effective tax rate of 37.5%~~expense, ~~compared with~~interest ~~$19.3~~expense ~~million in the first quarter of 2004 with an effective tax rate of 40.4%. The decrease in tax rate was primarily due to changes to foreign tax liability~~ and ~~the~~income ~~benefits~~taxes: ~~of manufacturing deductions.~~

~~Financial~~General ~~Condition~~and administrative expenses in the second quarter of 2008 were $6.9 million higher than in the second quarter of 2007 primarily due to higher expenses for the railcar leasing and ~~Liquidity~~metals distribution businesses.

~~1st~~Interest ~~Quarter~~expense ~~2005~~in ~~versus~~the ~~1st~~second ~~Quarter~~quarter ~~2004~~of 2008 was $4.5 million lower than in the second quarter of 2007 primarily due to $2.2 million lower interest expense on third-party debt as a result of principal repayments and $2.3 million lower interest on advances from parent and affiliates as a result of lower interest rates more than offsetting higher balances.

~~Operating~~The ~~activities~~provision ~~provided~~for ~~$62.7~~income ~~million~~taxes of ~~net~~$47.2 ~~cash~~million in the ~~first~~second quarter of ~~2005~~2008, ~~compared~~ with ~~$32.9~~an ~~million~~effective intax ~~the~~rate ~~first quarter~~ of ~~2004~~41. ~~These funds~~7%, ~~along~~compared with ~~collection~~$35.5 ofmillion in ~~funds~~the ~~previously~~comparable ~~advanced~~2007 ~~to parent~~quarter, ~~redemption~~with ofan ~~short-term~~effective ~~investments,~~tax ~~and~~rate ~~liquidation~~ of ~~available-for-sale~~39.4%. ~~securities,~~The ~~were~~increase ~~used~~in tothe ~~finance~~effective ~~lease fleet~~tax ~~additions,~~rate ~~pay~~was ~~dividends~~the toresult ~~the~~of ~~Company’s~~a ~~stockholder,~~lower ~~and~~credit ~~service~~for ~~borrowed~~foreign ~~debt~~taxes ~~obligations~~paid.

ItSix isMonths ~~the~~2008 ~~Company’s~~versus ~~policy~~Six toMonths ~~pay~~2007 to its stockholder a quarterly dividend equal to 70% of net income. To the extent that the Company generates cash in excess of its operating needs, such funds, in excess of the amounts paid as dividends, are advanced to its parent and bear interest at commercial rates. Conversely, when the Company requires additional funds to support its operations, prior advances are repaid by its parent. No restrictions exist regarding the amount of dividends which may be paid or advances which may be made by the Company to its parent.

~~During~~Services ~~the~~revenue ~~first quarter of 2005, the Company spent $168.2 million for construction~~ and ~~purchase~~gross ofprofit: lease fleet and other fixed assets, compared with $77.1 million in the first quarter of 2004. The increase in capital expenditures is primarily due to a $76.0 million expenditure to exercise purchase options for railcars that were leased pursuant to prior sale-leaseback transactions. (Of this amount $42.4 million was paid on January 2, 2005 with the remaining $33.6 million payable in four installments ending December 31, 2005). The remaining increase in capital expenditures was largely due to increased demand from leasing customers for new railway tank cars. Since capital expenditures for railcars are generally incurred subsequent to receipt of firm customer lease orders, such expenditures are discretionary to the Company based on its desire to enter into those lease orders. Capital expenditures for intermodal tank containers are likewise discretionary in the intermodal tank container business.

~~Decreases~~The inequipment ~~advance to~~leasing ~~parent,~~businesses ~~short-term~~continued ~~investments and available-for-sale securities combined~~ to ~~provide~~perform ~~more~~well ~~than~~in ~~enough~~all ~~cash~~major ~~for first quarter 2005 investing activities~~markets. ~~Net~~Demand ~~cash~~for ~~used~~leased inrailcars ~~investing~~and ~~activities~~intermodal ~~was~~tank ~~$3.3~~containers ~~million~~remained instrong, ~~the~~resulting ~~first quarter of 2005 compared~~in ~~with~~fleet ~~$12.6~~growth, ~~million~~improved ~~provided~~lease inrental ~~the~~rates ~~first~~and ~~quarter~~continued ofhigh ~~2004~~fleet utilization.

~~During~~First ~~the~~six ~~first quarter~~months ofrevenues ~~2005,~~and ~~the~~gross ~~Company’s~~profit ~~financing~~from ~~activities~~services ~~included the use of $9.6 million for principal repayments on borrowed debt compared with $24.3 million in the first quarter of 2004. Cash dividends~~ were ~~$25.0~~as ~~million in the first quarter of~~follows: ~~2005 compared with $20.0 million in the first quarter of 2004. Net cash used in financing activities was $34.6 million compared with $44.3 million in 2004.~~

Management expects future cash to be provided from operating activities, long-term financings, available-for-sale securities, and collection of funds previously advanced to parent will be adequate to provide for the continued investment in the Company’s business and enable it to meet its debt service obligations. The Company plans to undertake long-term financing in 2005.


	2008			2007			Increase
	(Dollars in Thousands)
Services revenue	$	488,130		$	431,126		$	57,004
Cost of services		258,535			239,051			19,484

Gross profit from services	$	229,595		$	192,075		$	37,520
Gross profit %		47	%		45	%

Services revenue in the first six months of 2008 increased $57.0 million from the first six months of 2007 due to $39.9 million higher railcar leasing and service revenues (higher lease rates and equipment additions), $6.9 million higher intermodal tank container leasing revenues (equipment additions, favorable foreign currency rates and higher lease rates), $6.2 million higher revenue in the sulphur processing business (higher volume) and $3.5 million higher revenue in the contract rail switching business (higher volume).

Gross profit on services revenue in the first six months of 2008 increased $37.5 million from the first six months of 2007 primarily due to a $28.9 million increase for railcar leasing (higher lease rates and equipment additions more than offsetting higher maintenance expense), a $5.2 million increase for the intermodal tank container leasing business (equipment additions, favorable foreign currency rates and higher lease rates) and a $2.3 million increase for the sulphur processing business (higher volume).

- 15 -

Gains on disposals of lease fleet and other fixed assets, primarily on railcars and tank containers, totaled $13.2 million in the first six months of 2008 compared to $9.2 million in the first six months of 2007. Gains on disposals are treated as a reduction to the cost of services.

The gross margin on services revenue of 47% in the first six months of 2008 increased from 45% in the first six months of 2007 due to a higher margin in the railcar leasing business (higher lease rates and equipment additions more than offsetting higher maintenance expense) and a higher margin in the intermodal tank container leasing business (favorable foreign currency rates and higher lease rates).

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

Sales revenue and gross profit:

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

See Note 4 of the Notes to the Condensed Consolidated Financial Statements with respect to the $26.3 million closure costs of the East Chicago, Indiana railcar manufacturing facility incurred in the first six months of 2008.

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


	2008			2007			Increase (Decrease)
	(Dollars in Thousands)
Sales revenue	$	627,307		$	596,678		$	30,629
Cost of sales		512,350			476,264			36,086

Gross profit from sales	$	114,957		$	120,414		$	(5,457	)
Gross profit %		18	%		20	%

Sales revenue for the first six months of 2008 increased $30.6 million from the first six months of 2007 due to $54.4 million higher sales of metals distribution products (higher prices and higher volume including the volume impact of 2007 acquisitions), $5.0 million higher sales of containment vessel heads (higher volume), $4.1 million higher sales of gear drives (higher volume), $2.7 million higher sales of light rail transit products (higher volume) and $2.5 million higher sales of mobile railcar moving equipment (higher volume). These increases were partially offset by $27.7 million lower sales of sulphur processing equipment (completion of a large project in the first quarter of 2007) and a $11.4 million decrease in sales of manufactured railcars (lower sales volume).

- 16 -

Gross profit on sales revenue in the first six months of 2008 decreased $5.5 million from the first six months of 2007 primarily due to a $16.4 million decrease for sulphur processing equipment (completion of a large project in the first quarter of 2007). This decrease was partially offset by a $4.9 million increase for metals distribution products (higher prices and higher volume including the volume impact of 2007 acquisitions, partly offset by higher costs), a $1.9 million increase for mobile railcar moving equipment (higher volume), a $1.8 million increase for gear drives (higher volume), a $1.3 million increase for containment vessel heads (higher volume) and a $1.1 million increase for light rail transit products (higher volume).

The gross margin on sales revenue of 18% in the first six months of 2008 decreased from 20% in the first six months of 2007 primarily due to the completion of the large sulphur processing equipment project in the first quarter of 2007, but was also impacted by lower margins for metals distribution products.

General and administrative expense, interest expense and income taxes:

General and administrative expenses in the first six months of 2008 were $12.5 million higher than in the first six months of 2007 primarily due to higher expenses for the railcar leasing and metals distribution businesses, including the impact of March 2007 acquisitions.

Interest expense in the first six months of 2008 was $4.8 million lower than in the first six months of 2007 primarily due to $5.0 million lower interest expense on third-party debt as a result of principal repayments, partially offset by $0.2 million higher interest on advances from parent and affiliates as a result of higher balances more than offsetting lower interest rates.

The provision for income taxes of $78.0 million for the first six months of 2008, with an effective tax rate of 41.0%, compared with $78.7 million in the comparable 2007 period, with an effective tax rate of 40.9%.

Financial Condition and Liquidity

Six Months 2008 versus Six Months 2007

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

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

- 17 -

Cash flows from operating activities:

Operating activities provided $240.5 million of net cash in the first six months of 2008, compared with $206.9 million provided in the first six months of 2007. The net cash provided by operating activities was higher in 2008 primarily due to higher deferred income taxes and higher depreciation, more than offsetting net changes in operating assets and liabilities.

Cash flows from investing activities:

Net cash used in investing activities was $143.9 million in the first six months of 2008 compared with $280.4 million net cash used in the first six months of 2007. The change in net cash related to investing activities was primarily due to net sales of short-term investments in 2008 compared to 2007, purchases of businesses in 2007 and lower capital expenditures for the lease fleet in 2008 compared with 2007.

During the first six months of 2008, the Company invested $314.2 million in the construction and purchase of lease fleet assets, compared with $345.6 million in 2007. Since capital expenditures for railcars are generally incurred subsequent to receipt of firm customer lease orders, such expenditures are discretionary to the Company based on its desire to accept those lease orders. Capital expenditures for intermodal tank containers are likewise discretionary in the intermodal tank container business.

During the first six months of 2008, the Company invested $16.3 million in the construction and purchase of other fixed assets, compared with $17.2 million in the first six months of 2007.

During the first six months of 2008, the Company decreased its short-term investments by $171.7 million, compared to a net decrease in short-term investments of $77.3 million in the first six months of 2007. As of the end of June 2008, the Company had no short-term investments or available-for-sale securities.

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

Proceeds from disposals of lease fleet and other fixed assets were $21.3 million in the first six months of 2008 compared with $17.7 million in the first six months of 2007.

Cash flows from financing activities:

Net cash used in financing activities was $65.8 million in the first six months of 2008 compared with net cash provided by financing activities of $129.9 million in the first six months of 2007 primarily due to a $90.6 million increase in advances from parent and affiliates in the first six months of 2008 compared with a $372.9 million increase in the comparable period in 2007. Partially offsetting the change in advances from parent and affiliates were lower principal payments of debt and lower cash dividends. Principal payments of debt totaled $82.4 million in the first six months of 2008 compared with $167.0 million in the first six months of 2007. Cash dividends to Holdings were $74.0 million in the first six months of 2008 compared with $76.0 million in the first six months of 2007.

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

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New Accounting Pronouncements

In ~~November~~May ~~2004~~2008, the Financial Accounting Standards Board (“FASB”) issued ~~Statement~~two ofnew ~~Financial~~statements, ~~Accounting Standard (~~SFAS) No. ~~151~~ 162, “~~Inventory~~The ~~Costs~~Hierarchy –of AnGenerally ~~Amendment~~Accepted of Accounting ~~Research~~Principles” ~~Bulletin~~and SFAS No. 43 163, ~~Chapter~~“Accounting ~~4”. SFAS 151 clarifies that abnormal amounts of idle facility expense, freight, handling costs and spoilage should be expensed as incurred and not~~for ~~included~~Financial asGuarantee ~~overhead.~~Contracts ~~SFAS~~- ~~151~~An ~~also~~Interpretation ~~requires that the allocation~~ of ~~fixed~~FASB ~~production~~Statement ~~overhead to conversion costs be based on normal capacity of the production facilities~~No. ~~SFAS 151 must be applied prospectively beginning January 1, 2006~~ 60.” ~~The adoption~~Neither of ~~SFAS~~these ~~151~~statements is ~~not~~ expected to have a material ~~impact~~effect on the Company’s consolidated financial statements.

In ~~January~~March ~~2003~~2008, the FASB issued ~~Interpretation~~SFAS No. 46 161, “~~Consolidation~~Disclosures about Derivative Instruments and Hedging Activities - an amendment of ~~Variable~~FASB ~~Interest~~Statement No. 133” ~~Entities~~(“SFAS 161”). ~~This~~SFAS ~~Interpretion~~161 requires ~~that~~enhanced disclosures about (a) how and why derivatives are used, (b) how derivative instruments and related hedged items are accounted for and (c) how derivative instruments and related hedge items affect an ~~enterprise~~entity’s ~~consolidated~~ financial ~~statements~~position, ~~include~~financial ~~subsidiaries~~performance inand ~~which~~cash ~~the~~flows. ~~enterprise~~SFAS ~~has~~161 ais ~~controlling~~effective for financial ~~interest~~statements issued for fiscal years and interim periods beginning after November 15, 2008. The ~~Company~~adoption of ~~does~~this statement is not expected to have ~~any~~a ~~unconsolidated~~material ~~variable~~effect ~~interest~~on ~~entities~~the Company’s consolidated financial statements.

In December 2007, the FASB issued SFAS Statement No. 160, “Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51.” This statement establishes accounting and reporting standards for noncontrolling interests (formerly known as minority interests) in consolidated financial statements. This statement is effective in 2009 for the Company (early adoption is prohibited). This statement will revise the treatment of noncontrolling interests in consolidated balance sheets and consolidated statements of income. Noncontrolling interests will become a part of stockholder’s equity in the consolidated balance sheets and consolidated income statements will report income attributable to the Company and to noncontrolling interests separately. Any changes in ownership interests of a noncontrolling interest where the parent retains a controlling interest in the subsidiary are reported as equity transactions. When adopted, this statement is to be applied prospectively at the beginning of the year, except that the presentation and disclosure requirements are applied retrospectively for all periods presented. The Company is evaluating the impact of this statement.

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

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

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ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

ITEM 4.

CONTROLS AND PROCEDURES

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

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

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

- 1620 -

PART II. OTHER INFORMATION

ITEM 1. ~~Legal~~LEGAL ~~Proceedings~~ PROCEEDINGS

Reference is made to “Business - Environmental Matters” in Item 1 and Note 12 “Contingencies” of the Notes to Consolidated Financial Statements of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2004~~2007 for a description of certain environmental matters and Note 7 “Commitments and Contingencies” of the Notes to Condensed Consolidated Financial Statements in this Form 10-Q for the quarter ended June 30, 2008.

ITEM 51A. ~~Other~~RISK ~~Information~~ FACTORS

~~None~~There have been no material changes in the Company’s risk factors from those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007. In addition to the other information set forth in this report, you should carefully consider the risk factors contained in such annual report, as such risks or other risks not currently known to the Company or that the Company does not currently deem material could materially affect the Company’s business, financial condition or future results.

ITEM 6. ~~Exhibits~~ EXHIBITS


Exhibit 31.1		Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 31.2		Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 32.1		Certification pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Exhibit 32.2		Certification pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Instruments defining the rights of holders of long-term 17debt are not being filed herewith pursuant to the provisions of paragraph 4(v) of Item 601(b) of Regulation S-K. The Company agrees to furnish a copy of any such instrument to the Commission upon request.

- 21 -

SIGNATURES

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

	~~UNION TANK CAR COMPANY~~	UNION TANK CAR COMPANY
	~~REGISTRANT~~	REGISTRANT
Dated: May 13, 2005	/s/ Mark J. Garrette
Dated:	August 11, 2008	By:	/s/ Mark J. Garrette
	~~Mark J. Garrette~~		Mark J. Garrette
	~~Vice President~~		Vice President
	(principal financial officer
			(Principal Financial Officer and Principal Accounting Officer)
	and principal accounting officer)

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Filing Compare · UNION TANK CAR CO