GATX Corporation (NYSE:GATX) today reported 2017 third quarter net
income of $49.0 million or $1.25 per diluted share, compared to net
income of $95.7 million or $2.36 per diluted share in the third
quarter of 2016. Year-to-date 2017 net income was $159.9 million or
$4.04 per diluted share, compared to $226.2 million or $5.49 per
diluted share in the prior year period.
2017 year-to-date results include a net
after-tax gain from the exit of Portfolio Management’s marine
investments and other items of $1.1 million ($0.03 per diluted
share) recorded in the second quarter of 2017. The 2016 third
quarter and year-to-date results include net after-tax gains of
$34.6 million ($0.86 per diluted share) and $36.3 million ($0.88
per diluted share), respectively, related to the exit of marine
investments and other items. Details related to Tax Adjustments and
Other Items are provided in the attached Supplemental
Information.
Brian A. Kenney, president and chief executive
officer of GATX stated, “Challenging conditions continue in the
North American railcar leasing market due to the oversupply of
existing railcars and a large railcar manufacturing backlog. In the
third quarter, the renewal lease rate change of GATX’s Lease Price
Index was a negative 27.0%, the average renewal term was 35 months,
and our renewal success rate was 74.9%. GATX’s fleet utilization
decreased slightly to 98.5% in the quarter.”
“Utilization at GATX Rail Europe remains stable
at 95.6%. At American Steamship Company, 12 vessels continue to
sail under favorable operating conditions on the Great Lakes. The
Rolls-Royce and Partners Finance affiliates are performing well as
originally expected.”
Mr. Kenney concluded, “Our year-to-date fleet
performance in North American Rail has exceeded our expectations
due to the excellent performance of our commercial team in keeping
cars on lease despite the difficult market. GATX International and
American Steamship have also performed ahead of expectations due to
stronger short term demand than anticipated. Therefore, we expect
our 2017 full-year earnings to be at the high end or slightly above
our range of $4.40 to $4.60 per diluted share. This guidance
excludes any impact from Tax Adjustments and Other Items.”
RAIL NORTH AMERICARail North
America reported segment profit of $70.2 million in the third
quarter of 2017, compared to $87.9 million in the third quarter of
2016. Lower segment profit was a result of lower revenues and
higher maintenance expenses. Year to date, Rail North America
reported segment profit of $238.1 million, compared to $273.4
million in the same period of 2016. Lower revenues and higher
maintenance expenses were partially offset by higher gains on asset
dispositions.
At September 30, 2017, Rail North America’s
wholly owned fleet comprised approximately 120,000 railcars,
including approximately 16,600 boxcars. The following fleet
statistics and performance discussion exclude the boxcar fleet.
Fleet utilization was 98.5% at the end of the
third quarter, compared to 98.8% at the end of the prior quarter
and 99.0% at the end of the third quarter of 2016. During the third
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, was a negative 27.0%.
This compares to an LPI of negative 21.4% in the prior quarter and
the third quarter of 2016. The average lease renewal term for
railcars included in the LPI during the third quarter was 35
months, compared to 32 months in the prior quarter and 29 months in
the third quarter of 2016. Rail North America’s investment volume
during the third quarter was $103.3 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 $20.1 million in the third
quarter of 2017, compared to $23.3 million in the third quarter of
2016. Higher revenues were more than offset by lower insurance
proceeds in the quarter. Rail International reported segment profit
of $50.1 million year-to-date 2017, compared to $48.9 million for
the same period of 2016. Higher segment profit was a result of
higher revenues and lower maintenance costs.
At September 30, 2017, GATX Rail Europe’s (GRE)
fleet consisted of approximately 23,000 railcars and utilization
was 95.6%, compared to 95.7% at the end of the prior quarter and
95.0% at the end of the third 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 $12.1 million in the third quarter of 2017, compared to
$7.8 million in the third quarter of 2016. Segment profit
year-to-date 2017 was $18.4 million, compared to $12.9 million
year-to-date 2016. ASC carried 9.8 million net tons of cargo in the
third quarter of 2017, compared to 8.7 million net tons in the
prior year period. Higher segment profit was a result of more
tonnage transported on the Great Lakes, partially offset by higher
operating costs due to more vessels in operation.
PORTFOLIO MANAGEMENTPortfolio
Management reported segment profit of $12.8 million in the third
quarter of 2017, compared to a segment profit of $64.1 million in
the third quarter of 2016. Segment profit year-to-date 2017 was
$47.3 million, compared to $119.2 million year-to-date 2016. The
decrease in third quarter and year-to-date segment profit was
predominantly driven by a residual sharing fee settlement of $49.1
million received in 2016.
2017 year-to-date 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 $3.4 million for the prior year period.
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 largest 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 INFORMATIONGATX Corporation will
host a teleconference to discuss 2017 third-quarter results. Call
details are as follows:
Thursday, October 19th 11:00
A.M. Eastern TimeDomestic Dial-In:
1-888-554-1432International Dial-In: 1-719-325-2295Replay:
1-888-203-1112 or 1-719-457-0820 /Access Code: 9274702
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 STATEMENTS
Statements 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 • 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 |
FOR FURTHER INFORMATION CONTACT:GATX
CorporationJennifer McManusDirector, Investor RelationsGATX
Corporation312-621-6409jennifer.mcmanus@gatx.com
Investor, corporate, financial, historical
financial, and news release information may be found at
www.gatx.com.
(10/19/17)
--Tabular Follows--
GATX CORPORATION AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)(In millions, except per share
data) |
|
|
Three Months Ended September
30 |
|
Nine Months Ended September
30 |
|
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Revenues |
|
|
|
|
|
|
|
Lease revenue |
$ |
276.6 |
|
|
$ |
281.8 |
|
|
$ |
823.4 |
|
|
$ |
847.5 |
|
Marine operating
revenue |
62.9 |
|
|
62.1 |
|
|
135.0 |
|
|
139.7 |
|
Other revenue |
20.1 |
|
|
19.0 |
|
|
65.7 |
|
|
69.0 |
|
Total
Revenues |
359.6 |
|
|
362.9 |
|
|
1,024.1 |
|
|
1,056.2 |
|
Expenses |
|
|
|
|
|
|
|
Maintenance
expense |
84.9 |
|
|
79.6 |
|
|
247.7 |
|
|
244.6 |
|
Marine operating
expense |
38.9 |
|
|
39.2 |
|
|
89.8 |
|
|
88.9 |
|
Depreciation
expense |
78.6 |
|
|
75.9 |
|
|
227.9 |
|
|
221.0 |
|
Operating lease
expense |
15.8 |
|
|
19.2 |
|
|
46.8 |
|
|
54.5 |
|
Other operating
expense |
8.5 |
|
|
10.1 |
|
|
25.9 |
|
|
33.7 |
|
Selling, general and
administrative expense |
42.8 |
|
|
48.1 |
|
|
128.8 |
|
|
127.8 |
|
Total
Expenses |
269.5 |
|
|
272.1 |
|
|
766.9 |
|
|
770.5 |
|
Other Income
(Expense) |
|
|
|
|
|
|
|
Net gain on asset
dispositions |
9.4 |
|
|
62.7 |
|
|
56.3 |
|
|
122.8 |
|
Interest expense,
net |
(40.2 |
) |
|
(36.2 |
) |
|
(119.4 |
) |
|
(109.9 |
) |
Other (expense)
income |
(2.1 |
) |
|
4.3 |
|
|
(4.5 |
) |
|
(2.9 |
) |
Income before
Income Taxes and Share of Affiliates’ Earnings |
57.2 |
|
|
121.6 |
|
|
189.6 |
|
|
295.7 |
|
Income taxes |
(20.4 |
) |
|
(41.1 |
) |
|
(60.3 |
) |
|
(98.6 |
) |
Share of affiliates’
earnings, net of taxes |
12.2 |
|
|
15.2 |
|
|
30.6 |
|
|
29.1 |
|
Net
Income |
$ |
49.0 |
|
|
$ |
95.7 |
|
|
$ |
159.9 |
|
|
$ |
226.2 |
|
|
|
|
|
|
|
|
|
Share
Data |
|
|
|
|
|
|
|
Basic earnings per
share |
$ |
1.27 |
|
|
$ |
2.39 |
|
|
$ |
4.10 |
|
|
$ |
5.55 |
|
Average number of
common shares |
38.6 |
|
|
40.1 |
|
|
39.0 |
|
|
40.7 |
|
Diluted earnings per
share |
$ |
1.25 |
|
|
$ |
2.36 |
|
|
$ |
4.04 |
|
|
$ |
5.49 |
|
Average number of
common shares and common share equivalents |
39.2 |
|
|
40.6 |
|
|
39.6 |
|
|
41.2 |
|
Dividends declared per
common share |
$ |
0.42 |
|
|
$ |
0.40 |
|
|
$ |
1.26 |
|
|
$ |
1.20 |
|
GATX CORPORATION AND
SUBSIDIARIESCONSOLIDATED BALANCE SHEETS
(UNAUDITED)(In millions) |
|
|
|
September 30 |
|
December 31 |
|
|
2017 |
|
2016 |
Assets |
|
|
|
|
Cash and Cash
Equivalents |
|
$ |
199.2 |
|
|
$ |
307.5 |
|
Restricted
Cash |
|
3.7 |
|
|
3.6 |
|
Receivables |
|
|
|
|
Rent and other
receivables |
|
83.2 |
|
|
85.9 |
|
Finance leases |
|
139.1 |
|
|
147.7 |
|
Less: allowance for
losses |
|
(6.5 |
) |
|
(6.1 |
) |
|
|
215.8 |
|
|
227.5 |
|
|
|
|
|
|
Operating
Assets and Facilities |
|
8,915.9 |
|
|
8,446.4 |
|
Less: allowance for
depreciation |
|
(2,814.6 |
) |
|
(2,641.7 |
) |
|
|
6,101.3 |
|
|
5,804.7 |
|
|
|
|
|
|
Investments in
Affiliated Companies |
|
449.3 |
|
|
387.0 |
|
Goodwill |
|
84.6 |
|
|
78.0 |
|
Other
Assets |
|
208.0 |
|
|
297.1 |
|
Total
Assets |
|
$ |
7,261.9 |
|
|
$ |
7,105.4 |
|
|
|
|
|
|
Liabilities and
Shareholders’ Equity |
|
|
|
|
Accounts
Payable and Accrued Expenses |
|
$ |
133.8 |
|
|
$ |
174.8 |
|
Debt |
|
|
|
|
Commercial paper and
borrowings under bank credit facilities |
|
15.7 |
|
|
3.8 |
|
Recourse |
|
4,266.7 |
|
|
4,253.2 |
|
Capital lease
obligations |
|
12.8 |
|
|
14.9 |
|
|
|
4,295.2 |
|
|
4,271.9 |
|
|
|
|
|
|
Deferred Income
Taxes |
|
1,157.7 |
|
|
1,089.4 |
|
Other
Liabilities |
|
205.0 |
|
|
222.1 |
|
Total
Liabilities |
|
5,791.7 |
|
|
5,758.2 |
|
Total
Shareholders’ Equity |
|
1,470.2 |
|
|
1,347.2 |
|
Total
Liabilities and Shareholders’ Equity |
|
$ |
7,261.9 |
|
|
$ |
7,105.4 |
|
GATX CORPORATION AND
SUBSIDIARIESSEGMENT DATA
(UNAUDITED)Three Months Ended September 30,
2017(In millions) |
|
|
Rail N.A. |
|
Rail Int’l |
|
ASC |
|
PortfolioManagement |
|
Other |
|
GATXConsolidated |
Revenues |
|
|
|
|
|
|
|
|
|
|
|
Lease revenue |
$ |
224.5 |
|
|
$ |
50.3 |
|
|
$ |
1.1 |
|
|
$ |
0.7 |
|
|
$ |
— |
|
|
$ |
276.6 |
|
Marine operating
revenue |
— |
|
|
— |
|
|
59.1 |
|
|
3.8 |
|
|
— |
|
|
62.9 |
|
Other revenue |
17.9 |
|
|
2.0 |
|
|
— |
|
|
0.2 |
|
|
— |
|
|
20.1 |
|
Total Revenues |
242.4 |
|
|
52.3 |
|
|
60.2 |
|
|
4.7 |
|
|
— |
|
|
359.6 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
Maintenance
expense |
66.1 |
|
|
11.1 |
|
|
7.7 |
|
|
— |
|
|
— |
|
|
84.9 |
|
Marine operating
expense |
— |
|
|
— |
|
|
34.7 |
|
|
4.2 |
|
|
— |
|
|
38.9 |
|
Depreciation
expense |
60.1 |
|
|
12.8 |
|
|
4.0 |
|
|
1.7 |
|
|
— |
|
|
78.6 |
|
Operating lease
expense |
15.5 |
|
|
— |
|
|
0.3 |
|
|
— |
|
|
— |
|
|
15.8 |
|
Other operating
expense |
7.3 |
|
|
1.1 |
|
|
— |
|
|
0.1 |
|
|
— |
|
|
8.5 |
|
Total Expenses |
149.0 |
|
|
25.0 |
|
|
46.7 |
|
|
6.0 |
|
|
— |
|
|
226.7 |
|
Other Income
(Expense) |
|
|
|
|
|
|
|
|
|
|
|
Net gain on asset
dispositions |
8.1 |
|
|
1.0 |
|
|
— |
|
|
0.3 |
|
|
— |
|
|
9.4 |
|
Interest (expense)
income, net |
(30.5 |
) |
|
(8.5 |
) |
|
(1.4 |
) |
|
(2.2 |
) |
|
2.4 |
|
|
(40.2 |
) |
Other (expense)
income |
(0.9 |
) |
|
0.3 |
|
|
— |
|
|
— |
|
|
(1.5 |
) |
|
(2.1 |
) |
Share of affiliates’
pretax income |
0.1 |
|
|
— |
|
|
— |
|
|
16.0 |
|
|
— |
|
|
16.1 |
|
Segment profit |
$ |
70.2 |
|
|
$ |
20.1 |
|
|
$ |
12.1 |
|
|
$ |
12.8 |
|
|
$ |
0.9 |
|
|
$ |
116.1 |
|
Selling,
general and administrative expense |
42.8 |
|
Income
taxes (includes $3.9 related to affiliates’ earnings) |
24.3 |
|
Net income |
$ |
49.0 |
|
Selected
Data: |
|
|
|
|
|
|
|
|
|
|
|
Investment volume |
$ |
103.3 |
|
|
$ |
22.9 |
|
|
$ |
0.8 |
|
|
$ |
36.6 |
|
|
$ |
0.1 |
|
|
$ |
163.7 |
|
Net Gain on
Asset Dispositions |
|
|
|
|
|
|
|
|
|
|
|
Asset
Remarketing Income: |
|
|
|
|
|
|
|
|
|
|
|
Disposition gains on owned assets |
$ |
7.5 |
|
|
$ |
0.1 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
7.6 |
|
Residual
sharing income |
0.2 |
|
|
— |
|
|
— |
|
|
0.3 |
|
|
— |
|
|
0.5 |
|
Non-remarketing
disposition gains (1) |
0.4 |
|
|
0.9 |
|
|
— |
|
|
— |
|
|
— |
|
|
1.3 |
|
|
$ |
8.1 |
|
|
$ |
1.0 |
|
|
$ |
— |
|
|
$ |
0.3 |
|
|
$ |
— |
|
|
$ |
9.4 |
|
(1) Includes scrapping gains.
GATX CORPORATION AND
SUBSIDIARIESSEGMENT DATA
(UNAUDITED)Three Months Ended September 30,
2016(In millions) |
|
|
Rail N.A. |
|
Rail Int’l |
|
ASC |
|
PortfolioManagement |
|
Other |
|
GATXConsolidated |
Revenues |
|
|
|
|
|
|
|
|
|
|
|
Lease revenue |
$ |
233.0 |
|
|
$ |
46.6 |
|
|
$ |
1.0 |
|
|
$ |
1.2 |
|
|
$ |
— |
|
|
$ |
281.8 |
|
Marine operating
revenue |
— |
|
|
— |
|
|
51.8 |
|
|
10.3 |
|
|
— |
|
|
62.1 |
|
Other revenue |
17.3 |
|
|
1.6 |
|
|
— |
|
|
0.1 |
|
|
— |
|
|
19.0 |
|
Total Revenues |
250.3 |
|
|
48.2 |
|
|
52.8 |
|
|
11.6 |
|
|
— |
|
|
362.9 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
Maintenance
expense |
62.8 |
|
|
10.7 |
|
|
6.1 |
|
|
— |
|
|
— |
|
|
79.6 |
|
Marine operating
expense |
— |
|
|
— |
|
|
31.5 |
|
|
7.7 |
|
|
— |
|
|
39.2 |
|
Depreciation
expense |
58.4 |
|
|
11.6 |
|
|
4.2 |
|
|
1.7 |
|
|
— |
|
|
75.9 |
|
Operating lease
expense |
17.2 |
|
|
— |
|
|
2.0 |
|
|
— |
|
|
— |
|
|
19.2 |
|
Other operating
expense |
8.6 |
|
|
1.2 |
|
|
— |
|
|
0.3 |
|
|
— |
|
|
10.1 |
|
Total Expenses |
147.0 |
|
|
23.5 |
|
|
43.8 |
|
|
9.7 |
|
|
— |
|
|
224.0 |
|
Other Income
(Expense) |
|
|
|
|
|
|
|
|
|
|
|
Net gain on asset
dispositions |
13.1 |
|
|
0.5 |
|
|
— |
|
|
49.1 |
|
|
— |
|
|
62.7 |
|
Interest (expense)
income, net |
(27.1 |
) |
|
(7.3 |
) |
|
(1.1 |
) |
|
(2.1 |
) |
|
1.4 |
|
|
(36.2 |
) |
Other (expense)
income |
(1.4 |
) |
|
5.5 |
|
|
(0.1 |
) |
|
— |
|
|
0.3 |
|
|
4.3 |
|
Share of affiliates’
pretax (loss) income |
— |
|
|
(0.1 |
) |
|
— |
|
|
15.2 |
|
|
— |
|
|
15.1 |
|
Segment profit |
$ |
87.9 |
|
|
$ |
23.3 |
|
|
$ |
7.8 |
|
|
$ |
64.1 |
|
|
$ |
1.7 |
|
|
$ |
184.8 |
|
Selling,
general and administrative expense |
48.1 |
|
Income
taxes (includes $0.1 tax benefit related to affiliates’
earnings) |
41.0 |
|
Net income |
$ |
95.7 |
|
Selected
Data: |
|
|
|
|
|
|
|
|
|
|
|
Investment volume |
$ |
108.4 |
|
|
$ |
10.8 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1.2 |
|
|
$ |
120.4 |
|
Net
Gain on Asset Dispositions |
|
|
|
|
|
|
|
|
Asset
Remarketing Income: |
|
|
|
|
|
|
|
|
|
|
|
Disposition gains on owned assets |
$ |
11.9 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
(0.3 |
) |
|
$ |
— |
|
|
$ |
11.6 |
|
Residual
sharing income |
0.3 |
|
|
— |
|
|
— |
|
|
49.4 |
|
|
— |
|
|
49.7 |
|
Non-remarketing
disposition gains (1) |
0.9 |
|
|
0.5 |
|
|
— |
|
|
— |
|
|
— |
|
|
1.4 |
|
|
$ |
13.1 |
|
|
$ |
0.5 |
|
|
$ |
— |
|
|
$ |
49.1 |
|
|
$ |
— |
|
|
$ |
62.7 |
|
(1) Includes scrapping gains.
GATX CORPORATION AND
SUBSIDIARIESSEGMENT DATA
(UNAUDITED)Nine Months Ended September 30,
2017(In millions) |
|
|
Rail N.A. |
|
Rail Int’l |
|
ASC |
|
PortfolioManagement |
|
Other |
|
GATXConsolidated |
Revenues |
|
|
|
|
|
|
|
|
|
|
|
Lease revenue |
$ |
677.4 |
|
|
$ |
139.8 |
|
|
$ |
3.1 |
|
|
$ |
3.1 |
|
|
$ |
— |
|
|
$ |
823.4 |
|
Marine operating
revenue |
— |
|
|
— |
|
|
113.2 |
|
|
21.8 |
|
|
— |
|
|
135.0 |
|
Other revenue |
60.0 |
|
|
4.7 |
|
|
— |
|
|
1.0 |
|
|
— |
|
|
65.7 |
|
Total Revenues |
737.4 |
|
|
144.5 |
|
|
116.3 |
|
|
25.9 |
|
|
— |
|
|
1,024.1 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
Maintenance
expense |
202.3 |
|
|
30.8 |
|
|
14.6 |
|
|
— |
|
|
— |
|
|
247.7 |
|
Marine operating
expense |
— |
|
|
— |
|
|
70.6 |
|
|
19.2 |
|
|
— |
|
|
89.8 |
|
Depreciation
expense |
178.8 |
|
|
35.8 |
|
|
8.1 |
|
|
5.2 |
|
|
— |
|
|
227.9 |
|
Operating lease
expense |
45.3 |
|
|
— |
|
|
1.5 |
|
|
— |
|
|
— |
|
|
46.8 |
|
Other operating
expense |
21.7 |
|
|
3.5 |
|
|
— |
|
|
0.7 |
|
|
— |
|
|
25.9 |
|
Total Expenses |
448.1 |
|
|
70.1 |
|
|
94.8 |
|
|
25.1 |
|
|
— |
|
|
638.1 |
|
Other Income
(Expense) |
|
|
|
|
|
|
|
|
|
|
|
Net gain on asset
dispositions |
42.6 |
|
|
2.6 |
|
|
— |
|
|
11.1 |
|
|
— |
|
|
56.3 |
|
Interest (expense)
income, net |
(90.1 |
) |
|
(24.5 |
) |
|
(3.9 |
) |
|
(6.8 |
) |
|
5.9 |
|
|
(119.4 |
) |
Other (expense)
income |
(4.1 |
) |
|
(2.3 |
) |
|
0.8 |
|
|
2.3 |
|
|
(1.2 |
) |
|
(4.5 |
) |
Share of affiliates’
pretax income (loss) |
0.4 |
|
|
(0.1 |
) |
|
— |
|
|
39.9 |
|
|
— |
|
|
40.2 |
|
Segment profit |
$ |
238.1 |
|
|
$ |
50.1 |
|
|
$ |
18.4 |
|
|
$ |
47.3 |
|
|
$ |
4.7 |
|
|
$ |
358.6 |
|
Selling,
general and administrative expense |
128.8 |
|
Income
taxes (includes $9.6 related to affiliates’ earnings) |
69.9 |
|
Net income |
$ |
159.9 |
|
Selected
Data: |
|
|
|
|
|
|
|
|
|
|
|
Investment volume |
$ |
333.7 |
|
|
$ |
74.7 |
|
|
$ |
13.6 |
|
|
$ |
36.6 |
|
|
$ |
0.4 |
|
|
$ |
459.0 |
|
Net
Gain on Asset Dispositions |
|
|
|
|
|
|
|
|
Asset
Remarketing Income: |
|
|
|
|
|
|
|
|
|
|
|
Disposition gains on owned assets |
$ |
39.5 |
|
|
$ |
0.1 |
|
|
$ |
— |
|
|
$ |
1.8 |
|
|
$ |
— |
|
|
$ |
41.4 |
|
Residual
sharing income |
0.5 |
|
|
— |
|
|
— |
|
|
9.3 |
|
|
— |
|
|
9.8 |
|
Non-remarketing
disposition gains (1) |
4.5 |
|
|
2.5 |
|
|
— |
|
|
— |
|
|
— |
|
|
7.0 |
|
Asset impairments |
(1.9 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(1.9 |
) |
|
$ |
42.6 |
|
|
$ |
2.6 |
|
|
$ |
— |
|
|
$ |
11.1 |
|
|
$ |
— |
|
|
$ |
56.3 |
|
(1) Includes scrapping gains.
GATX CORPORATION AND
SUBSIDIARIESSEGMENT DATA
(UNAUDITED)Nine Months Ended September 30,
2016(In millions) |
|
|
Rail N.A. |
|
Rail Int’l |
|
ASC |
|
PortfolioManagement |
|
Other |
|
GATXConsolidated |
Revenues |
|
|
|
|
|
|
|
|
|
|
|
Lease revenue |
$ |
703.0 |
|
|
$ |
136.8 |
|
|
$ |
3.1 |
|
|
$ |
4.6 |
|
|
$ |
— |
|
|
$ |
847.5 |
|
Marine operating
revenue |
— |
|
|
— |
|
|
102.3 |
|
|
37.4 |
|
|
— |
|
|
139.7 |
|
Other revenue |
63.5 |
|
|
4.8 |
|
|
— |
|
|
0.7 |
|
|
— |
|
|
69.0 |
|
Total Revenues |
766.5 |
|
|
141.6 |
|
|
105.4 |
|
|
42.7 |
|
|
— |
|
|
1,056.2 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
Maintenance
expense |
196.2 |
|
|
36.1 |
|
|
12.3 |
|
|
— |
|
|
— |
|
|
244.6 |
|
Marine operating
expense |
— |
|
|
— |
|
|
64.0 |
|
|
24.9 |
|
|
— |
|
|
88.9 |
|
Depreciation
expense |
173.0 |
|
|
34.2 |
|
|
8.6 |
|
|
5.2 |
|
|
— |
|
|
221.0 |
|
Operating lease
expense |
50.6 |
|
|
— |
|
|
4.0 |
|
|
— |
|
|
(0.1 |
) |
|
54.5 |
|
Other operating
expense |
25.0 |
|
|
3.8 |
|
|
— |
|
|
4.9 |
|
|
— |
|
|
33.7 |
|
Total Expenses |
444.8 |
|
|
74.1 |
|
|
88.9 |
|
|
35.0 |
|
|
(0.1 |
) |
|
642.7 |
|
Other Income
(Expense) |
|
|
|
|
|
|
|
|
|
|
|
Net gain on asset
dispositions |
36.4 |
|
|
1.5 |
|
|
— |
|
|
84.9 |
|
|
— |
|
|
122.8 |
|
Interest (expense)
income, net |
(81.2 |
) |
|
(21.9 |
) |
|
(3.3 |
) |
|
(6.4 |
) |
|
2.9 |
|
|
(109.9 |
) |
Other (expense)
income |
(3.8 |
) |
|
2.0 |
|
|
(0.3 |
) |
|
— |
|
|
(0.8 |
) |
|
(2.9 |
) |
Share of affiliates’
pretax income (loss) |
0.3 |
|
|
(0.2 |
) |
|
— |
|
|
33.0 |
|
|
— |
|
|
33.1 |
|
Segment profit |
$ |
273.4 |
|
|
$ |
48.9 |
|
|
$ |
12.9 |
|
|
$ |
119.2 |
|
|
$ |
2.2 |
|
|
$ |
456.6 |
|
Selling,
general and administrative expense |
127.8 |
|
Income
taxes (includes $4.0 related to affiliates’ earnings) |
102.6 |
|
Net income |
$ |
226.2 |
|
Selected
Data: |
|
|
|
|
|
|
|
|
|
|
|
Investment volume |
$ |
366.7 |
|
|
$ |
63.2 |
|
|
$ |
9.1 |
|
|
$ |
— |
|
|
$ |
3.6 |
|
|
$ |
442.6 |
|
Net
Gain on Asset Dispositions |
|
|
|
|
|
|
|
|
Asset
Remarketing Income: |
|
|
|
|
|
|
|
|
|
|
|
Disposition gains on owned assets |
$ |
32.5 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
4.2 |
|
|
$ |
— |
|
|
$ |
36.7 |
|
Residual
sharing income |
0.7 |
|
|
— |
|
|
— |
|
|
82.5 |
|
|
— |
|
|
83.2 |
|
Non-remarketing
disposition gains (1) |
3.2 |
|
|
1.5 |
|
|
— |
|
|
— |
|
|
— |
|
|
4.7 |
|
Asset impairments |
— |
|
|
— |
|
|
— |
|
|
(1.8 |
) |
|
— |
|
|
(1.8 |
) |
|
$ |
36.4 |
|
|
$ |
1.5 |
|
|
$ |
— |
|
|
$ |
84.9 |
|
|
$ |
— |
|
|
$ |
122.8 |
|
(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 September 30 |
|
Nine Months Ended September 30 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Net income (GAAP) |
$ |
49.0 |
|
|
$ |
95.7 |
|
|
$ |
159.9 |
|
|
$ |
226.2 |
|
|
|
|
|
|
|
|
|
Adjustments
attributable to consolidated income, pretax: |
|
|
|
|
|
|
|
Net loss
(gain) on wholly owned Portfolio Management marineinvestments |
— |
|
|
0.3 |
|
|
(1.8 |
) |
|
(2.4 |
) |
Residual
sharing settlement at Portfolio Management |
— |
|
|
(49.1 |
) |
|
— |
|
|
(49.1 |
) |
Total adjustments
attributable to consolidated income, pretax |
$ |
— |
|
|
$ |
(48.8 |
) |
|
$ |
(1.8 |
) |
|
$ |
(51.5 |
) |
Income taxes thereon,
based on applicable effective tax rate |
$ |
— |
|
|
$ |
18.7 |
|
|
$ |
0.7 |
|
|
$ |
19.7 |
|
|
|
|
|
|
|
|
|
Adjustments
attributable to affiliate's earnings, net of taxes: |
|
|
|
|
|
|
|
Net gain
on Portfolio Management affiliate |
— |
|
|
(0.6 |
) |
|
— |
|
|
(0.6 |
) |
Income
tax rate change |
— |
|
|
(3.9 |
) |
|
— |
|
|
(3.9 |
) |
Total adjustments
attributable to affiliate's earnings, net of taxes |
$ |
— |
|
|
$ |
(4.5 |
) |
|
$ |
— |
|
|
$ |
(4.5 |
) |
|
|
|
|
|
|
|
|
Net income, excluding
tax adjustments and other items (non-GAAP) |
$ |
49.0 |
|
|
$ |
61.1 |
|
|
$ |
158.8 |
|
|
$ |
189.9 |
|
Impact of Tax Adjustments and Other Items on Diluted
Earnings per Share* |
|
|
|
|
|
|
Three Months Ended September 30 |
|
Nine Months Ended September 30 |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Diluted earnings per
share (GAAP) |
$ |
1.25 |
|
|
$ |
2.36 |
|
|
$ |
4.04 |
|
|
$ |
5.49 |
|
Diluted earnings per
share, excluding tax adjustments and other
items (non-GAAP) |
$ |
1.25 |
|
|
$ |
1.50 |
|
|
$ |
4.01 |
|
|
$ |
4.61 |
|
(*) 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) |
|
|
|
9/30/2016 |
|
12/31/2016 |
|
3/31/2017 |
|
6/30/2017 |
|
9/30/2017 |
Assets by Segment, as adjusted (non-GAAP)* |
|
|
|
|
|
|
|
|
Rail North America |
|
$ |
5,243.0 |
|
|
$ |
5,216.5 |
|
|
$ |
5,269.4 |
|
|
$ |
5,304.3 |
|
|
$ |
5,296.3 |
|
Rail International |
|
1,153.0 |
|
|
1,084.8 |
|
|
1,116.0 |
|
|
1,209.3 |
|
|
1,249.4 |
|
ASC |
|
289.6 |
|
|
281.3 |
|
|
307.5 |
|
|
322.0 |
|
|
310.2 |
|
Portfolio
Management |
|
595.0 |
|
|
589.9 |
|
|
597.4 |
|
|
573.2 |
|
|
614.0 |
|
Other |
|
75.9 |
|
|
80.9 |
|
|
72.2 |
|
|
63.9 |
|
|
60.6 |
|
Total Assets, excluding
cash, as adjusted (non-GAAP) |
|
$ |
7,356.5 |
|
|
$ |
7,253.4 |
|
|
$ |
7,362.5 |
|
|
$ |
7,472.7 |
|
|
$ |
7,530.5 |
|
|
|
|
|
|
|
|
|
|
|
|
Debt, Net of
Unrestricted Cash* |
|
|
|
|
|
|
|
|
|
|
Unrestricted cash |
|
$ |
(211.5 |
) |
|
$ |
(307.5 |
) |
|
$ |
(155.2 |
) |
|
$ |
(284.3 |
) |
|
$ |
(199.2 |
) |
Commercial paper and
bank credit facilities |
|
5.1 |
|
|
3.8 |
|
|
3.0 |
|
|
15.7 |
|
|
15.7 |
|
Recourse debt |
|
4,204.4 |
|
|
4,253.2 |
|
|
4,250.9 |
|
|
4,261.2 |
|
|
4,266.7 |
|
Capital lease
obligations |
|
15.1 |
|
|
14.9 |
|
|
13.5 |
|
|
13.1 |
|
|
12.8 |
|
Total debt, net of
unrestricted cash (GAAP) |
|
4,013.1 |
|
|
3,964.4 |
|
|
4,112.2 |
|
|
4,005.7 |
|
|
4,096.0 |
|
Off-balance sheet
recourse debt |
|
483.1 |
|
|
459.1 |
|
|
424.6 |
|
|
488.6 |
|
|
471.5 |
|
Total debt, net of
unrestricted cash, as adjusted (non-GAAP) |
|
$ |
4,496.2 |
|
|
$ |
4,423.5 |
|
|
$ |
4,536.8 |
|
|
$ |
4,494.3 |
|
|
$ |
4,567.5 |
|
Total Recourse Debt
(1) |
|
$ |
4,496.2 |
|
|
$ |
4,423.5 |
|
|
$ |
4,536.8 |
|
|
$ |
4,494.3 |
|
|
$ |
4,567.5 |
|
Shareholders’
Equity |
|
$ |
1,371.5 |
|
|
$ |
1,347.2 |
|
|
$ |
1,385.2 |
|
|
$ |
1,443.0 |
|
|
$ |
1,470.2 |
|
Recourse Leverage
(2) |
|
3.3 |
|
|
3.3 |
|
|
3.3 |
|
|
3.1 |
|
|
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 |
|
$ |
7,089.3 |
|
|
$ |
7,105.4 |
|
|
$ |
7,096.9 |
|
|
$ |
7,272.1 |
|
|
$ |
7,261.9 |
|
Less:
cash |
|
(215.9 |
) |
|
(311.1 |
) |
|
(159.0 |
) |
|
(288.0 |
) |
|
(202.9 |
) |
Total Assets, excluding
cash (GAAP) |
|
6,873.4 |
|
|
6,794.3 |
|
|
6,937.9 |
|
|
6,984.1 |
|
|
7,059.0 |
|
Add off-balance sheet
assets: |
|
|
|
|
|
|
|
|
|
|
Rail
North America |
|
478.9 |
|
|
456.5 |
|
|
423.9 |
|
|
488.1 |
|
|
471.3 |
|
ASC |
|
4.2 |
|
|
2.6 |
|
|
0.7 |
|
|
0.5 |
|
|
0.2 |
|
Total off-balance sheet
assets |
|
483.1 |
|
|
459.1 |
|
|
424.6 |
|
|
488.6 |
|
|
471.5 |
|
Total Assets, excluding
cash, as adjusted (non-GAAP) |
|
$ |
7,356.5 |
|
|
$ |
7,253.4 |
|
|
$ |
7,362.5 |
|
|
$ |
7,472.7 |
|
|
$ |
7,530.5 |
|
(*) 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) |
|
|
9/30/2016 |
|
12/31/2016 |
|
3/31/2017 |
|
6/30/2017 |
|
9/30/2017 |
Rail North
America Statistics |
|
|
|
|
|
|
|
|
|
Lease Price
Index (LPI) (1) |
|
|
|
|
|
|
|
|
|
Average renewal lease
rate change |
(21.4 |
) % |
|
(36.2 |
) % |
|
(32.6 |
) % |
|
(21.4 |
) % |
|
(27.0 |
) % |
Average renewal term
(months) |
29 |
|
|
29 |
|
|
29 |
|
|
32 |
|
|
35 |
|
Fleet
Rollforward (2) |
|
|
|
|
|
|
|
|
|
Beginning
balance |
105,368 |
|
|
104,874 |
|
|
104,522 |
|
|
103,672 |
|
|
104,007 |
|
Cars
added |
764 |
|
|
1,087 |
|
|
795 |
|
|
1,224 |
|
|
637 |
|
Cars
scrapped |
(590 |
) |
|
(579 |
) |
|
(806 |
) |
|
(640 |
) |
|
(854 |
) |
Cars
sold |
(668 |
) |
|
(860 |
) |
|
(839 |
) |
|
(249 |
) |
|
(98 |
) |
Ending
balance |
104,874 |
|
|
104,522 |
|
|
103,672 |
|
|
104,007 |
|
|
103,692 |
|
Utilization |
99.0 |
% |
|
98.9 |
% |
|
99.1 |
% |
|
98.8 |
% |
|
98.5 |
% |
Average active
railcars |
103,479 |
|
|
103,702 |
|
|
102,976 |
|
|
102,760 |
|
|
102,555 |
|
Boxcar
Fleet |
|
|
|
|
|
|
|
|
|
Ending balance |
18,089 |
|
|
17,706 |
|
|
17,415 |
|
|
17,138 |
|
|
16,555 |
|
Utilization |
94.7 |
% |
|
93.8 |
% |
|
92.9 |
% |
|
90.2 |
% |
|
92.4 |
% |
Rail Europe
Statistics |
|
|
|
|
|
|
|
|
|
Fleet
Rollforward |
|
|
|
|
|
|
|
|
|
Beginning
balance |
23,088 |
|
|
22,966 |
|
|
23,122 |
|
|
23,131 |
|
|
23,180 |
|
Cars
added |
78 |
|
|
287 |
|
|
207 |
|
|
288 |
|
|
179 |
|
Cars
scrapped/sold |
(200 |
) |
|
(131 |
) |
|
(198 |
) |
|
(239 |
) |
|
(132 |
) |
Ending
balance |
22,966 |
|
|
23,122 |
|
|
23,131 |
|
|
23,180 |
|
|
23,227 |
|
Utilization |
95.0 |
% |
|
95.6 |
% |
|
95.0 |
% |
|
95.7 |
% |
|
95.6 |
% |
Average active
railcars |
21,830 |
|
|
22,002 |
|
|
22,012 |
|
|
22,024 |
|
|
22,215 |
|
Rail North
America Industry Statistics |
|
|
|
|
|
|
|
|
|
Manufacturing Capacity
Utilization Index (3) |
75.3 |
% |
|
76.0 |
% |
|
75.8 |
% |
|
76.6 |
% |
|
76.0 |
% |
Year-over-year Change
in U.S. Carloadings (excl. intermodal) (4) |
(10.5 |
) % |
|
(8.2 |
) % |
|
5.7 |
% |
|
6.4 |
% |
|
3.8 |
% |
Year-over-year Change
in U.S. Carloadings (chemical) (4) |
1.7 |
% |
|
1.5 |
% |
|
(1.2 |
) % |
|
0.1 |
% |
|
0.2 |
% |
Year-over-year Change
in U.S. Carloadings (petroleum) (4) |
(22.2 |
) % |
|
(21.4 |
) % |
|
(13.2 |
) % |
|
(14.1 |
) % |
|
(14.8 |
) % |
Production Backlog at
Railcar Manufacturers (5) |
77,640 |
|
|
66,681 |
|
|
60,471 |
|
|
66,561 |
|
|
n/a (6) |
American
Steamship Company Statistics |
|
|
|
|
|
|
|
|
|
Total Net Tons Carried
(millions) |
8.7 |
|
|
7.2 |
|
|
1.0 |
|
|
8.5 |
|
|
9.8 |
|
_________
(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.
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