GATX Corporation (NYSE:GATX) today reported 2017 second quarter net
income of $53.4 million or $1.35 per diluted share, compared to net
income of $61.2 million or $1.49 per diluted share in the second
quarter of 2016. Net income for the first six months of 2017 was
$110.9 million or $2.79 per diluted share, compared to $130.5
million or $3.15 per diluted share in the prior year period. The
2017 second quarter and year-to-date results include net gains of
approximately $1.1 million ($0.03 per diluted share) compared to
2016 second quarter and year-to date net gains of approximately
$0.2 million (no effect on per share diluted income) and $1.7
million ($0.04 per diluted share) respectively, associated with the
planned exit of the majority of Portfolio Management’s marine
investments. Details related to the exit of Portfolio
Management’s marine investments are provided in the attached
Supplemental Information.
Brian A. Kenney, president and chief executive
officer of GATX stated, “While North American railcar loadings and
railroad velocity have trended favorably over the last few
quarters, a recovery in the North American railcar leasing market
continues to be hampered by a significant oversupply of existing
railcars and a large railcar manufacturing backlog.”
“GATX’s fleet utilization decreased slightly to
98.8% in the quarter, although we continue to displace competitors
and protect high fleet utilization. The renewal lease rate
change of GATX’s Lease Price Index was a negative 21.4% in the
quarter, as absolute railcar lease rates have remained flat thus
far in 2017. Our commercial team has been successful in keeping
existing cars on lease, as evidenced by our renewal success rate of
75.1%.”
“Rail International is performing in line with
our original 2017 expectations. GATX Rail Europe’s fleet
utilization increased slightly to 95.7% in the quarter. At
American Steamship Company, 12 vessels are sailing under favorable
operating conditions. The Rolls-Royce and Partners Finance
affiliates continue their excellent performance, and 2017
investment volume is strong due to the solid demand for aircraft
spare engines.”
Mr. Kenney concluded, “Based on year-to-date
performance and our outlook for the remainder of the year, we
continue to expect our 2017 full-year earnings to be in the range
of $4.40 to $4.60 per diluted share.”
RAIL NORTH AMERICARail North
America reported segment profit of $74.9 million in the second
quarter of 2017, compared to $76.8 million in the second quarter of
2016. Year-to-date, Rail North America reported segment profit of
$167.9 million, compared to $185.5 million in the same period of
2016. Higher gains on asset dispositions in the second quarter of
2017 were more than offset by lower lease revenue and higher
maintenance expense, resulting in slightly lower segment
profit.
At June 30, 2017, Rail North America’s wholly
owned fleet comprised approximately 121,000 railcars, including
approximately 17,100 boxcars. The following fleet statistics and
performance discussion exclude the boxcar fleet.
Fleet utilization was 98.8% at the end of the
second quarter, compared to 99.1% at the end of the prior quarter
and 98.1% at the end of the second quarter of 2016. During the
second quarter of 2017, the GATX Lease Price Index (LPI), a
weighted-average lease renewal rate for a group of railcars
representative of Rail North America’s fleet, decreased 21.4% over
the weighted-average expiring lease rate. This compares to a 32.6%
decrease in the prior quarter and a 25.4% decrease in the second
quarter of 2016. The sequential improvement in LPI reflects some
unique lease renewals in the quarter and is not indicative of a
widespread improvement in absolute lease rates. The average
lease renewal term for cars included in the LPI during the second
quarter was 32 months, compared to 29 months in the prior quarter
and 34 months in the second quarter of 2016. Rail North America’s
investment volume during the second quarter was $127.6 million.
Additional fleet statistics, including
information about the boxcar fleet, and macroeconomic data related
to Rail North America’s business are provided on the last page of
this press release.
RAIL INTERNATIONALRail
International’s segment profit was $16.6 million in the second
quarter of 2017 compared to $13.0 million in the second quarter of
2016. Rail International reported segment profit of $30.0 million
year-to-date 2017, compared to $25.6 million for the same period of
2016. The improvement in segment profit was primarily driven by
lower maintenance expenses.
At June 30, 2017, GATX Rail Europe’s (GRE) fleet
consisted of approximately 23,000 cars and utilization was 95.7%,
compared to 95.0% at the end of the prior quarter and 94.8% at the
end of the second quarter of 2016. Additional fleet statistics for
GRE are provided on the last page of this press release.
AMERICAN STEAMSHIP
COMPANYAmerican Steamship Company (ASC) reported segment
profit of $6.5 million in the second quarter of 2017, compared to
$4.2 million in the second quarter of 2016. Segment profit
year-to-date 2017 was $6.3 million, compared to $5.1 million
year-to-date 2016. ASC carried 9.5 million net tons of cargo
through the second quarter of 2017, comparable to the prior year
period. The improvement in segment profit was primarily driven by
more efficient fleet performance.
PORTFOLIO MANAGEMENTPortfolio
Management reported segment profit of $19.8 million in the second
quarter of 2017, compared to $36.5 million in the second quarter of
2016. Segment profit year-to-date 2017 was $34.5 million, compared
to $55.1 million year-to-date 2016. The decline in segment profit
was predominantly driven by $21.7 million of higher residual
sharing fees earned in the second quarter of 2016. Second
quarter 2017 segment profit includes a net pre-tax gain of
approximately $1.8 million associated with the planned exit of the
majority of the marine investments compared with $0.3 million in
second quarter 2016.
COMPANY DESCRIPTIONGATX
Corporation (NYSE:GATX) strives to be recognized as the finest
railcar leasing company in the world by its customers, its
shareholders, its employees and the communities where it operates.
As the leading global railcar lessor, GATX has been providing
quality railcars and services to its customers for more than 118
years. GATX has been headquartered in Chicago, Illinois, since its
founding in 1898. For more information, please visit the Company’s
website at www.gatx.com.
TELECONFERENCE INFORMATION
GATX Corporation will host a teleconference to discuss 2017
second-quarter results. Call details are as follows:
Thursday, July 20th11:00
A.M. Eastern TimeDomestic Dial-In:
1-877-681-3378International Dial-In: 1-719-325-4761Replay:
1-888-203-1112 or 1-719-457-0820 /Access Code: 8027796
Call-in details, a copy of this press release and real-time
audio access are available at www.gatx.com. Please access the call
15 minutes prior to the start time. Following the call, a replay
will be available on the same site.
FORWARD-LOOKING STATEMENTSStatements in this
Earnings Release not based on historical facts are “forward-looking
statements” within the meaning of the Private Securities Litigation
Reform Act of 1995 and, accordingly, involve known and unknown
risks and uncertainties that are difficult to predict and could
cause our actual results, performance, or achievements to differ
materially from those discussed. These statements include
statements as to our future expectations, beliefs, plans,
strategies, objectives, events, conditions, financial performance,
prospects, or future events. In some cases, forward-looking
statements can be identified by the use of words such as “may,”
“could,” “expect,” “intend,” “plan,” “seek,” “anticipate,”
“believe,” “estimate,” “predict,” “potential,” “continue,”
“likely,” “will,” “would”, and similar words and phrases.
Forward-looking statements are necessarily based on estimates and
assumptions that, while considered reasonable by us and our
management, are inherently uncertain. Accordingly, you should
not place undue reliance on forward-looking statements, which speak
only as of the date they are made, and are not guarantees of future
performance. We do not undertake any obligation to publicly update
or revise these forward-looking statements.
The following factors, in addition to those
discussed in our other filings with the SEC, including our Form
10-K for the year ended December 31, 2016 and subsequent reports on
Form 10-Q, could cause actual results to differ materially from our
current expectations expressed in forward-looking statements:
| •
exposure to damages, fines, criminal and civil penalties, and
reputational harm arising from a negative outcome in litigation,
including claims arising from an accident involving our railcars •
inability to maintain our assets on lease at satisfactory rates due
to oversupply of railcars in the market or other changes in supply
and demand • weak economic conditions and other factors that may
decrease demand for our assets and services • decreased demand for
portions of our railcar fleet due to adverse changes in the price
of, or demand for, commodities that are shipped in our railcars •
higher costs associated with increased railcar assignments
following non-renewal of leases, customer defaults, and compliance
maintenance programs or other maintenance initiatives • events
having an adverse impact on assets, customers, or regions where we
have a concentrated investment exposure • financial and operational
risks associated with long-term railcar purchase commitments •
reduced opportunities to generate asset remarketing income •
operational and financial risks related to our affiliate
investments, including the Rolls-Royce & Partners Finance joint
ventures (collectively the “RRPF affiliates”) • fluctuations
in foreign exchange rates |
|
•
failure to successfully negotiate collective bargaining
agreements with the unions representing a substantial portion of
our employees • changes in railroad operations that could decrease
demand for railcars, either due to increased railroad efficiency or
decreased attractiveness of rail service relative to other modes •
the impact of regulatory requirements applicable to tank cars
carrying crude, ethanol, and other flammable liquids • asset
impairment charges we may be required to recognize • deterioration
of conditions in the capital markets, reductions in our credit
ratings, or increases in our financing costs • competitive factors
in our primary markets, including competitors with a significantly
lower cost of capital than GATX • risks related to international
operations and expansion into new geographic markets •
changes in, or failure to comply with, laws, rules, and
regulations • inability to obtain cost-effective insurance •
environmental remediation costs • inadequate allowances
to cover credit losses in our portfolio • inability to maintain and
secure our information technology infrastructure from cybersecurity
threats and related disruption of our business |
Investor, corporate, financial, historical financial, and news
release information may be found at www.gatx.com.
--Tabular Follows--
| GATX CORPORATION AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)(In millions, except per share
data) |
| |
| |
Three Months Ended June
30 |
|
Six Months Ended June
30 |
| |
|
| |
2017 |
|
2016 |
|
2017 |
|
2016 |
|
Revenues |
|
|
|
|
|
|
|
| Lease revenue |
$ |
274.1 |
|
|
$ |
281.2 |
|
|
$ |
546.8 |
|
|
$ |
565.7 |
|
| Marine operating
revenue |
55.1 |
|
|
57.3 |
|
|
72.1 |
|
|
77.6 |
|
| Other revenue |
19.2 |
|
|
20.4 |
|
|
45.6 |
|
|
50.0 |
|
| Total
Revenues |
348.4 |
|
|
358.9 |
|
|
664.5 |
|
|
693.3 |
|
|
Expenses |
|
|
|
|
|
|
|
| Maintenance
expense |
84.9 |
|
|
86.5 |
|
|
162.8 |
|
|
165.0 |
|
| Marine operating
expense |
38.0 |
|
|
37.4 |
|
|
50.9 |
|
|
49.7 |
|
| Depreciation
expense |
77.3 |
|
|
75.8 |
|
|
149.3 |
|
|
145.1 |
|
| Operating lease
expense |
15.2 |
|
|
18.5 |
|
|
31.0 |
|
|
35.3 |
|
| Other operating
expense |
7.8 |
|
|
14.8 |
|
|
17.4 |
|
|
23.6 |
|
| Selling, general and
administrative expense |
43.1 |
|
|
40.9 |
|
|
86.0 |
|
|
79.7 |
|
| Total
Expenses |
266.3 |
|
|
273.9 |
|
|
497.4 |
|
|
498.4 |
|
| Other Income
(Expense) |
|
|
|
|
|
|
|
| Net gain on asset
dispositions |
22.0 |
|
|
36.9 |
|
|
46.9 |
|
|
60.1 |
|
| Interest expense,
net |
(40.0 |
) |
|
(36.5 |
) |
|
(79.2 |
) |
|
(73.7 |
) |
| Other expense |
(1.1 |
) |
|
(3.9 |
) |
|
(2.4 |
) |
|
(7.2 |
) |
| Income before
Income Taxes and Share of Affiliates’ Earnings |
63.0 |
|
|
81.5 |
|
|
132.4 |
|
|
174.1 |
|
| Income
Taxes |
(19.3 |
) |
|
(26.7 |
) |
|
(39.9 |
) |
|
(57.5 |
) |
| Share of
Affiliates’ Earnings (net of tax) |
9.7 |
|
|
6.4 |
|
|
18.4 |
|
|
13.9 |
|
| Net
Income |
$ |
53.4 |
|
|
$ |
61.2 |
|
|
$ |
110.9 |
|
|
$ |
130.5 |
|
| |
|
|
|
|
|
|
|
| Share
Data |
|
|
|
|
|
|
|
| Basic earnings per
share |
$ |
1.37 |
|
|
$ |
1.51 |
|
|
$ |
2.83 |
|
|
$ |
3.18 |
|
| Average number of
common shares |
39.0 |
|
|
40.6 |
|
|
39.2 |
|
|
41.1 |
|
| Diluted earnings per
share |
$ |
1.35 |
|
|
$ |
1.49 |
|
|
$ |
2.79 |
|
|
$ |
3.15 |
|
| Average number of
common shares and common share equivalents |
39.5 |
|
|
41.1 |
|
|
39.7 |
|
|
41.5 |
|
| Dividends declared per
common share |
$ |
0.42 |
|
|
$ |
0.40 |
|
|
$ |
0.84 |
|
|
$ |
0.80 |
|
| GATX CORPORATION AND
SUBSIDIARIESCONSOLIDATED BALANCE SHEETS
(UNAUDITED)(In millions) |
| |
| |
|
June 30 |
|
December 31 |
| |
|
2017 |
|
2016 |
|
Assets |
|
|
|
|
| Cash and Cash
Equivalents |
|
$ |
284.3 |
|
|
$ |
307.5 |
|
| Restricted
Cash |
|
3.7 |
|
|
3.6 |
|
|
Receivables |
|
|
|
|
| Rent and other
receivables |
|
76.4 |
|
|
85.9 |
|
| Finance leases |
|
141.6 |
|
|
147.7 |
|
| Less: allowance for
losses |
|
(5.7 |
) |
|
(6.1 |
) |
| |
|
212.3 |
|
|
227.5 |
|
| |
|
|
|
|
| Operating
Assets and Facilities |
|
8,801.4 |
|
|
8,446.4 |
|
| Less: allowance for
depreciation |
|
(2,743.3 |
) |
|
(2,641.7 |
) |
| |
|
6,058.1 |
|
|
5,804.7 |
|
| |
|
|
|
|
| Investments in
Affiliated Companies |
|
407.8 |
|
|
387.0 |
|
|
Goodwill |
|
82.6 |
|
|
78.0 |
|
| Other
Assets |
|
223.3 |
|
|
297.1 |
|
| Total
Assets |
|
$ |
7,272.1 |
|
|
$ |
7,105.4 |
|
| Liabilities and
Shareholders’ Equity |
|
|
|
|
| Accounts
Payable and Accrued Expenses |
|
$ |
196.5 |
|
|
$ |
174.8 |
|
|
Debt |
|
|
|
|
| Commercial paper and
borrowings under bank credit facilities |
|
15.7 |
|
|
3.8 |
|
| Recourse |
|
4,261.2 |
|
|
4,253.2 |
|
| Capital lease
obligations |
|
13.1 |
|
|
14.9 |
|
| |
|
4,290.0 |
|
|
4,271.9 |
|
| |
|
|
|
|
| Deferred Income
Taxes |
|
1,134.1 |
|
|
1,089.4 |
|
| Other
Liabilities |
|
208.5 |
|
|
222.1 |
|
| Total
Liabilities |
|
5,829.1 |
|
|
5,758.2 |
|
| Total
Shareholders’ Equity |
|
1,443.0 |
|
|
1,347.2 |
|
| Total
Liabilities and Shareholders’ Equity |
|
$ |
7,272.1 |
|
|
$ |
7,105.4 |
|
| GATX CORPORATION AND
SUBSIDIARIESSEGMENT DATA (UNAUDITED)Three Months
Ended June 30, 2017(In millions) |
| |
| |
Rail N.A. |
|
Rail Int’l |
|
ASC |
|
PortfolioManagement |
|
Other |
|
GATXConsolidated |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
| Lease revenue |
$ |
225.7 |
|
|
$ |
46.2 |
|
|
$ |
1.0 |
|
|
$ |
1.2 |
|
|
$ |
— |
|
|
$ |
274.1 |
|
| Marine operating
revenue |
— |
|
|
— |
|
|
47.7 |
|
|
7.4 |
|
|
— |
|
|
55.1 |
|
| Other revenue |
17.3 |
|
|
1.6 |
|
|
— |
|
|
0.3 |
|
|
— |
|
|
19.2 |
|
| Total
Revenues |
243.0 |
|
|
47.8 |
|
|
48.7 |
|
|
8.9 |
|
|
— |
|
|
348.4 |
|
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
| Maintenance
expense |
68.5 |
|
|
9.7 |
|
|
6.7 |
|
|
— |
|
|
— |
|
|
84.9 |
|
| Marine operating
expense |
— |
|
|
— |
|
|
30.6 |
|
|
7.4 |
|
|
— |
|
|
38.0 |
|
| Depreciation
expense |
59.7 |
|
|
11.8 |
|
|
4.0 |
|
|
1.8 |
|
|
— |
|
|
77.3 |
|
| Operating lease
expense |
14.8 |
|
|
— |
|
|
0.4 |
|
|
— |
|
|
— |
|
|
15.2 |
|
| Other operating
expense |
6.3 |
|
|
1.2 |
|
|
— |
|
|
0.3 |
|
|
— |
|
|
7.8 |
|
| Total
Expenses |
149.3 |
|
|
22.7 |
|
|
41.7 |
|
|
9.5 |
|
|
— |
|
|
223.2 |
|
| Other Income
(Expense) |
|
|
|
|
|
|
|
|
|
|
|
| Net gain on asset
dispositions |
10.7 |
|
|
0.8 |
|
|
— |
|
|
10.5 |
|
|
— |
|
|
22.0 |
|
| Interest (expense)
income, net |
(28.5 |
) |
|
(8.1 |
) |
|
(1.3 |
) |
|
(2.4 |
) |
|
0.3 |
|
|
(40.0 |
) |
| Other (expense)
income |
(1.2 |
) |
|
(1.1 |
) |
|
0.8 |
|
|
— |
|
|
0.4 |
|
|
(1.1 |
) |
| Share of affiliates’
pretax income (loss) |
0.2 |
|
|
(0.1 |
) |
|
— |
|
|
12.3 |
|
|
— |
|
|
12.4 |
|
| Segment
Profit |
$ |
74.9 |
|
|
$ |
16.6 |
|
|
$ |
6.5 |
|
|
$ |
19.8 |
|
|
$ |
0.7 |
|
|
$ |
118.5 |
|
| Selling,
general and administrative expense |
43.1 |
|
| Income
taxes (includes $2.7 related to affiliates’ earnings) |
22.0 |
|
|
Net Income |
$ |
53.4 |
|
| Selected
Data: |
|
|
|
|
|
|
|
|
|
|
|
| Investment
Volume |
$ |
127.6 |
|
|
$ |
33.1 |
|
|
$ |
5.5 |
|
|
$ |
— |
|
|
$ |
0.1 |
|
|
$ |
166.3 |
|
| Net Gain on
Asset Dispositions |
|
|
|
|
|
|
|
|
|
|
|
| Asset
Remarketing Income: |
|
|
|
|
|
|
|
|
|
|
|
|
Disposition gains on owned assets |
$ |
10.9 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1.8 |
|
|
$ |
— |
|
|
$ |
12.7 |
|
| Residual
sharing income |
0.2 |
|
|
— |
|
|
— |
|
|
8.7 |
|
|
— |
|
|
8.9 |
|
| Non-remarketing
disposition gains (1) |
1.5 |
|
|
0.8 |
|
|
— |
|
|
— |
|
|
— |
|
|
2.3 |
|
| Asset impairments |
(1.9 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(1.9 |
) |
| Total Net Gain
on Asset Dispositions |
$ |
10.7 |
|
|
$ |
0.8 |
|
|
$ |
— |
|
|
$ |
10.5 |
|
|
$ |
— |
|
|
$ |
22.0 |
|
(1) Includes scrapping gains.
| GATX CORPORATION AND
SUBSIDIARIESSEGMENT DATA (UNAUDITED)Three Months
Ended June 30, 2016(In millions) |
| |
|
|
|
Rail N.A. |
|
Rail Int’l |
|
ASC |
|
PortfolioManagement |
|
Other |
|
GATXConsolidated |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
| Lease revenue |
|
$ |
233.4 |
|
|
$ |
45.3 |
|
|
$ |
1.1 |
|
|
$ |
1.4 |
|
|
$ |
— |
|
|
$ |
281.2 |
|
| Marine operating
revenue |
|
— |
|
|
— |
|
|
46.4 |
|
|
10.9 |
|
|
— |
|
|
57.3 |
|
| Other revenue |
|
18.4 |
|
|
1.6 |
|
|
— |
|
|
0.4 |
|
|
— |
|
|
20.4 |
|
| Total
Revenues |
|
251.8 |
|
|
46.9 |
|
|
47.5 |
|
|
12.7 |
|
|
— |
|
|
358.9 |
|
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
| Maintenance
expense |
|
67.6 |
|
|
12.9 |
|
|
6.0 |
|
|
— |
|
|
— |
|
|
86.5 |
|
| Marine operating
expense |
|
— |
|
|
— |
|
|
29.6 |
|
|
7.8 |
|
|
— |
|
|
37.4 |
|
| Depreciation
expense |
|
58.1 |
|
|
11.5 |
|
|
4.4 |
|
|
1.8 |
|
|
— |
|
|
75.8 |
|
| Operating lease
expense |
|
16.6 |
|
|
— |
|
|
2.0 |
|
|
— |
|
|
(0.1 |
) |
|
18.5 |
|
| Other operating
expense |
|
9.5 |
|
|
1.2 |
|
|
— |
|
|
4.1 |
|
|
— |
|
|
14.8 |
|
| Total
Expenses |
|
151.8 |
|
|
25.6 |
|
|
42.0 |
|
|
13.7 |
|
|
(0.1 |
) |
|
233.0 |
|
| Other Income
(Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
| Net gain on asset
dispositions |
|
4.7 |
|
|
0.3 |
|
|
— |
|
|
31.9 |
|
|
— |
|
|
36.9 |
|
| Interest (expense)
income, net |
|
(26.9 |
) |
|
(7.3 |
) |
|
(1.1 |
) |
|
(2.1 |
) |
|
0.9 |
|
|
(36.5 |
) |
| Other expense |
|
(1.1 |
) |
|
(1.3 |
) |
|
(0.2 |
) |
|
— |
|
|
(1.3 |
) |
|
(3.9 |
) |
| Share of affiliates’
pretax income |
|
0.1 |
|
|
— |
|
|
— |
|
|
7.7 |
|
|
— |
|
|
7.8 |
|
| Segment Profit
(Loss) |
|
$ |
76.8 |
|
|
$ |
13.0 |
|
|
$ |
4.2 |
|
|
$ |
36.5 |
|
|
$ |
(0.3 |
) |
|
$ |
130.2 |
|
| Selling,
general and administrative expense |
40.9 |
|
| Income
taxes (includes $1.4 related to affiliates’ earnings) |
28.1 |
|
|
Net Income |
$ |
61.2 |
|
| Selected
Data: |
|
|
|
|
|
|
|
|
|
|
|
|
| Investment
Volume |
|
$ |
145.4 |
|
|
$ |
30.4 |
|
|
$ |
4.4 |
|
|
$ |
— |
|
|
$ |
1.8 |
|
|
$ |
182.0 |
|
| Net
Gain on Asset Dispositions |
|
|
|
|
|
|
|
|
| Asset
Remarketing Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Disposition gains on owned assets |
|
$ |
3.0 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
2.1 |
|
|
$ |
— |
|
|
$ |
5.1 |
|
| Residual
sharing income |
|
0.1 |
|
|
— |
|
|
— |
|
|
31.6 |
|
|
— |
|
|
31.7 |
|
| Non-remarketing
disposition gains (1) |
|
1.6 |
|
|
0.3 |
|
|
— |
|
|
— |
|
|
— |
|
|
1.9 |
|
| Asset impairments |
|
— |
|
|
— |
|
|
— |
|
|
(1.8 |
) |
|
— |
|
|
(1.8 |
) |
| Total Net Gain
on Asset Dispositions |
|
$ |
4.7 |
|
|
$ |
0.3 |
|
|
$ |
— |
|
|
$ |
31.9 |
|
|
$ |
— |
|
|
$ |
36.9 |
|
(1) Includes scrapping gains.
| GATX CORPORATION AND
SUBSIDIARIESSEGMENT DATA (UNAUDITED)Six Months
Ended June 30, 2017(In millions) |
| |
|
|
|
Rail N.A. |
|
Rail Int’l |
|
ASC |
|
PortfolioManagement |
|
Other |
|
GATXConsolidated |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
| Lease revenue |
|
$ |
452.9 |
|
|
$ |
89.5 |
|
|
$ |
2.0 |
|
|
$ |
2.4 |
|
|
$ |
— |
|
|
$ |
546.8 |
|
| Marine operating
revenue |
|
— |
|
|
— |
|
|
54.1 |
|
|
18.0 |
|
|
— |
|
|
72.1 |
|
| Other revenue |
|
42.1 |
|
|
2.7 |
|
|
— |
|
|
0.8 |
|
|
— |
|
|
45.6 |
|
| Total
Revenues |
|
495.0 |
|
|
92.2 |
|
|
56.1 |
|
|
21.2 |
|
|
— |
|
|
664.5 |
|
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
| Maintenance
expense |
|
136.2 |
|
|
19.7 |
|
|
6.9 |
|
|
— |
|
|
— |
|
|
162.8 |
|
| Marine operating
expense |
|
— |
|
|
— |
|
|
35.9 |
|
|
15.0 |
|
|
— |
|
|
50.9 |
|
| Depreciation
expense |
|
118.7 |
|
|
23.0 |
|
|
4.1 |
|
|
3.5 |
|
|
— |
|
|
149.3 |
|
| Operating lease
expense |
|
29.8 |
|
|
— |
|
|
1.2 |
|
|
— |
|
|
— |
|
|
31.0 |
|
| Other operating
expense |
|
14.4 |
|
|
2.4 |
|
|
— |
|
|
0.6 |
|
|
— |
|
|
17.4 |
|
| Total
Expenses |
|
299.1 |
|
|
45.1 |
|
|
48.1 |
|
|
19.1 |
|
|
— |
|
|
411.4 |
|
| Other Income
(Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
| Net gain on asset
dispositions |
|
34.5 |
|
|
1.6 |
|
|
— |
|
|
10.8 |
|
|
— |
|
|
46.9 |
|
| Interest (expense)
income, net |
|
(59.6 |
) |
|
(16.0 |
) |
|
(2.5 |
) |
|
(4.6 |
) |
|
3.5 |
|
|
(79.2 |
) |
| Other expense
(income) |
|
(3.2 |
) |
|
(2.6 |
) |
|
0.8 |
|
|
2.3 |
|
|
0.3 |
|
|
(2.4 |
) |
| Share of affiliates’
pretax income (loss) |
|
0.3 |
|
|
(0.1 |
) |
|
— |
|
|
23.9 |
|
|
— |
|
|
24.1 |
|
| Segment
Profit |
|
$ |
167.9 |
|
|
$ |
30.0 |
|
|
$ |
6.3 |
|
|
$ |
34.5 |
|
|
$ |
3.8 |
|
|
$ |
242.5 |
|
| Selling,
general and administrative expense |
86.0 |
|
| Income
taxes (includes $5.7 related to affiliates’ earnings) |
45.6 |
|
|
Net Income |
$ |
110.9 |
|
| Selected
Data: |
|
|
|
|
|
|
|
|
|
|
|
|
| Investment
Volume |
|
$ |
230.4 |
|
|
$ |
51.8 |
|
|
$ |
12.8 |
|
|
$ |
— |
|
|
$ |
0.3 |
|
|
$ |
295.3 |
|
| Net
Gain on Asset Dispositions |
|
|
|
|
|
|
|
|
| Asset
Remarketing Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Disposition gains on owned assets |
|
$ |
32.0 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1.8 |
|
|
$ |
— |
|
|
$ |
33.8 |
|
| Residual
sharing income |
|
0.3 |
|
|
— |
|
|
— |
|
|
9.0 |
|
|
— |
|
|
9.3 |
|
| Non-remarketing
disposition gains (1) |
|
4.1 |
|
|
1.6 |
|
|
— |
|
|
— |
|
|
— |
|
|
5.7 |
|
| Asset impairments |
|
(1.9 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(1.9 |
) |
| Total Net Gain
on Asset Dispositions |
|
$ |
34.5 |
|
|
$ |
1.6 |
|
|
$ |
— |
|
|
$ |
10.8 |
|
|
$ |
— |
|
|
$ |
46.9 |
|
(1) Includes scrapping gains.
| GATX CORPORATION AND
SUBSIDIARIESSEGMENT DATA (UNAUDITED)Six Months
Ended June 30, 2016(In millions) |
| |
|
|
|
Rail N.A. |
|
Rail Int’l |
|
ASC |
|
PortfolioManagement |
|
Other |
|
GATXConsolidated |
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
| Lease revenue |
|
$ |
470.0 |
|
|
$ |
90.2 |
|
|
$ |
2.1 |
|
|
$ |
3.4 |
|
|
$ |
— |
|
|
$ |
565.7 |
|
| Marine operating
revenue |
|
— |
|
|
— |
|
|
50.5 |
|
|
27.1 |
|
|
— |
|
|
77.6 |
|
| Other revenue |
|
46.2 |
|
|
3.2 |
|
|
— |
|
|
0.6 |
|
|
— |
|
|
50.0 |
|
| Total
Revenues |
|
516.2 |
|
|
93.4 |
|
|
52.6 |
|
|
31.1 |
|
|
— |
|
|
693.3 |
|
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
| Maintenance
expense |
|
133.4 |
|
|
25.4 |
|
|
6.2 |
|
|
— |
|
|
— |
|
|
165.0 |
|
| Marine operating
expense |
|
— |
|
|
— |
|
|
32.5 |
|
|
17.2 |
|
|
— |
|
|
49.7 |
|
| Depreciation
expense |
|
114.6 |
|
|
22.6 |
|
|
4.4 |
|
|
3.5 |
|
|
— |
|
|
145.1 |
|
| Operating lease
expense |
|
33.4 |
|
|
— |
|
|
2.0 |
|
|
— |
|
|
(0.1 |
) |
|
35.3 |
|
| Other operating
expense |
|
16.4 |
|
|
2.6 |
|
|
— |
|
|
4.6 |
|
|
— |
|
|
23.6 |
|
| Total
Expenses |
|
297.8 |
|
|
50.6 |
|
|
45.1 |
|
|
25.3 |
|
|
(0.1 |
) |
|
418.7 |
|
| Other Income
(Expense) |
|
|
|
|
|
|
|
|
|
|
|
|
| Net gain on asset
dispositions |
|
23.3 |
|
|
1.0 |
|
|
— |
|
|
35.8 |
|
|
— |
|
|
60.1 |
|
| Interest (expense)
income, net |
|
(54.1 |
) |
|
(14.6 |
) |
|
(2.2 |
) |
|
(4.3 |
) |
|
1.5 |
|
|
(73.7 |
) |
| Other expense |
|
(2.4 |
) |
|
(3.5 |
) |
|
(0.2 |
) |
|
— |
|
|
(1.1 |
) |
|
(7.2 |
) |
| Share of affiliates’
pretax income (loss) |
|
0.3 |
|
|
(0.1 |
) |
|
— |
|
|
17.8 |
|
|
— |
|
|
18.0 |
|
| Segment
Profit |
|
$ |
185.5 |
|
|
$ |
25.6 |
|
|
$ |
5.1 |
|
|
$ |
55.1 |
|
|
$ |
0.5 |
|
|
$ |
271.8 |
|
| Selling,
general and administrative expense |
79.7 |
|
| Income
taxes (includes $4.1 related to affiliates’ earnings) |
61.6 |
|
|
Net Income |
$ |
130.5 |
|
| Selected
Data: |
|
|
|
|
|
|
|
|
|
|
|
|
| Investment
Volume |
|
$ |
258.3 |
|
|
$ |
52.4 |
|
|
$ |
9.1 |
|
|
$ |
— |
|
|
$ |
2.4 |
|
|
$ |
322.2 |
|
| Net
Gain on Asset Dispositions |
|
|
|
|
|
|
|
|
| Asset
Remarketing Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Disposition gains on owned assets |
|
$ |
20.6 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
4.5 |
|
|
$ |
— |
|
|
$ |
25.1 |
|
| Residual
sharing income |
|
0.4 |
|
|
— |
|
|
— |
|
|
33.1 |
|
|
— |
|
|
33.5 |
|
| Non-remarketing
disposition gains (1) |
|
2.3 |
|
|
1.0 |
|
|
— |
|
|
— |
|
|
— |
|
|
3.3 |
|
| Asset impairments |
|
— |
|
|
— |
|
|
— |
|
|
(1.8 |
) |
|
— |
|
|
(1.8 |
) |
| Total Net Gain
on Asset Dispositions |
|
$ |
23.3 |
|
|
$ |
1.0 |
|
|
$ |
— |
|
|
$ |
35.8 |
|
|
$ |
— |
|
|
$ |
60.1 |
|
(1) Includes scrapping gains.
| GATX CORPORATION AND
SUBSIDIARIESSUPPLEMENTAL INFORMATION
(UNAUDITED)(In millions, except per share
data) |
| |
| Impact of Tax
Adjustments and Other Items on Net Income* |
|
|
|
| |
Three Months Ended June 30 |
|
Six Months Ended June 30 |
| |
2017 |
|
2016 |
|
2017 |
|
2016 |
| Net income (GAAP) |
$ |
53.4 |
|
|
$ |
61.2 |
|
|
$ |
110.9 |
|
|
$ |
130.5 |
|
| |
|
|
|
|
|
|
|
| Adjustments
attributable to consolidated income, pretax: |
|
|
|
|
|
|
|
| Net gain
on wholly owned Portfolio Management marine investments |
(1.8 |
) |
|
(0.3 |
) |
|
(1.8 |
) |
|
(2.7 |
) |
| Total adjustments
attributable to consolidated income, pretax |
$ |
(1.8 |
) |
|
$ |
(0.3 |
) |
|
$ |
(1.8 |
) |
|
$ |
(2.7 |
) |
| Income taxes thereon,
based on applicable effective tax rate |
$ |
0.7 |
|
|
$ |
0.1 |
|
|
$ |
0.7 |
|
|
$ |
1.0 |
|
| |
|
|
|
|
|
|
|
| Net income, excluding
tax adjustments and other items (non-GAAP) |
$ |
52.3 |
|
|
$ |
61.0 |
|
|
$ |
109.8 |
|
|
$ |
128.8 |
|
| Impact of Tax
Adjustments and Other Items on Diluted Earnings per
Share* |
|
|
|
| |
Three Months Ended June 30 |
|
Six Months Ended June 30 |
| |
2017 |
|
2016 |
|
2017 |
|
2016 |
| Diluted earnings per
share (GAAP) |
$ |
1.35 |
|
|
$ |
1.49 |
|
|
$ |
2.79 |
|
|
$ |
3.15 |
|
| Diluted earnings per
share, excluding tax adjustments and other items (non-GAAP) |
$ |
1.32 |
|
|
$ |
1.49 |
|
|
$ |
2.76 |
|
|
$ |
3.11 |
|
(*) In addition to financial results reported in
accordance with GAAP, we provide certain non-GAAP financial
information. Specifically, we exclude the effects of certain tax
adjustments and other items for purposes of presenting net income
and diluted earnings per share because we believe these items are
not attributable to our business operations. Management utilizes
this information when analyzing financial performance because such
amounts reflect the underlying operating results that are within
management’s ability to influence. Accordingly, we believe
presenting this information provides investors and other users of
our financial statements with meaningful supplemental information
for purposes of analyzing year-to-year financial performance on a
comparable basis and assessing trends.
| GATX CORPORATION AND
SUBSIDIARIESSUPPLEMENTAL INFORMATION
(UNAUDITED)(In millions, except
leverage)(Continued) |
| |
| |
|
6/30/2016 |
|
9/30/2016 |
|
12/31/2016 |
|
3/31/2017 |
|
6/30/2017 |
|
Assets by Segment, as adjusted (non-GAAP)* |
|
|
|
|
|
|
|
|
| Rail North America |
|
$ |
5,235.7 |
|
|
$ |
5,243.0 |
|
|
$ |
5,216.5 |
|
|
$ |
5,269.4 |
|
|
$ |
5,304.3 |
|
| Rail International |
|
1,127.2 |
|
|
1,153.0 |
|
|
1,084.8 |
|
|
1,116.0 |
|
|
1,209.3 |
|
| ASC |
|
301.9 |
|
|
289.6 |
|
|
281.3 |
|
|
307.5 |
|
|
322.0 |
|
| Portfolio
Management |
|
608.3 |
|
|
595.0 |
|
|
589.9 |
|
|
597.4 |
|
|
573.2 |
|
| Other |
|
77.0 |
|
|
75.9 |
|
|
80.9 |
|
|
72.2 |
|
|
63.9 |
|
| Total Assets, excluding
cash, as adjusted (non-GAAP) |
|
$ |
7,350.1 |
|
|
$ |
7,356.5 |
|
|
$ |
7,253.4 |
|
|
$ |
7,362.5 |
|
|
$ |
7,472.7 |
|
| Debt, Net of
Unrestricted Cash* |
|
|
|
|
|
|
|
|
|
|
| Unrestricted cash |
|
$ |
(177.6 |
) |
|
$ |
(211.5 |
) |
|
$ |
(307.5 |
) |
|
$ |
(155.2 |
) |
|
$ |
(284.3 |
) |
| Commercial paper and
bank credit facilities |
|
28.5 |
|
|
5.1 |
|
|
3.8 |
|
|
3.0 |
|
|
15.7 |
|
| Recourse debt |
|
4,298.8 |
|
|
4,204.4 |
|
|
4,253.2 |
|
|
4,250.9 |
|
|
4,261.2 |
|
| Non-recourse debt |
|
2.3 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Capital lease
obligations |
|
16.6 |
|
|
15.1 |
|
|
14.9 |
|
|
13.5 |
|
|
13.1 |
|
| Total debt, net of
unrestricted cash (GAAP) |
|
4,168.6 |
|
|
4,013.1 |
|
|
3,964.4 |
|
|
4,112.2 |
|
|
4,005.7 |
|
| Off-balance sheet
recourse debt |
|
449.0 |
|
|
483.1 |
|
|
459.1 |
|
|
424.6 |
|
|
488.6 |
|
| Total debt, net of
unrestricted cash, as adjusted (non-GAAP) |
|
$ |
4,617.6 |
|
|
$ |
4,496.2 |
|
|
$ |
4,423.5 |
|
|
$ |
4,536.8 |
|
|
$ |
4,494.3 |
|
| Total Recourse Debt
(1) |
|
$ |
4,615.3 |
|
|
$ |
4,496.2 |
|
|
$ |
4,423.5 |
|
|
$ |
4,536.8 |
|
|
$ |
4,494.3 |
|
| Shareholders’
Equity |
|
$ |
1,308.5 |
|
|
$ |
1,371.5 |
|
|
$ |
1,347.2 |
|
|
$ |
1,385.2 |
|
|
$ |
1,443.0 |
|
| Recourse Leverage
(2) |
|
3.5 |
|
|
3.3 |
|
|
3.3 |
|
|
3.3 |
|
|
3.1 |
|
_________
(1) Includes on- and off-balance sheet recourse
debt; capital lease obligations; commercial paper and bank credit
facilities, net of unrestricted cash.(2) Calculated as total
recourse debt / shareholder’s equity.
|
Reconciliation of Total Assets, excluding cash (GAAP) to
Total Assets, excluding cash, as adjusted (non-GAAP) |
| Total Assets |
|
$ |
7,090.6 |
|
|
$ |
7,089.3 |
|
|
$ |
7,105.4 |
|
|
$ |
7,096.9 |
|
|
$ |
7,272.1 |
|
| Less:
cash |
|
(189.5 |
) |
|
(215.9 |
) |
|
(311.1 |
) |
|
(159.0 |
) |
|
(288.0 |
) |
| Total Assets, excluding
cash (GAAP) |
|
6,901.1 |
|
|
6,873.4 |
|
|
6,794.3 |
|
|
6,937.9 |
|
|
6,984.1 |
|
| Add off-balance sheet
assets: |
|
|
|
|
|
|
|
|
|
|
| Rail
North America |
|
443.3 |
|
|
478.9 |
|
|
456.5 |
|
|
423.9 |
|
|
488.1 |
|
| ASC |
|
5.7 |
|
|
4.2 |
|
|
2.6 |
|
|
0.7 |
|
|
0.5 |
|
| Total off-balance sheet
assets |
|
449.0 |
|
|
483.1 |
|
|
459.1 |
|
|
424.6 |
|
|
488.6 |
|
| Total Assets, excluding
cash, as adjusted (non-GAAP) |
|
$ |
7,350.1 |
|
|
$ |
7,356.5 |
|
|
$ |
7,253.4 |
|
|
$ |
7,362.5 |
|
|
$ |
7,472.7 |
|
(*) We disclose total on- and off-balance sheet
assets because certain operating assets are accounted for as
operating leases and are not recorded on the balance sheet. We
include these leased-in assets in our calculation of total assets
(as adjusted) because we believe it gives investors a more
comprehensive representation of the magnitude of the assets we
operate and that drive our financial performance. In addition, this
calculation of total assets (as adjusted) provides consistency with
other non-financial information we disclose. We also provide
information regarding our leverage ratios, which are expressed as a
ratio of debt (including off-balance sheet debt) to equity. The
off-balance sheet debt amount in this calculation is the equivalent
of the off-balance sheet asset amount. We believe reporting
this corresponding off-balance sheet debt amount provides investors
and other users of our financial statements with a more
comprehensive representation of our debt obligations, leverage, and
capital structure.
| GATX CORPORATION AND
SUBSIDIARIESSUPPLEMENTAL INFORMATION
(UNAUDITED)(Continued) |
| |
| |
6/30/2016 |
|
9/30/2016 |
|
12/31/2016 |
|
3/31/2017 |
|
6/30/2017 |
| Rail North
America Statistics |
|
|
|
|
|
|
|
|
|
| Lease Price
Index (LPI) (1) |
|
|
|
|
|
|
|
|
|
| Average renewal lease
rate change |
(25.4 |
)% |
|
(21.4 |
)% |
|
(36.2 |
)% |
|
(32.6 |
)% |
|
(21.4 |
)% |
| Average renewal term
(months) |
34 |
|
|
29 |
|
|
29 |
|
|
29 |
|
|
32 |
|
| Fleet
Rollforward (2) |
|
|
|
|
|
|
|
|
|
|
Beginning balance |
105,422 |
|
|
105,368 |
|
|
104,874 |
|
|
104,522 |
|
|
103,672 |
|
| Cars
added |
857 |
|
|
764 |
|
|
1,087 |
|
|
795 |
|
|
1,224 |
|
| Cars
scrapped |
(567 |
) |
|
(590 |
) |
|
(579 |
) |
|
(806 |
) |
|
(640 |
) |
| Cars
sold |
(344 |
) |
|
(668 |
) |
|
(860 |
) |
|
(839 |
) |
|
(249 |
) |
|
Ending balance |
105,368 |
|
|
104,874 |
|
|
104,522 |
|
|
103,672 |
|
|
104,007 |
|
| Utilization |
98.1 |
% |
|
99.0 |
% |
|
98.9 |
% |
|
99.1 |
% |
|
98.8 |
% |
| Average active
railcars |
103,824 |
|
|
103,479 |
|
|
103,702 |
|
|
102,976 |
|
|
102,760 |
|
| Boxcar
Fleet |
|
|
|
|
|
|
|
|
|
| Ending balance |
18,209 |
|
|
18,089 |
|
|
17,706 |
|
|
17,415 |
|
|
17,138 |
|
| Utilization |
97.1 |
% |
|
94.7 |
% |
|
93.8 |
% |
|
92.9 |
% |
|
90.2 |
% |
| Rail Europe
Statistics |
|
|
|
|
|
|
|
|
|
| Fleet
Rollforward |
|
|
|
|
|
|
|
|
|
|
Beginning balance |
22,859 |
|
|
23,088 |
|
|
22,966 |
|
|
23,122 |
|
|
23,131 |
|
| Cars
added |
323 |
|
|
78 |
|
|
287 |
|
|
207 |
|
|
288 |
|
| Cars
scrapped/sold |
(94 |
) |
|
(200 |
) |
|
(131 |
) |
|
(198 |
) |
|
(239 |
) |
|
Ending balance |
23,088 |
|
|
22,966 |
|
|
23,122 |
|
|
23,131 |
|
|
23,180 |
|
| Utilization |
94.8 |
% |
|
95.0 |
% |
|
95.6 |
% |
|
95.0 |
% |
|
95.7 |
% |
| Average active
railcars |
21,747 |
|
|
21,830 |
|
|
22,002 |
|
|
22,012 |
|
|
22,024 |
|
| Rail North
America Industry Statistics |
|
|
|
|
|
|
|
|
|
| Manufacturing Capacity
Utilization Index (3) |
75.4 |
% |
|
75.3 |
% |
|
76.0 |
% |
|
75.8 |
% |
|
76.6 |
% |
| Year-over-year Change
in U.S. Carloadings (excl. intermodal) (4) |
(12.3 |
)% |
|
(10.5 |
)% |
|
(8.2 |
)% |
|
5.7 |
% |
|
6.4 |
% |
| Year-over-year Change
in U.S. Carloadings (chemical) (4) |
2.4 |
% |
|
1.7 |
% |
|
1.5 |
% |
|
(1.2 |
)% |
|
0.1 |
% |
| Year-over-year Change
in U.S. Carloadings (petroleum) (4) |
(21.7 |
)% |
|
(22.2 |
)% |
|
(21.4 |
)% |
|
(13.2 |
)% |
|
(14.1 |
)% |
| Production Backlog at
Railcar Manufacturers (5) |
89,155 |
|
|
77,640 |
|
|
66,681 |
|
|
60,471 |
|
|
n/a (6) |
| American
Steamship Company Statistics |
|
|
|
|
|
|
|
|
|
| Total Net Tons Carried
(millions) |
8.9 |
|
|
8.7 |
|
|
7.2 |
|
|
1.0 |
|
|
8.5 |
|
_________
(1) GATX’s Lease Price Index (LPI) is an
internally-generated business indicator that measures lease rate
pricing on renewals for our North American railcar fleet, excluding
boxcars. The index is calculated using the weighted average lease
rate for a group of railcar types that GATX believes best
represents its overall North American fleet, excluding boxcars. The
average renewal lease rate change is reported as the percentage
change between the average renewal lease rate and the average
expiring lease rate, weighted by fleet composition. The average
renewal lease term is reported in months and reflects the average
renewal lease term of railcar types in the LPI, weighted by fleet
composition.(2) Excludes boxcar fleet.(3) As reported and revised
by the Federal Reserve.(4) As reported by the Association of
American Railroads (AAR).(5) As reported by the Railway Supply
Institute (RSI).(6) Not available, not published as of the date of
this release.
FOR FURTHER INFORMATION CONTACT:
GATX Corporation
Jennifer McManus
Director, Investor Relations
GATX Corporation
312-621-6409
jennifer.mcmanus@gatx.com
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