Market Overview

GATX Corporation Reports 2019 Second-Quarter Results

Share:
  • Net income for the second quarter 2019 was $68.0 million or $1.86 per diluted share
  • Company reiterates 2019 full-year earnings guidance
  • Remarketing income in Rail North America was $26.9 million for the second quarter 2019
  • Rail North America's fleet utilization increased to 99.5%

CHICAGO, July 18, 2019 (GLOBE NEWSWIRE) -- GATX Corporation (NYSE:GATX) today reported 2019 second quarter net income of $68.0 million or $1.86 per diluted share, compared to net income of $38.8 million or $1.01 per diluted share in the second quarter of 2018. Net income for the first six months of 2019 was $109.5 million or $2.97 per diluted share, compared to $115.1 million or $2.99 per diluted share in the prior year period. The 2019 second quarter and year-to-date results include a net deferred tax benefit of $2.8 million or $0.08 per diluted share related to an enacted foreign tax rate reduction. 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. 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, "Conditions in the North American railcar leasing market are consistent with our expectations coming into the year. Fleet utilization increased to 99.5% at the end of the quarter, and our renewal success rate was 85.3%. As expected, the renewal lease rate change of GATX's Lease Price Index was negative 2.8% in the quarter, with an average renewal term of 53 months.

"Rail International continues to perform well with GATX Rail Europe's fleet utilization remaining steady at 98.9% at quarter end. In India, customer demand for new railcar leases continues to gain momentum, and investment volume for 2019 remains robust.

"The Rolls-Royce and Partners Finance affiliates' performance continues to provide outstanding results within the Portfolio Management segment. American Steamship Company successfully deployed eleven vessels and is benefiting from favorable operating conditions on the Great Lakes.

Mr. Kenney concluded, "Given the current business environment and our financial performance thus far in 2019, our 2019 full-year earnings estimate is unchanged at $4.85-$5.15 per diluted share. This guidance excludes the impact of Tax Benefits and Other Items."

RAIL NORTH AMERICA

Rail North America reported segment profit of $85.8 million in the second quarter of 2019, compared to $64.2 million in the second quarter of 2018. Higher segment profit was primarily a result of higher gains on asset dispositions. Year-to-date, Rail North America reported segment profit of $154.2 million, compared to $173.1 million in the same period of 2018. Higher revenues in 2019 were more than offset by lower gains on asset dispositions and higher ownership costs in 2019, resulting in lower segment profit.

At June 30, 2019, Rail North America's wholly owned fleet was comprised of approximately 119,500 railcars, including approximately 16,000 boxcars. The following fleet statistics and performance discussion exclude the boxcar fleet.

Fleet utilization was 99.5% at the end of the second quarter, compared to 99.4% at the end of the prior quarter and 98.9% at the end of the second quarter of 2018. During the second quarter of 2019, the renewal lease rate change of the GATX Lease Price Index (LPI) was negative 2.8%. This compares to positive 5.2% in the prior quarter and negative 16.1% in the second quarter of 2018. The average lease renewal term for cars included in the LPI during the second quarter was 53 months, compared to 39 months in the prior quarter and 41 months in the second quarter of 2018. Rail North America's investment volume during the second quarter was $105.3 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 INTERNATIONAL

Rail International's segment profit was $21.3 million in the second quarter of 2019 compared to $12.8 million in the second quarter of 2018. Rail International reported segment profit of $36.1 million year-to-date 2019, compared to $31.8 million for the same period of 2018. 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. Excluding this expense, results in the comparative periods were favorably impacted by more railcars on lease and negatively impacted by changes in foreign currency exchange rates.

At June 30, 2019, GRE's fleet consisted of approximately 24,000 cars and utilization was 98.9%, compared to 98.9% at the end of the prior quarter and 97.8% at the end of the second quarter of 2018. Additional fleet statistics for GRE are provided on the last page of this press release.

PORTFOLIO MANAGEMENT

Portfolio Management reported segment profit of $11.9 million in the second quarter of 2019, compared to $11.4 million in the second quarter of 2018. Segment profit year-to-date 2019 was $24.2 million, compared to $25.3 million for the same period of 2018. The decline in segment profit year-to-date was predominantly driven by lower marine operating revenue. Performance at the Rolls-Royce and Partners Finance affiliates (RRPF) continues to be very strong, as evidenced by an increase in Share of Affiliate's Earnings for both the second quarter and year-to-date 2019 reported results as compared to the prior year periods.

AMERICAN STEAMSHIP COMPANY

American Steamship Company (ASC) reported segment profit of $12.1 million in the second quarter of 2019, compared to $8.0 million in the second quarter of 2018. Segment profit year-to-date 2019 was $14.6 million, compared to $8.8 million for the same period of 2018. ASC carried 9.9 million net tons of cargo through the second quarter of 2019, compared to 9.0 million during the same period in 2018. The improvement in segment profit was primarily driven by favorable operating conditions and more efficient fleet performance.

COMPANY DESCRIPTION

GATX Corporation (NYSE:GATX) strives to be recognized as the finest railcar leasing company in the world by our customers, our shareholders, our employees and the communities where we operate. As the leading global railcar lessor, GATX has been providing quality railcars and services to its customers for more than 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 INFORMATION

GATX Corporation will host a teleconference to discuss 2019 second-quarter results. Call details are as follows:

Thursday, July 18th
11:00 A.M. Eastern Time
Domestic Dial-In: 1-800-353-6461
International Dial-In: 1-334-323-0501
Replay: 1-888-203-1112 or 1-719-457-0820 / Access Code: 2679577

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 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," "outlook," "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, 2018 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, including increased costs due to tariffs or trade disputes
  • 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
  • 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
  • uncertainty relating to the LIBOR calculation process and potential phasing out of LIBOR after 2021
  • competitive factors in our primary markets, including competitors with a significantly lower cost of capital than GATX
  • risks related to our international operations and expansion into new geographic markets, including the imposition of new or additional tariffs, quotas, or trade barriers
  • 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 Corporation
Jennifer McManus
Senior Director, Investor Relations
GATX Corporation
312-621-6409
jennifer.mcmanus@gatx.com

Investor, corporate, financial, historical financial, and news release information may be found at www.gatx.com.

(7/18/2019)

 
GATX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In millions, except per share data)
 
  Three Months Ended
June 30
  Six Months Ended
June 30
  2019   2018   2019   2018
Revenues              
Lease revenue $ 274.0     $ 271.0     $ 548.4     $ 544.2  
Marine operating revenue 60.9     55.8     74.0     70.0  
Other revenue 24.5     22.7     54.0     40.6  
Total Revenues 359.4     349.5     676.4     654.8  
Expenses              
Maintenance expense 85.7     82.0     166.9     163.2  
Marine operating expense 41.0     37.6     53.1     50.1  
Depreciation expense 83.8     81.1     163.7     158.5  
Operating lease expense 13.7     12.7     27.4     25.7  
Other operating expense 7.8     9.1     15.8     17.7  
Selling, general and administrative expense 45.1     46.2     91.2     91.1  
Total Expenses 277.1     268.7     518.1     506.3  
Other Income (Expense)              
Net gain on asset dispositions 32.9     6.1     41.8     62.2  
Interest expense, net (47.1 )   (42.2 )   (93.6 )   (82.1 )
Other expense (0.6 )   (9.8 )   (3.8 )   (11.1 )
Income before Income Taxes and Share of Affiliates' Earnings 67.5     34.9     102.7     117.5  
Income taxes (15.6 )   (9.1 )   (24.0 )   (29.7 )
Share of affiliates' earnings, net of taxes 16.1     13.0     30.8     27.3  
Net Income $ 68.0     $ 38.8     $ 109.5     $ 115.1  
               
Share Data              
Basic earnings per share $ 1.89     $ 1.03     $ 3.02     $ 3.05  
Average number of common shares 36.0     37.7     36.2     37.8  
Diluted earnings per share $ 1.86     $ 1.01     $ 2.97     $ 2.99  
Average number of common shares and common share equivalents 36.7     38.4     36.9     38.5  
Dividends declared per common share $ 0.46     $ 0.44     $ 0.92     $ 0.88  


GATX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In millions)
 
  June 30   December 31
  2019   2018
Assets      
Cash and Cash Equivalents $ 286.6     $ 100.2  
Restricted Cash 0.3     6.5  
Receivables      
Rent and other receivables 97.8     87.0  
Finance leases (as lessor) 95.3     126.4  
Less: allowance for losses (6.0 )   (6.4 )
  187.1     207.0  
       
Operating Assets and Facilities 9,728.9     9,545.9  
Less: allowance for depreciation (3,122.6 )   (3,013.2 )
  6,606.3     6,532.7  
Lease Assets (as lessee)      
Right of use assets, net of accumulated depreciation 440.6      
Finance leases, net of accumulated depreciation 16.5     16.8  
  457.1     16.8  
       
Investments in Affiliated Companies 495.8     464.5  
Goodwill 82.4     82.9  
Other Assets 237.5     206.1  
Total Assets $ 8,353.1     $ 7,616.7  
       
Liabilities and Shareholders' Equity      
Accounts Payable and Accrued Expenses $ 152.8     $ 177.5  
Debt      
Commercial paper and borrowings under bank credit facilities 26.0     110.8  
Recourse 4,832.5     4,429.7  
  4,858.5     4,540.5  
Lease Obligations (as lessee)      
Operating leases 454.5      
Finance leases 10.6     11.3  
  465.1     11.3  
       
Deferred Income Taxes 908.4     877.8  
Other Liabilities 133.5     221.5  
Total Liabilities 6,518.3     5,828.6  
Total Shareholders' Equity 1,834.8     1,788.1  
Total Liabilities and Shareholders' Equity $ 8,353.1     $ 7,616.7  


GATX CORPORATION AND SUBSIDIARIES
SEGMENT DATA (UNAUDITED)
Three Months Ended June 30, 2019
(In millions)
 
  Rail N.A.   Rail Int'l   Portfolio
Management
  ASC   Other   GATX
Consolidated
Revenues                      
Lease revenue $ 218.8     $ 53.9     $ 0.2     $ 1.1     $     $ 274.0  
Marine operating revenue         0.1     60.8         60.9  
Other revenue 22.4     1.8     0.3             24.5  
Total Revenues 241.2     55.7     0.6     61.9         359.4  
Expenses                      
Maintenance expense 67.0     11.2         7.5         85.7  
Marine operating expense         4.0     37.0         41.0  
Depreciation expense 64.4     14.2     1.7     3.5         83.8  
Operating lease expense 13.7                     13.7  
Other operating expense 6.4     1.3     0.1             7.8  
Total Expenses 151.5     26.7     5.8     48.0         232.0  
Other Income (Expense)                      
Net gain on asset dispositions 32.1     0.5     0.3             32.9  
Interest (expense) income, net (34.1 )   (10.1 )   (2.8 )   (1.6 )   1.5     (47.1 )
Other (expense) income (1.9 )   1.9         (0.2 )   (0.4 )   (0.6 )
Share of affiliates' pre-tax income         19.6             19.6  
Segment profit $ 85.8     $ 21.3     $ 11.9     $ 12.1     $ 1.1     $ 132.2  
Less:                      
Selling, general and administrative expense 45.1  
Income taxes (includes $3.5 related to affiliates' earnings) 19.1  
Net income $ 68.0  
Selected Data:                      
Investment volume $ 105.3     $ 73.7     $     $ 3.9     $ 1.2     $ 184.1  
Net Gain on Asset Dispositions                      
Asset Remarketing Income:                      
Net gains on disposition of owned assets $ 26.8     $     $     $     $     $ 26.8  
Residual sharing income 0.1         0.3             0.4  
Non-remarketing net gains (1) 5.2     0.5                 5.7  
  $ 32.1     $ 0.5     $ 0.3     $     $     $ 32.9  
__________
(1) Includes net gains from scrapping of railcars.


GATX CORPORATION AND SUBSIDIARIES
SEGMENT DATA (UNAUDITED)
Three Months Ended June 30, 2018
(In millions)
 
  Rail N.A.   Rail Int'l   Portfolio
Management
  ASC   Other   GATX
Consolidated
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:                      
Net gains on disposition of owned assets $ 4.2     $     $     $     $     $ 4.2  
Residual sharing income 0.3         0.3             0.6  
Non-remarketing net gains (1) 0.2     1.1                 1.3  
  $ 4.7     $ 1.1     $ 0.3     $     $     $ 6.1  
__________
(1) Includes net gains from scrapping of railcars.


GATX CORPORATION AND SUBSIDIARIES
SEGMENT DATA (UNAUDITED)
Six Months Ended June 30, 2019
(In millions)
 
  Rail N.A.   Rail Int'l   Portfolio
Management
  ASC   Other   GATX
Consolidated
Revenues                      
Lease revenue $ 439.7     $ 106.1     $ 0.5     $ 2.1     $     $ 548.4  
Marine operating revenue         2.5     71.5         74.0  
Other revenue 49.8     3.8     0.4             54.0  
Total Revenues 489.5     109.9     3.4     73.6         676.4  
Expenses                      
Maintenance expense 135.8     23.3         7.8         166.9  
Marine operating expense         8.6     44.5         53.1  
Depreciation expense 128.7     28.2     3.3     3.5         163.7  
Operating lease expense 27.4                     27.4  
Other operating expense 12.8     2.8     0.2             15.8  
Total Expenses 304.7     54.3     12.1     55.8         426.9  
Other Income (Expense)                      
Net gain on asset dispositions 40.3     0.9     0.6             41.8  
Interest (expense) income, net (68.3 )   (20.0 )   (5.5 )   (3.0 )   3.2     (93.6 )
Other expense (2.6 )   (0.4 )       (0.2 )   (0.6 )   (3.8 )
Share of affiliates' pre-tax income         37.8             37.8  
Segment profit $ 154.2     $ 36.1     $ 24.2     $ 14.6     $ 2.6     $ 231.7  
Less:                      
Selling, general and administrative expense 91.2  
Income taxes (includes $7.0 related to affiliates' earnings) 31.0  
Net income $ 109.5  
Selected Data:                      
Investment volume $ 204.3     $ 106.8     $     $ 18.4     $ 1.9     $ 331.4  
Net Gain on Asset Dispositions                      
Asset Remarketing Income:                      
Net gains on disposition of owned assets $ 36.5     $     $     $     $     $ 36.5  
Residual sharing income 0.2         0.6             0.8  
Non-remarketing net gains (1) 3.6     0.9                 4.5  
  $ 40.3     $ 0.9     $ 0.6     $     $     $ 41.8  
__________
(1) Includes net gains from scrapping of railcars.


GATX CORPORATION AND SUBSIDIARIES
SEGMENT 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:                      
Net gains on disposition of owned assets $ 54.1     $     $     $ 0.1     $     $ 54.2  
Residual sharing income 0.4         0.6             1.0  
Non-remarketing net gains (1) 4.3     2.7                 7.0  
  $ 58.8     $ 2.7     $ 0.6     $ 0.1     $     $ 62.2  
__________
(1) Includes net gains from scrapping of railcars.


GATX CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL 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
  2019   2018   2019   2018
Net income (GAAP) $ 68.0     $ 38.8     $ 109.5     $ 115.1  
               
Adjustments attributable to consolidated pre-tax income:              
Costs related to the closure of a maintenance facility at Rail International     8.6         8.6  
Total adjustments attributable to consolidated pre-tax income $     $ 8.6     $     $ 8.6  
Income taxes thereon, based on applicable effective tax rate $     $ (2.8 )   $     $ (2.8 )
               
Other income tax adjustments attributable to consolidated income:              
Income tax rate change $ (2.8 )   $     $ (2.8 )   $  
               
Net income, excluding tax adjustments and other items (non-GAAP) $ 65.2     $ 44.6     $ 106.7     $ 120.9  


Impact of Tax Adjustments and Other Items on Diluted Earnings per Share*
 
  Three Months Ended
June 30
  Six Months Ended
June 30
  2019   2018   2019   2018
Diluted earnings per share (GAAP) $ 1.86     $ 1.01     $ 2.97     $ 2.99  
Diluted earnings per share, excluding tax adjustments and other items (non-GAAP) $ 1.78     $ 1.16     $ 2.89     $ 3.14  
 
(*) In addition to financial results reported in accordance with GAAP, we compute certain financial measures using non-GAAP components. Specifically, we exclude the effects of certain tax adjustments and other items for purposes of presenting net income, diluted earnings per share, and return on equity 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 SUBSIDIARIES
SUPPLEMENTAL INFORMATION (UNAUDITED)
(In millions, except leverage)
 
    6/30/2019   3/31/2019   12/31/2018   9/30/2018   6/30/2018
Assets by Segment, as adjusted (non-GAAP)*                    
Rail North America   $ 5,607.7     $ 5,646.7     $ 5,651.0     $ 5,418.2     $ 5,409.0  
Rail International   1,404.1     1,315.6     1,309.7     1,294.5     1,266.6  
Portfolio Management   626.6     612.8     601.2     614.6     605.8  
ASC   331.2     311.1     297.7     303.4     313.6  
Other   96.6     99.4     80.6     60.7     61.1  
Total Assets, excluding cash, as adjusted (non-GAAP)   $ 8,066.2     $ 7,985.6     $ 7,940.2     $ 7,691.4     $ 7,656.1  
Debt and Lease Obligations, Net of Unrestricted Cash*                
Unrestricted cash   $ (286.6 )   $ (248.4 )   $ (100.2 )   $ (254.5 )   $ (237.4 )
Commercial paper and bank credit facilities   26.0     15.9     110.8         4.3  
Recourse debt   4,832.5     4,768.1     4,429.7     4,397.3     4,397.9  
Operating lease obligations   454.5     456.3              
Finance lease obligations   10.6     11.0     11.3     11.6     11.9  
Total debt and lease obligations, net of unrestricted cash (GAAP)   5,037.0     5,002.9     4,451.6     4,154.4     4,176.7  
Off-balance sheet recourse debt (1)           430.2     432.6     401.7  
Total debt and lease obligations, net of unrestricted cash, as adjusted (non-GAAP) (2)   $ 5,037.0     $ 5,002.9     $ 4,881.8     $ 4,587.0     $ 4,578.4  
Shareholders' Equity   $ 1,834.8     $ 1,809.2     $ 1,788.1     $ 1,838.0     $ 1,817.6  
Recourse Leverage (3)   2.7     2.8     2.7     2.5     2.5  
__________
(1) Under the new lease accounting standard, off-balance sheet recourse debt is no longer applicable beginning in 2019.
(2) Includes on- and off-balance sheet debt, commercial paper and bank credit facilities, and operating and finance lease obligations, net of unrestricted cash.
(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   $ 8,353.1     $ 8,240.2     $ 7,616.7     $ 7,517.4     $ 7,495.5  
Less: cash   (286.9 )   (254.6 )   (106.7 )   (258.6 )   (241.1 )
Total Assets, excluding cash (GAAP)   8,066.2     7,985.6     7,510.0     7,258.8     7,254.4  
Add off-balance sheet assets:                    
Rail North America           430.2     432.6     401.7  
Total Assets, excluding cash, as adjusted (non-GAAP)   $ 8,066.2     $ 7,985.6     $ 7,940.2     $ 7,691.4     $ 7,656.1  
 
(*) A portion of our North American railcar fleet is financed through sale-leasebacks that are accounted for as operating leases. Prior to 2019, these railcar assets were not recorded on the balance sheet. Under the new lease accounting standard adopted on January 1, 2019, GATX records these railcar operating leases on the balance sheet as right-of-use assets with corresponding amounts for operating lease liabilities. Prior to 2019, we reported total on- and off-balance sheet assets in our calculation of total assets (as adjusted) because we believed it provided investors a more comprehensive representation of the magnitude of the assets we operated and that drove our financial performance. In addition, this calculation of total assets (as adjusted) provided consistency with other non-financial information we disclosed about our fleet, including the number of railcars in the fleet, average number of cars on lease, and utilization. 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 was the equivalent of the off-balance sheet asset amount. We believe reporting this corresponding off-balance sheet debt amount provided investors and other users of our financial statements with a more comprehensive representation of our debt obligations, leverage, and capital structure.


GATX CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION (UNAUDITED)
(Continued)
 
  6/30/2019   3/31/2019   12/31/2018   9/30/2018   6/30/2018
Rail North America Statistics                  
Lease Price Index (LPI) (1)                  
Average renewal lease rate change (2.8 )%   5.2 %   (0.9 )%   (11.5 )%   (16.1 )%
Average renewal term (months) 53     39     43     33     41  
Fleet Rollforward (2)                  
Beginning balance 104,830     105,472     103,420     102,890     102,597  
Cars added 661     617     3,120     1,381     1,231  
Cars scrapped (377 )   (662 )   (387 )   (431 )   (720 )
Cars sold (1,560 )   (597 )   (681 )   (420 )   (218 )
Ending balance 103,554     104,830     105,472     103,420     102,890  
Utilization 99.5 %   99.4 %   99.4 %   99.2 %   98.9 %
Average active railcars 104,089     104,613     103,387     102,056     101,330  
Boxcar Fleet                  
Ending balance 15,921     16,006     16,220     15,859     16,007  
Utilization 94.1 %   95.2 %   94.2 %   94.7 %   92.8 %
Rail Europe Statistics                  
Fleet Rollforward                  
Beginning balance 23,531     23,412     23,234     23,124     23,004  
Cars added 491     185     281     258     245  
Cars scrapped/sold (55 )   (66 )   (103 )   (148 )   (125 )
Ending balance 23,967     23,531     23,412     23,234     23,124  
Utilization 98.9 %   98.9 %   98.8 %   98.4 %   97.8 %
Average active railcars 23,480     23,105     22,949     22,759     22,407  
Rail North America Industry Statistics                  
Manufacturing Capacity Utilization Index (3) 77.9 %   78.4 %   79.5 %   78.4 %   77.8 %
Year-over-year Change in U.S. Carloadings (excl. intermodal) (4) (2.9 )%   (3.1 )%   1.8 %   2.0 %   1.3 %
Year-over-year Change in U.S. Carloadings (chemical) (4) (0.1 )%   (1.0 )%   3.8 %   4.5 %   3.8 %
Year-over-year Change in U.S. Carloadings (petroleum) (4) 23.2 %   22.0 %   18.2 %   14.7 %   6.8 %
Production Backlog at Railcar Manufacturers (5) n/a (6 )   73,076     80,223     73,812     65,161  
American Steamship Company Statistics                  
Total Net Tons Carried (millions) 8.7     1.2     8.5     8.7     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. GATX calculates the index 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.
 

gatx_corp_logo_only_pms647.jpg

View Comments and Join the Discussion!