GATX Corporation (NYSE:GATX) today reported 2018 second quarter net
income of $38.8 million or $1.01 per diluted share, compared to net
income of $53.4 million or $1.35 per diluted share in the second
quarter of 2017. Net income for the first six months of 2018
was $115.1 million or $2.99 per diluted share, compared to $110.9
million or $2.79 per diluted share in the prior year period.
The 2018 second quarter and year-to-date results include a
net negative impact of $5.8 million or $0.15 per diluted share,
attributed to costs associated with the closure of a railcar
maintenance facility in Germany. The 2017 second quarter and
year-to-date results include net gains of approximately $1.1
million or $0.03 per diluted share, associated with the planned
exit of the majority of Portfolio Management’s marine
investments. Details related to these items are provided in
the attached Supplemental Information under Tax Adjustments and
Other Items.
Brian A. Kenney, president and chief executive
officer of GATX stated, “Rail North America experienced a more
favorable industry environment in the second quarter, as railroad
car loadings increased and railroad velocity decreased relative to
2017. Although lease revenue remains under pressure due to
continued railcar oversupply and a large railcar manufacturing
backlog, Rail North America continues to perform extremely
well. Fleet utilization was 98.9% at quarter end, the renewal
success rate was 78.6% during the quarter, absolute lease rates
increased across the fleet and costs remain under control.
The renewal lease rate change for GATX’s Lease Price Index was
negative 16.1% in the second quarter with an average renewal term
of 41 months.
“Rail International is performing very well. In
Europe, we are seeing gradual, broad improvement across the
chemical, petroleum, and freight markets. As a result,
utilization at GATX Rail Europe increased to 97.8% at quarter end.
In India, customer demand for new railcar leases is gaining
momentum, and total investment volume for 2018 will be strong.
“Rolls-Royce and Partners Finance affiliates’
performance continues to drive solid results within the Portfolio
Management segment. American Steamship Company successfully
deployed ten vessels into service and is seeing increased demand
for its services.
Mr. Kenney concluded, “Given the improving
business environment, we now expect our 2018 full-year earnings to
be in the range of $4.90 to $5.10 per diluted share. This
guidance excludes the impact of the railcar maintenance facility
closure in Germany, as noted above.”
RAIL NORTH AMERICARail North
America reported segment profit of $64.2 million in the second
quarter of 2018, compared to $74.9 million in the second quarter of
2017. Lower segment profit was a result of lower lease
revenues and lower gains on asset dispositions. Year-to-date,
Rail North America reported segment profit of $173.1 million,
compared to $167.9 million in the same period of 2017. Lower
revenues in 2018 were more than offset by higher gains on asset
dispositions in 2018, resulting in slightly higher segment
profit.
At June 30, 2018, Rail North America’s wholly
owned fleet was comprised of approximately 119,000 railcars,
including approximately 16,000 boxcars. The following fleet
statistics and performance discussion exclude the boxcar fleet.
Fleet utilization was 98.9% at the end of the
second quarter, compared to 98.2% at the end of the prior quarter
and 98.8% at the end of the second quarter of 2017. During
the second quarter of 2018, the renewal lease rate change of the
GATX Lease Price Index (LPI) was negative 16.1%. This compares to
negative 11.6% in the prior quarter and negative 21.4% in the
second quarter of 2017. The average lease renewal term for
cars included in the LPI during the second quarter was 41 months,
compared to 34 months in the prior quarter and 32 months in the
second quarter of 2017. Rail North America’s investment
volume during the second quarter was $149.1 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 $12.8 million in the second
quarter of 2018 compared to $16.6 million in the second quarter of
2017. Rail International reported segment profit of $31.8
million year-to-date 2018, compared to $30.0 million for the same
period of 2017. The second quarter and year-to-date 2018
results include $8.6 million of expense ($5.8 million after-tax)
related to the closure of GATX Rail Europe’s (GRE) railcar
maintenance facility in Germany. Favorable results in the
comparative periods were driven by more railcars on lease and
foreign exchange impacts.
At June 30, 2018, GRE’s fleet consisted of
approximately 23,100 cars and utilization was 97.8%, compared to
96.7% at the end of the prior quarter and 95.7% at the end of the
second quarter of 2017. Additional fleet statistics for GRE are
provided on the last page of this press release.
PORTFOLIO MANAGEMENTPortfolio
Management reported segment profit of $11.4 million in the second
quarter of 2018, compared to $19.8 million in the second quarter of
2017. Segment profit year-to-date 2018 was $25.3 million,
compared to $34.5 million for the same period of 2017. The
decline in segment profit in the second quarter and year-to-date
was predominantly driven by lower residual sharing fees.
Second quarter and year-to-date 2017 segment profit also includes a
net pre-tax gain of approximately $1.8 million ($1.1 million
after-tax) associated with the planned exit of the majority of the
marine investments. Performance at the Rolls-Royce and
Partners Finance affiliates (RRPF) continues to be very strong, as
evidenced by the increase in Share of Affiliate’s Earnings for both
the second quarter and year-to-date 2018 reported results.
AMERICAN STEAMSHIP
COMPANYAmerican Steamship Company (ASC) reported segment
profit of $8.0 million in the second quarter of 2018, compared to
$6.5 million in the second quarter of 2017. Segment profit
year-to-date 2018 was $8.8 million, compared to $6.3 million for
the same period of 2017. ASC carried 9.0 million net tons of
cargo through the second quarter of 2018, compared to 9.5 million
during the same period in 2017. The improvement in segment
profit was primarily driven by more efficient fleet
performance.
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 120 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 2018
second-quarter results. Call details are as follows:
Thursday, July 19th11:00
A.M. Eastern TimeDomestic Dial-In:
1-800-667-5617International Dial-In: 1-334-323-0505Replay:
1-888-203-1112 or 1-719-457-0820 /Access Code: 3565818
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 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, 2017 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
- a significant decline in customer demand for our railcars or
other assets or services, including as a result of:
- weak macroeconomic conditions
- weak market conditions in our customers’ businesses
- declines in harvest or production volumes
- adverse changes in the price of, or demand for,
commodities
- changes in railroad operations or efficiency
- changes in supply chains
- availability of pipelines, trucks, and other alternative modes
of transportation
- other operational or commercial needs or decisions of our
customers
- 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
- the impact of changes to the Internal Revenue Code as a result
of the Tax Cuts and Jobs Act of 2017, and uncertainty as to how
this legislation will be interpreted and applied.
- fluctuations in foreign exchange rates
- failure to successfully negotiate collective bargaining
agreements with the unions representing a substantial portion of
our employees
- 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.
GATX CORPORATION AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)(In millions, except per share
data)
|
Three Months Ended June
30 |
|
Six Months Ended June
30 |
|
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Revenues |
|
|
|
|
|
|
|
Lease revenue |
$ |
271.0 |
|
|
$ |
274.1 |
|
|
$ |
544.2 |
|
|
$ |
546.8 |
|
Marine operating
revenue |
55.8 |
|
|
55.1 |
|
|
70.0 |
|
|
72.1 |
|
Other revenue |
22.7 |
|
|
19.2 |
|
|
40.6 |
|
|
45.6 |
|
Total
Revenues |
349.5 |
|
|
348.4 |
|
|
654.8 |
|
|
664.5 |
|
Expenses |
|
|
|
|
|
|
|
Maintenance
expense |
82.0 |
|
|
84.9 |
|
|
163.2 |
|
|
162.8 |
|
Marine operating
expense |
37.6 |
|
|
38.0 |
|
|
50.1 |
|
|
50.9 |
|
Depreciation
expense |
81.1 |
|
|
77.3 |
|
|
158.5 |
|
|
149.3 |
|
Operating lease
expense |
12.7 |
|
|
15.2 |
|
|
25.7 |
|
|
31.0 |
|
Other operating
expense |
9.1 |
|
|
7.8 |
|
|
17.7 |
|
|
17.4 |
|
Selling, general and
administrative expense |
46.2 |
|
|
42.6 |
|
|
91.1 |
|
|
85.3 |
|
Total
Expenses |
268.7 |
|
|
265.8 |
|
|
506.3 |
|
|
496.7 |
|
Other Income
(Expense) |
|
|
|
|
|
|
|
Net gain on asset
dispositions |
6.1 |
|
|
22.0 |
|
|
62.2 |
|
|
46.9 |
|
Interest expense,
net |
(42.2 |
) |
|
(40.0 |
) |
|
(82.1 |
) |
|
(79.2 |
) |
Other expense |
(9.8 |
) |
|
(1.6 |
) |
|
(11.1 |
) |
|
(3.1 |
) |
Income before
Income Taxes and Share of Affiliates’ Earnings |
34.9 |
|
|
63.0 |
|
|
117.5 |
|
|
132.4 |
|
Income taxes |
(9.1 |
) |
|
(19.3 |
) |
|
(29.7 |
) |
|
(39.9 |
) |
Share of affiliates’
earnings, net of taxes |
13.0 |
|
|
9.7 |
|
|
27.3 |
|
|
18.4 |
|
Net
Income |
$ |
38.8 |
|
|
$ |
53.4 |
|
|
$ |
115.1 |
|
|
$ |
110.9 |
|
|
|
|
|
|
|
|
|
Share
Data |
|
|
|
|
|
|
|
Basic earnings per
share |
$ |
1.03 |
|
|
$ |
1.37 |
|
|
$ |
3.05 |
|
|
$ |
2.83 |
|
Average number of
common shares |
37.7 |
|
|
39.0 |
|
|
37.8 |
|
|
39.2 |
|
Diluted earnings per
share |
$ |
1.01 |
|
|
$ |
1.35 |
|
|
$ |
2.99 |
|
|
$ |
2.79 |
|
Average number of
common shares and common share equivalents |
38.4 |
|
|
39.5 |
|
|
38.5 |
|
|
39.7 |
|
Dividends declared per
common share |
$ |
0.44 |
|
|
$ |
0.42 |
|
|
$ |
0.88 |
|
|
$ |
0.84 |
|
GATX CORPORATION AND
SUBSIDIARIESCONSOLIDATED BALANCE SHEETS
(UNAUDITED)(In millions)
|
|
June 30 |
|
December 31 |
|
|
2018 |
|
2017 |
Assets |
|
|
|
|
Cash and Cash
Equivalents |
|
$ |
237.4 |
|
|
$ |
296.5 |
|
Restricted
Cash |
|
3.7 |
|
|
3.2 |
|
Receivables |
|
|
|
|
Rent and other
receivables |
|
84.7 |
|
|
83.4 |
|
Finance leases |
|
130.8 |
|
|
136.1 |
|
Less: allowance for
losses |
|
(6.5 |
) |
|
(6.4 |
) |
|
|
209.0 |
|
|
213.1 |
|
|
|
|
|
|
Operating
Assets and Facilities |
|
9,206.7 |
|
|
9,045.4 |
|
Less: allowance for
depreciation |
|
(2,911.8 |
) |
|
(2,853.3 |
) |
|
|
6,294.9 |
|
|
6,192.1 |
|
|
|
|
|
|
Investments in
Affiliated Companies |
|
468.9 |
|
|
441.0 |
|
Goodwill |
|
84.0 |
|
|
85.6 |
|
Other
Assets |
|
197.6 |
|
|
190.9 |
|
Total
Assets |
|
$ |
7,495.5 |
|
|
$ |
7,422.4 |
|
|
|
|
|
|
Liabilities and
Shareholders’ Equity |
|
|
|
|
Accounts
Payable and Accrued Expenses |
|
$ |
162.5 |
|
|
$ |
154.3 |
|
Debt |
|
|
|
|
Commercial paper and
borrowings under bank credit facilities |
|
4.3 |
|
|
4.3 |
|
Recourse |
|
4,397.9 |
|
|
4,371.7 |
|
Capital lease
obligations |
|
11.9 |
|
|
12.5 |
|
|
|
4,414.1 |
|
|
4,388.5 |
|
|
|
|
|
|
Deferred Income
Taxes |
|
881.4 |
|
|
853.7 |
|
Other
Liabilities |
|
219.9 |
|
|
233.2 |
|
Total
Liabilities |
|
5,677.9 |
|
|
5,629.7 |
|
Total
Shareholders’ Equity |
|
1,817.6 |
|
|
1,792.7 |
|
Total
Liabilities and Shareholders’ Equity |
|
$ |
7,495.5 |
|
|
$ |
7,422.4 |
|
GATX CORPORATION AND
SUBSIDIARIESSEGMENT DATA
(UNAUDITED)Three Months Ended June 30,
2018(In millions)
|
Rail N.A. |
|
Rail Int’l |
|
Portfolio Management |
|
ASC |
|
Other |
|
GATXConsolidated |
Revenues |
|
|
|
|
|
|
|
|
|
|
|
Lease revenue |
$ |
217.6 |
|
|
$ |
52.2 |
|
|
$ |
0.2 |
|
|
$ |
1.0 |
|
|
$ |
— |
|
|
$ |
271.0 |
|
Marine operating
revenue |
— |
|
|
— |
|
|
3.5 |
|
|
52.3 |
|
|
— |
|
|
55.8 |
|
Other revenue |
20.1 |
|
|
2.2 |
|
|
0.4 |
|
|
— |
|
|
— |
|
|
22.7 |
|
Total Revenues |
237.7 |
|
|
54.4 |
|
|
4.1 |
|
|
53.3 |
|
|
— |
|
|
349.5 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
Maintenance
expense |
64.1 |
|
|
11.2 |
|
|
— |
|
|
6.7 |
|
|
— |
|
|
82.0 |
|
Marine operating
expense |
— |
|
|
— |
|
|
4.2 |
|
|
33.4 |
|
|
— |
|
|
37.6 |
|
Depreciation
expense |
61.8 |
|
|
13.8 |
|
|
1.9 |
|
|
3.6 |
|
|
— |
|
|
81.1 |
|
Operating lease
expense |
12.7 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
12.7 |
|
Other operating
expense |
7.5 |
|
|
1.5 |
|
|
0.1 |
|
|
— |
|
|
— |
|
|
9.1 |
|
Total Expenses |
146.1 |
|
|
26.5 |
|
|
6.2 |
|
|
43.7 |
|
|
— |
|
|
222.5 |
|
Other Income
(Expense) |
|
|
|
|
|
|
|
|
|
|
|
Net gain on asset
dispositions |
4.7 |
|
|
1.1 |
|
|
0.3 |
|
|
— |
|
|
— |
|
|
6.1 |
|
Interest (expense)
income, net |
(31.1 |
) |
|
(8.9 |
) |
|
(2.7 |
) |
|
(1.5 |
) |
|
2.0 |
|
|
(42.2 |
) |
Other expense |
(1.2 |
) |
|
(7.3 |
) |
|
— |
|
|
(0.1 |
) |
|
(1.2 |
) |
|
(9.8 |
) |
Share of affiliates’
pre-tax income |
0.2 |
|
|
— |
|
|
15.9 |
|
|
— |
|
|
— |
|
|
16.1 |
|
Segment profit |
$ |
64.2 |
|
|
$ |
12.8 |
|
|
$ |
11.4 |
|
|
$ |
8.0 |
|
|
$ |
0.8 |
|
|
$ |
97.2 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative expense |
46.2 |
|
Income
taxes (includes $3.1 related to affiliates’ earnings) |
12.2 |
|
Net income |
$ |
38.8 |
|
Selected
Data: |
|
|
|
|
|
|
|
|
|
|
|
Investment volume |
$ |
149.1 |
|
|
$ |
34.6 |
|
|
$ |
— |
|
|
$ |
4.1 |
|
|
$ |
0.8 |
|
|
$ |
188.6 |
|
Net Gain on
Asset Dispositions |
|
|
|
|
|
|
|
|
|
|
|
Asset
Remarketing Income: |
|
|
|
|
|
|
|
|
|
|
|
Disposition gains on owned assets |
$ |
4.2 |
|
|
$ |
— |
|
|
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
4.2 |
|
Residual
sharing income |
0.3 |
|
|
— |
|
|
0.3 |
|
|
— |
|
|
— |
|
|
0.6 |
|
Non-remarketing
disposition gains (1) |
0.2 |
|
|
1.1 |
|
|
— |
|
|
— |
|
|
— |
|
|
1.3 |
|
Asset impairments |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
$ |
4.7 |
|
|
$ |
1.1 |
|
|
0.3 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
6.1 |
|
(1) Includes scrapping gains.
GATX CORPORATION AND
SUBSIDIARIESSEGMENT DATA
(UNAUDITED)Three Months Ended June 30,
2017(In millions)
|
Rail N.A. |
|
Rail Int’l |
|
Portfolio Management |
|
ASC |
|
Other |
|
GATX Consolidated |
Revenues |
|
|
|
|
|
|
|
|
|
|
|
Lease revenue |
$ |
225.7 |
|
|
$ |
46.2 |
|
|
$ |
1.2 |
|
|
$ |
1.0 |
|
|
$ |
— |
|
|
$ |
274.1 |
|
Marine operating
revenue |
— |
|
|
— |
|
|
7.4 |
|
|
47.7 |
|
|
— |
|
|
55.1 |
|
Other revenue |
17.3 |
|
|
1.6 |
|
|
0.3 |
|
|
— |
|
|
— |
|
|
19.2 |
|
Total Revenues |
243.0 |
|
|
47.8 |
|
|
8.9 |
|
|
48.7 |
|
|
— |
|
|
348.4 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
Maintenance
expense |
68.5 |
|
|
9.7 |
|
|
— |
|
|
6.7 |
|
|
— |
|
|
84.9 |
|
Marine operating
expense |
— |
|
|
— |
|
|
7.4 |
|
|
30.6 |
|
|
— |
|
|
38.0 |
|
Depreciation
expense |
59.7 |
|
|
11.8 |
|
|
1.8 |
|
|
4.0 |
|
|
— |
|
|
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 |
|
|
9.5 |
|
|
41.7 |
|
|
— |
|
|
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 |
) |
|
(2.4 |
) |
|
(1.3 |
) |
|
0.3 |
|
|
(40.0 |
) |
Other (expense)
income |
(1.2 |
) |
|
(1.1 |
) |
|
— |
|
|
0.8 |
|
|
(0.1 |
) |
|
(1.6 |
) |
Share of affiliates’
pre-tax income (loss) |
0.2 |
|
|
(0.1 |
) |
|
12.3 |
|
|
— |
|
|
— |
|
|
12.4 |
|
Segment profit |
$ |
74.9 |
|
|
$ |
16.6 |
|
|
$ |
19.8 |
|
|
$ |
6.5 |
|
|
$ |
0.2 |
|
|
$ |
118.0 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative expense |
42.6 |
|
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 |
) |
|
$ |
10.7 |
|
|
$ |
0.8 |
|
|
$ |
10.5 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
22.0 |
|
(1) Includes scrapping gains.
GATX CORPORATION AND
SUBSIDIARIESSEGMENT DATA
(UNAUDITED)Six Months Ended June 30,
2018(In millions)
|
Rail N.A. |
|
Rail Int’l |
|
Portfolio Management |
|
ASC |
|
Other |
|
GATX Consolidated |
Revenues |
|
|
|
|
|
|
|
|
|
|
|
Lease revenue |
$ |
437.1 |
|
|
$ |
104.6 |
|
|
$ |
0.5 |
|
|
$ |
2.0 |
|
|
$ |
— |
|
|
$ |
544.2 |
|
Marine operating
revenue |
— |
|
|
— |
|
|
7.9 |
|
|
62.1 |
|
|
— |
|
|
70.0 |
|
Other revenue |
35.9 |
|
|
4.2 |
|
|
0.5 |
|
|
— |
|
|
— |
|
|
40.6 |
|
Total Revenues |
473.0 |
|
|
108.8 |
|
|
8.9 |
|
|
64.1 |
|
|
— |
|
|
654.8 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
Maintenance
expense |
132.2 |
|
|
23.7 |
|
|
— |
|
|
7.3 |
|
|
— |
|
|
163.2 |
|
Marine operating
expense |
— |
|
|
— |
|
|
8.5 |
|
|
41.6 |
|
|
— |
|
|
50.1 |
|
Depreciation
expense |
123.3 |
|
|
27.9 |
|
|
3.7 |
|
|
3.6 |
|
|
— |
|
|
158.5 |
|
Operating lease
expense |
25.7 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
25.7 |
|
Other operating
expense |
14.4 |
|
|
3.0 |
|
|
0.3 |
|
|
— |
|
|
— |
|
|
17.7 |
|
Total Expenses |
295.6 |
|
|
54.6 |
|
|
12.5 |
|
|
52.5 |
|
|
— |
|
|
415.2 |
|
Other Income
(Expense) |
|
|
|
|
|
|
|
|
|
|
|
Net gain on asset
dispositions |
58.8 |
|
|
2.7 |
|
|
0.6 |
|
|
0.1 |
|
|
— |
|
|
62.2 |
|
Interest (expense)
income, net |
(61.3 |
) |
|
(17.6 |
) |
|
(5.0 |
) |
|
(2.8 |
) |
|
4.6 |
|
|
(82.1 |
) |
Other expense |
(2.1 |
) |
|
(7.5 |
) |
|
— |
|
|
(0.1 |
) |
|
(1.4 |
) |
|
(11.1 |
) |
Share of affiliates’
pre-tax income |
0.3 |
|
|
— |
|
|
33.3 |
|
|
— |
|
|
— |
|
|
33.6 |
|
Segment profit |
$ |
173.1 |
|
|
$ |
31.8 |
|
|
$ |
25.3 |
|
|
$ |
8.8 |
|
|
$ |
3.2 |
|
|
$ |
242.2 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative expense |
91.1 |
|
Income
taxes (includes $6.3 related to affiliates’ earnings) |
36.0 |
|
Net income |
$ |
115.1 |
|
Selected
Data: |
|
|
|
|
|
|
|
|
|
|
|
Investment volume |
$ |
285.6 |
|
|
$ |
64.1 |
|
|
$ |
— |
|
|
$ |
15.8 |
|
|
$ |
1.5 |
|
|
$ |
367.0 |
|
Net Gain on
Asset Dispositions |
|
|
|
|
|
|
|
|
|
|
|
Asset
Remarketing Income: |
|
|
|
|
|
|
|
|
|
|
|
Disposition gains on owned assets |
$ |
54.1 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
0.1 |
|
|
$ |
— |
|
|
$ |
54.2 |
|
Residual
sharing income |
0.4 |
|
|
— |
|
|
0.6 |
|
|
— |
|
|
— |
|
|
1.0 |
|
Non-remarketing
disposition gains (1) |
4.3 |
|
|
2.7 |
|
|
— |
|
|
— |
|
|
— |
|
|
7.0 |
|
Asset impairments |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
$ |
58.8 |
|
|
$ |
2.7 |
|
|
$ |
0.6 |
|
|
$ |
0.1 |
|
|
$ |
— |
|
|
$ |
62.2 |
|
(1) Includes scrapping gains.
GATX CORPORATION AND
SUBSIDIARIESSEGMENT DATA
(UNAUDITED)Six Months Ended June 30,
2017(In millions)
|
Rail N.A. |
|
Rail Int’l |
|
Portfolio Management |
|
ASC |
|
Other |
|
GATX Consolidated |
Revenues |
|
|
|
|
|
|
|
|
|
|
|
Lease revenue |
$ |
452.9 |
|
|
$ |
89.5 |
|
|
$ |
2.4 |
|
|
$ |
2.0 |
|
|
$ |
— |
|
|
$ |
546.8 |
|
Marine operating
revenue |
— |
|
|
— |
|
|
18.0 |
|
|
54.1 |
|
|
— |
|
|
72.1 |
|
Other revenue |
42.1 |
|
|
2.7 |
|
|
0.8 |
|
|
— |
|
|
— |
|
|
45.6 |
|
Total Revenues |
495.0 |
|
|
92.2 |
|
|
21.2 |
|
|
56.1 |
|
|
— |
|
|
664.5 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
Maintenance
expense |
136.2 |
|
|
19.7 |
|
|
— |
|
|
6.9 |
|
|
— |
|
|
162.8 |
|
Marine operating
expense |
— |
|
|
— |
|
|
15.0 |
|
|
35.9 |
|
|
— |
|
|
50.9 |
|
Depreciation
expense |
118.7 |
|
|
23.0 |
|
|
3.5 |
|
|
4.1 |
|
|
— |
|
|
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 |
|
|
19.1 |
|
|
48.1 |
|
|
— |
|
|
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 |
) |
|
(4.6 |
) |
|
(2.5 |
) |
|
3.5 |
|
|
(79.2 |
) |
Other (expense)
income |
(3.2 |
) |
|
(2.6 |
) |
|
2.3 |
|
|
0.8 |
|
|
(0.4 |
) |
|
(3.1 |
) |
Share of affiliates’
pre-tax income (loss) |
0.3 |
|
|
(0.1 |
) |
|
23.9 |
|
|
— |
|
|
— |
|
|
24.1 |
|
Segment profit |
$ |
167.9 |
|
|
$ |
30.0 |
|
|
$ |
34.5 |
|
|
$ |
6.3 |
|
|
$ |
3.1 |
|
|
$ |
241.8 |
|
Less: |
|
|
|
|
|
|
|
|
|
|
|
Selling,
general and administrative expense |
85.3 |
|
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 |
) |
|
$ |
34.5 |
|
|
$ |
1.6 |
|
|
$ |
10.8 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
46.9 |
|
(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 |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Net income (GAAP) |
$ |
38.8 |
|
|
$ |
53.4 |
|
|
$ |
115.1 |
|
|
$ |
110.9 |
|
|
|
|
|
|
|
|
|
Adjustments
attributable to consolidated pre-tax income: |
|
|
|
|
|
|
|
Costs
attributable to the closure of a maintenance facility at Rail
International |
8.6 |
|
|
— |
|
|
8.6 |
|
|
— |
|
Net gain
on wholly owned Portfolio Management marine investments |
— |
|
|
(1.8 |
) |
|
— |
|
|
(1.8 |
) |
Total adjustments
attributable to consolidated pre-tax income |
$ |
8.6 |
|
|
$ |
(1.8 |
) |
|
$ |
8.6 |
|
|
$ |
(1.8 |
) |
Income taxes thereon,
based on applicable effective tax rate |
$ |
(2.8 |
) |
|
$ |
0.7 |
|
|
$ |
(2.8 |
) |
|
$ |
0.7 |
|
|
|
|
|
|
|
|
|
Net income, excluding
tax adjustments and other items (non-GAAP) |
$ |
44.6 |
|
|
$ |
52.3 |
|
|
$ |
120.9 |
|
|
$ |
109.8 |
|
Impact of Tax Adjustments and Other
Items on Diluted Earnings per Share*
|
Three Months Ended June 30 |
|
Six Months Ended June 30 |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Diluted earnings per
share (GAAP) |
$ |
1.01 |
|
|
$ |
1.35 |
|
|
$ |
2.99 |
|
|
$ |
2.79 |
|
Diluted earnings per
share, excluding tax adjustments and other items (non-GAAP) |
$ |
1.16 |
|
|
$ |
1.32 |
|
|
$ |
3.14 |
|
|
$ |
2.76 |
|
(*) 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 net income, excluding tax adjustments and
other items, 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)
|
|
6/30/2017 |
|
9/30/2017 |
|
12/31/2017 |
|
3/31/2018 |
|
6/30/2018 |
Assets by Segment, as adjusted (non-GAAP)* |
|
|
|
|
|
|
|
|
Rail North America |
|
$ |
5,304.3 |
|
|
$ |
5,296.3 |
|
|
$ |
5,334.0 |
|
|
$ |
5,362.2 |
|
|
$ |
5,409.0 |
|
Rail International |
|
1,209.3 |
|
|
1,249.4 |
|
|
1,291.5 |
|
|
1,329.0 |
|
|
1,266.6 |
|
Portfolio
Management |
|
573.2 |
|
|
614.0 |
|
|
580.6 |
|
|
593.1 |
|
|
605.8 |
|
ASC |
|
322.0 |
|
|
310.2 |
|
|
286.6 |
|
|
298.2 |
|
|
313.6 |
|
Other |
|
63.9 |
|
|
60.6 |
|
|
65.7 |
|
|
59.8 |
|
|
61.1 |
|
Total Assets, excluding
cash, as adjusted (non-GAAP) |
|
$ |
7,472.7 |
|
|
$ |
7,530.5 |
|
|
$ |
7,558.4 |
|
|
$ |
7,642.3 |
|
|
$ |
7,656.1 |
|
Debt, Net of
Unrestricted Cash* |
|
|
|
|
|
|
|
|
|
|
Unrestricted cash |
|
$ |
(284.3 |
) |
|
$ |
(199.2 |
) |
|
$ |
(296.5 |
) |
|
$ |
(233.1 |
) |
|
$ |
(237.4 |
) |
Commercial paper and
bank credit facilities |
|
15.7 |
|
|
15.7 |
|
|
4.3 |
|
|
4.4 |
|
|
4.3 |
|
Recourse debt |
|
4,261.2 |
|
|
4,266.7 |
|
|
4,371.7 |
|
|
4,359.5 |
|
|
4,397.9 |
|
Capital lease
obligations |
|
13.1 |
|
|
12.8 |
|
|
12.5 |
|
|
12.2 |
|
|
11.9 |
|
Total debt, net of
unrestricted cash (GAAP) |
|
4,005.7 |
|
|
4,096.0 |
|
|
4,092.0 |
|
|
4,143.0 |
|
|
4,176.7 |
|
Off-balance sheet
recourse debt |
|
488.6 |
|
|
471.5 |
|
|
435.7 |
|
|
411.7 |
|
|
401.7 |
|
Total recourse debt,
net of unrestricted cash, as adjusted (non-GAAP) (1) |
|
$ |
4,494.3 |
|
|
$ |
4,567.5 |
|
|
$ |
4,527.7 |
|
|
$ |
4,554.7 |
|
|
$ |
4,578.4 |
|
Shareholders’ Equity
(2) |
|
$ |
1,443.0 |
|
|
$ |
1,470.2 |
|
|
$ |
1,792.7 |
|
|
$ |
1,839.7 |
|
|
$ |
1,817.6 |
|
Recourse Leverage
(3) |
|
3.1 |
|
|
3.1 |
|
|
2.5 |
|
|
2.5 |
|
|
2.5 |
|
_________
(1) Includes on- and off-balance sheet
recourse debt; capital lease obligations; commercial paper and bank
credit facilities, net of unrestricted cash.(2)
Balances for 12/31/2017, 3/31/2018 and 6/30/2018 reflect the impact
of the Tax Cuts and Jobs Act recognized in the fourth quarter of
2017.(3) 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 |
|
$ |
7,272.1 |
|
|
$ |
7,261.9 |
|
|
$ |
7,422.4 |
|
|
$ |
7,468.0 |
|
|
$ |
7,495.5 |
|
Less:
cash |
|
(288.0 |
) |
|
(202.9 |
) |
|
(299.7 |
) |
|
(237.4 |
) |
|
(241.1 |
) |
Total Assets, excluding
cash (GAAP) |
|
6,984.1 |
|
|
7,059.0 |
|
|
7,122.7 |
|
|
7,230.6 |
|
|
7,254.4 |
|
Add off-balance sheet
assets: |
|
|
|
|
|
|
|
|
|
|
Rail
North America |
|
488.1 |
|
|
471.3 |
|
|
435.7 |
|
|
411.7 |
|
|
401.7 |
|
ASC |
|
0.5 |
|
|
0.2 |
|
|
— |
|
|
— |
|
|
— |
|
Total off-balance sheet
assets |
|
488.6 |
|
|
471.5 |
|
|
435.7 |
|
|
411.7 |
|
|
401.7 |
|
Total Assets, excluding
cash, as adjusted (non-GAAP) |
|
$ |
7,472.7 |
|
|
$ |
7,530.5 |
|
|
$ |
7,558.4 |
|
|
$ |
7,642.3 |
|
|
$ |
7,656.1 |
|
(*) We include 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)
|
6/30/2017 |
|
9/30/2017 |
|
12/31/2017 |
|
3/31/2018 |
|
6/30/2018 |
Rail North
America Statistics |
|
|
|
|
|
|
|
|
|
Lease Price
Index (LPI) (1) |
|
|
|
|
|
|
|
|
|
Average renewal lease
rate change |
(21.4 |
)% |
|
(27.0 |
)% |
|
(32.4 |
)% |
|
(11.6 |
)% |
|
(16.1 |
)% |
Average renewal term
(months) |
32 |
|
|
35 |
|
|
36 |
|
|
34 |
|
|
41 |
|
Fleet
Rollforward (2) |
|
|
|
|
|
|
|
|
|
Beginning
balance |
103,672 |
|
|
104,007 |
|
|
103,692 |
|
|
103,730 |
|
|
102,597 |
|
Cars
added |
1,224 |
|
|
637 |
|
|
786 |
|
|
1,226 |
|
|
1,231 |
|
Cars
scrapped |
(640 |
) |
|
(854 |
) |
|
(600 |
) |
|
(673 |
) |
|
(720 |
) |
Cars
sold |
(249 |
) |
|
(98 |
) |
|
(148 |
) |
|
(1,686 |
) |
|
(218 |
) |
Ending
balance |
104,007 |
|
|
103,692 |
|
|
103,730 |
|
|
102,597 |
|
|
102,890 |
|
Utilization |
98.8 |
% |
|
98.5 |
% |
|
98.2 |
% |
|
98.2 |
% |
|
98.9 |
% |
Average active
railcars |
102,760 |
|
|
102,555 |
|
|
102,078 |
|
|
101,208 |
|
|
101,330 |
|
Boxcar
Fleet |
|
|
|
|
|
|
|
|
|
Ending balance |
17,138 |
|
|
16,555 |
|
|
16,398 |
|
|
16,227 |
|
|
16,007 |
|
Utilization |
90.2 |
% |
|
92.4 |
% |
|
92.6 |
% |
|
93.5 |
% |
|
92.8 |
% |
Rail Europe
Statistics |
|
|
|
|
|
|
|
|
|
Fleet
Rollforward |
|
|
|
|
|
|
|
|
|
Beginning
balance |
23,131 |
|
|
23,180 |
|
|
23,227 |
|
|
23,166 |
|
|
23,004 |
|
Cars
added |
288 |
|
|
179 |
|
|
197 |
|
|
63 |
|
|
245 |
|
Cars
scrapped/sold |
(239 |
) |
|
(132 |
) |
|
(258 |
) |
|
(225 |
) |
|
(125 |
) |
Ending
balance |
23,180 |
|
|
23,227 |
|
|
23,166 |
|
|
23,004 |
|
|
23,124 |
|
Utilization |
95.7 |
% |
|
95.6 |
% |
|
96.8 |
% |
|
96.7 |
% |
|
97.8 |
% |
Average active
railcars |
22,024 |
|
|
22,215 |
|
|
22,290 |
|
|
22,237 |
|
|
22,407 |
|
Rail North
America Industry Statistics |
|
|
|
|
|
|
|
|
|
Manufacturing Capacity
Utilization Index (3) |
76.6 |
% |
|
76.1 |
% |
|
77.3 |
% |
|
77.5 |
% |
|
78.0 |
% |
Year-over-year Change
in U.S. Carloadings (excl. intermodal) (4) |
6.4 |
% |
|
3.8 |
% |
|
2.9 |
% |
|
(0.3 |
)% |
|
1.3 |
% |
Year-over-year Change
in U.S. Carloadings (chemical) (4) |
0.1 |
% |
|
0.2 |
% |
|
1.2 |
% |
|
3.1 |
% |
|
3.8 |
% |
Year-over-year Change
in U.S. Carloadings (petroleum) (4) |
(14.1 |
)% |
|
(14.8 |
)% |
|
(12.2 |
)% |
|
3.3 |
% |
|
6.8 |
% |
Production Backlog at
Railcar Manufacturers (5) |
66,561 |
|
|
64,253 |
|
|
58,275 |
|
|
55,216 |
|
|
n/a (6) |
American
Steamship Company Statistics |
|
|
|
|
|
|
|
|
|
Total Net Tons Carried
(millions) |
8.5 |
|
|
9.8 |
|
|
8.5 |
|
|
0.9 |
|
|
8.1 |
|
_________
(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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