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| New York | 1-2328 | 36-1124040 | ||||||||||||
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
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☐ |
Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||
☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||||
☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||||
☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | ||||
| Title of each class | Trading Symbol(s) | Name of Each Exchange on Which Registered | ||||||
| Common Stock | GATX | New York Stock Exchange | ||||||
| Chicago Stock Exchange | ||||||||
| Exhibit No. | Description | |||||||
| 99.1 | ||||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |||||||
| GATX CORPORATION | ||
| (Registrant) | ||
| /s/ Thomas A. Ellman | ||
| Thomas A. Ellman | ||
| Executive Vice President and Chief Financial Officer | ||
|
•a significant decline in customer demand for our transportation assets or services, including as a result of:
◦prolonged inflation or deflation
◦high interest rates
◦weak macroeconomic conditions and world trade policies
◦weak market conditions in our customers' businesses
◦adverse changes in the price of, or demand for, commodities
◦changes in railroad operations, efficiency, pricing and service offerings, including those related to "precision scheduled railroading" or labor strikes or shortages
◦changes in, or disruptions to, supply chains
◦availability of pipelines, trucks, and other alternative modes of transportation
◦changes in conditions affecting the aviation industry, including global conflicts, geographic exposure and customer concentrations
◦customers' desire to buy, rather than lease, our transportation assets
◦other operational or commercial needs or decisions of our customers
•inability to maintain our transportation assets on lease at satisfactory rates due to oversupply of assets in the market or other changes in supply and demand
•competitive factors in our primary markets, including competitors with significantly lower costs of capital
•higher costs associated with increased assignments of our transportation assets 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 purchase commitments for transportation assets
•reduced opportunities to generate asset remarketing income
•inability to successfully consummate and manage ongoing acquisition and divestiture activities
•reliance on Rolls-Royce in connection with our aircraft spare engine leasing businesses, and the risks that certain factors that adversely affect Rolls-Royce could have an adverse effect on our businesses
•potential obsolescence of our assets
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•risks related to our international operations and expansion into new geographic markets, including laws, regulations, tariffs, taxes, treaties or trade barriers affecting our activities in the countries where we do business
•failure to successfully negotiate collective bargaining agreements with the unions representing a substantial portion of our employees
•inability to attract, retain, and motivate qualified personnel, including key management personnel
•inability to maintain and secure our information technology infrastructure from cybersecurity threats and related disruption of our business
•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 transportation assets
•changes in, or failure to comply with, laws, rules, and regulations
•environmental liabilities and remediation costs
•operational, functional and regulatory risks associated with climate change, severe weather events and natural disasters, and other environmental, social and governance matters
•U.S. and global political conditions and the impact of increased geopolitical tension and wars, including the ongoing war between Russia and Ukraine and resulting sanctions and countermeasures, on domestic and global economic conditions in general, including supply chain challenges and disruptions
•prolonged inflation or deflation
•fluctuations in foreign exchange rates
•deterioration of conditions in the capital markets, reductions in our credit ratings, or increases in our financing costs
•the emergence of new variants of COVID-19 or the occurrence of another widespread health crisis and the impact of measures taken in response
•inability to obtain cost-effective insurance
•changes in assumptions, increases in funding requirements or investment losses in our pension and post-retirement plans
•inadequate allowances to cover credit losses in our portfolio
•asset impairment charges we may be required to recognize
•inability to maintain effective internal control over financial reporting and disclosure controls and procedures
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|||||||
| Three Months Ended March 31 |
|||||||||||
| 2024 | 2023 | ||||||||||
Revenues |
|||||||||||
Lease revenue |
$ | 333.3 | $ | 302.0 | |||||||
Non-dedicated engine revenue |
13.2 | 4.5 | |||||||||
Marine operating revenue |
— | 3.5 | |||||||||
Other revenue |
33.4 | 28.9 | |||||||||
Total Revenues |
379.9 | 338.9 | |||||||||
Expenses |
|||||||||||
Maintenance expense |
91.4 | 83.9 | |||||||||
Marine operating expense |
— | 2.0 | |||||||||
Depreciation expense |
96.0 | 89.8 | |||||||||
Operating lease expense |
9.0 | 9.0 | |||||||||
Other operating expense |
13.6 | 11.0 | |||||||||
Selling, general and administrative expense |
55.9 | 50.4 | |||||||||
Total Expenses |
265.9 | 246.1 | |||||||||
Other Income (Expense) |
|||||||||||
Net gain on asset dispositions |
36.2 | 47.1 | |||||||||
Interest expense, net |
(77.8) | (59.0) | |||||||||
Other income (expense) |
0.8 | (4.0) | |||||||||
Income before Income Taxes and Share of Affiliates’ Earnings |
73.2 | 76.9 | |||||||||
Income taxes |
(18.6) | (20.2) | |||||||||
Share of affiliates’ earnings, net of taxes |
19.7 | 20.7 | |||||||||
Net Income |
$ | 74.3 | $ | 77.4 | |||||||
Share Data |
|||||||||||
Basic earnings per share |
$ | 2.04 | $ | 2.19 | |||||||
Average number of common shares |
35.8 | 35.3 | |||||||||
Diluted earnings per share |
$ | 2.03 | $ | 2.16 | |||||||
Average number of common shares and common share equivalents |
35.9 | 35.8 | |||||||||
Dividends declared per common share |
$ | 0.58 | $ | 0.55 | |||||||
| March 31 | December 31 | ||||||||||
| 2024 | 2023 | ||||||||||
Assets |
|||||||||||
Cash and Cash Equivalents |
$ | 479.1 | $ | 450.7 | |||||||
Restricted Cash |
0.1 | 0.1 | |||||||||
Receivables |
|||||||||||
Rent and other receivables |
96.3 | 87.9 | |||||||||
Finance leases (as lessor) |
137.3 | 136.4 | |||||||||
Less: allowance for losses |
(6.1) | (5.9) | |||||||||
| 227.5 | 218.4 | ||||||||||
Operating Assets and Facilities |
13,320.1 | 13,081.9 | |||||||||
Less: allowance for depreciation |
(3,700.3) | (3,670.7) | |||||||||
| 9,619.8 | 9,411.2 | ||||||||||
Lease Assets (as lessee) |
|||||||||||
Right-of-use assets, net of accumulated depreciation |
203.5 | 212.0 | |||||||||
| 203.5 | 212.0 | ||||||||||
Investments in Affiliated Companies |
647.6 | 627.0 | |||||||||
Goodwill |
118.0 | 120.0 | |||||||||
Other Assets ($1.8 and $0.8 related to assets held for sale) |
283.5 | 286.6 | |||||||||
Total Assets |
$ | 11,579.1 | $ | 11,326.0 | |||||||
Liabilities and Shareholders’ Equity |
|||||||||||
Accounts Payable and Accrued Expenses |
$ | 208.2 | $ | 239.6 | |||||||
Debt |
|||||||||||
Commercial paper and borrowings under bank credit facilities |
10.8 | 11.0 | |||||||||
Recourse |
7,624.5 | 7,388.1 | |||||||||
| 7,635.3 | 7,399.1 | ||||||||||
Lease Obligations (as lessee) |
|||||||||||
Operating leases |
215.2 | 226.8 | |||||||||
| 215.2 | 226.8 | ||||||||||
Deferred Income Taxes |
1,096.2 | 1,081.1 | |||||||||
Other Liabilities |
99.9 | 106.4 | |||||||||
Total Liabilities |
9,254.8 | 9,053.0 | |||||||||
Total Shareholders’ Equity |
2,324.3 | 2,273.0 | |||||||||
Total Liabilities and Shareholders’ Equity |
$ | 11,579.1 | $ | 11,326.0 | |||||||
|
Rail North America |
Rail International |
Engine Leasing | Other | GATX Consolidated | |||||||||||||||||||||||||
Revenues |
|||||||||||||||||||||||||||||
Lease revenue |
$ | 236.5 | $ | 80.6 | $ | 8.1 | $ | 8.1 | $ | 333.3 | |||||||||||||||||||
Non-dedicated engine revenue |
— | — | 13.2 | — | 13.2 | ||||||||||||||||||||||||
Other revenue |
28.5 | 3.1 | — | 1.8 | 33.4 | ||||||||||||||||||||||||
Total Revenues |
265.0 | 83.7 | 21.3 | 9.9 | 379.9 | ||||||||||||||||||||||||
| Expenses | |||||||||||||||||||||||||||||
Maintenance expense |
72.9 | 17.5 | — | 1.0 | 91.4 | ||||||||||||||||||||||||
Depreciation expense |
65.1 | 18.9 | 8.4 | 3.6 | 96.0 | ||||||||||||||||||||||||
Operating lease expense |
9.0 | — | — | — | 9.0 | ||||||||||||||||||||||||
Other operating expense |
6.7 | 3.5 | 2.5 | 0.9 | 13.6 | ||||||||||||||||||||||||
Total Expenses |
153.7 | 39.9 | 10.9 | 5.5 | 210.0 | ||||||||||||||||||||||||
Other Income (Expense) |
|||||||||||||||||||||||||||||
Net gain on asset dispositions |
34.2 | 1.3 | 0.6 | 0.1 | 36.2 | ||||||||||||||||||||||||
Interest (expense) income, net |
(53.3) | (16.7) | (9.3) | 1.5 | (77.8) | ||||||||||||||||||||||||
Other (expense) income |
(2.1) | 0.4 | 0.3 | 2.2 | 0.8 | ||||||||||||||||||||||||
Share of affiliates' pre-tax earnings |
0.2 | — | 23.7 | — | 23.9 | ||||||||||||||||||||||||
| Segment profit | $ | 90.3 | $ | 28.8 | $ | 25.7 | $ | 8.2 | $ | 153.0 | |||||||||||||||||||
Less: |
|||||||||||||||||||||||||||||
Selling, general and administrative expense |
55.9 | ||||||||||||||||||||||||||||
Income taxes (includes $4.2 related to affiliates' earnings) |
22.8 | ||||||||||||||||||||||||||||
Net income |
$ | 74.3 | |||||||||||||||||||||||||||
Selected Data: |
|||||||||||||||||||||||||||||
Investment volume |
$ | 321.7 | $ | 49.9 | $ | — | $ | 7.0 | $ | 378.6 | |||||||||||||||||||
Net Gain on Asset Dispositions |
|||||||||||||||||||||||||||||
Asset Remarketing Income: |
|||||||||||||||||||||||||||||
Net gains on disposition of owned assets |
$ | 32.9 | $ | 0.1 | $ | 0.6 | $ | 0.1 | $ | 33.7 | |||||||||||||||||||
Residual sharing income |
0.1 | — | — | — | 0.1 | ||||||||||||||||||||||||
Non-remarketing net gains (1) |
1.2 | 1.2 | — | — | 2.4 | ||||||||||||||||||||||||
| $ | 34.2 | $ | 1.3 | $ | 0.6 | $ | 0.1 | $ | 36.2 | ||||||||||||||||||||
|
Rail North America |
Rail International |
Engine Leasing | Other | GATX Consolidated | |||||||||||||||||||||||||
Revenues |
|||||||||||||||||||||||||||||
Lease revenue |
$ | 215.1 | $ | 70.4 | $ | 8.3 | $ | 8.2 | $ | 302.0 | |||||||||||||||||||
Non-dedicated engine revenue |
— | — | 4.5 | — | 4.5 | ||||||||||||||||||||||||
Marine operating revenue |
— | — | 3.5 | — | 3.5 | ||||||||||||||||||||||||
Other revenue |
23.8 | 2.9 | — | 2.2 | 28.9 | ||||||||||||||||||||||||
Total Revenues |
238.9 | 73.3 | 16.3 | 10.4 | 338.9 | ||||||||||||||||||||||||
| Expenses | |||||||||||||||||||||||||||||
Maintenance expense |
66.9 | 15.9 | — | 1.1 | 83.9 | ||||||||||||||||||||||||
Marine operating expense |
— | — | 2.0 | — | 2.0 | ||||||||||||||||||||||||
Depreciation expense |
65.5 | 15.7 | 5.4 | 3.2 | 89.8 | ||||||||||||||||||||||||
Operating lease expense |
9.0 | — | — | — | 9.0 | ||||||||||||||||||||||||
Other operating expense |
7.0 | 2.2 | 0.9 | 0.9 | 11.0 | ||||||||||||||||||||||||
Total Expenses |
148.4 | 33.8 | 8.3 | 5.2 | 195.7 | ||||||||||||||||||||||||
Other Income (Expense) |
|||||||||||||||||||||||||||||
Net gain (loss) on asset dispositions |
47.8 | 0.8 | (1.5) | — | 47.1 | ||||||||||||||||||||||||
Interest (expense) income, net |
(42.3) | (12.5) | (5.7) | 1.5 | (59.0) | ||||||||||||||||||||||||
Other (expense) income |
(0.4) | (4.3) | (0.5) | 1.2 | (4.0) | ||||||||||||||||||||||||
Share of affiliates' pre-tax (losses) earnings |
(0.4) | — | 28.0 | — | 27.6 | ||||||||||||||||||||||||
Segment profit |
$ | 95.2 | $ | 23.5 | $ | 28.3 | $ | 7.9 | $ | 154.9 | |||||||||||||||||||
Less: |
|||||||||||||||||||||||||||||
Selling, general and administrative expense |
50.4 | ||||||||||||||||||||||||||||
Income taxes (includes $6.9 related to affiliates' earnings) |
27.1 | ||||||||||||||||||||||||||||
Net income |
$ | 77.4 | |||||||||||||||||||||||||||
Selected Data: |
|||||||||||||||||||||||||||||
Investment volume |
$ | 296.5 | $ | 81.1 | $ | — | $ | 9.4 | $ | 387.0 | |||||||||||||||||||
Net Gain (Loss) on Asset Dispositions |
|||||||||||||||||||||||||||||
Asset Remarketing Income: |
|||||||||||||||||||||||||||||
Net gains (losses) on disposition of owned assets |
$ | 44.7 | $ | 0.4 | $ | (0.4) | $ | — | $ | 44.7 | |||||||||||||||||||
Residual sharing income |
0.1 | — | 0.1 | — | 0.2 | ||||||||||||||||||||||||
Non-remarketing net gains (1) |
3.0 | 0.4 | — | — | 3.4 | ||||||||||||||||||||||||
Asset impairments |
— | — | (1.2) | — | (1.2) | ||||||||||||||||||||||||
| $ | 47.8 | $ | 0.8 | $ | (1.5) | $ | — | $ | 47.1 | ||||||||||||||||||||
| Three Months Ended March 31 |
|||||||||||
| 2024 | 2023 | ||||||||||
| Net income (GAAP) | $ | 74.3 | $ | 77.4 | |||||||
| Adjustments attributable to consolidated pre-tax income: | |||||||||||
| (Gain) loss on Specialized Gas Vessels at Engine Leasing (2) | $ | (0.6) | $ | 1.6 | |||||||
| Net gain on Rail Russia at Rail International (3) | — | (0.3) | |||||||||
| Total adjustments attributable to consolidated pre-tax income | $ | (0.6) | $ | 1.3 | |||||||
| Net income, excluding tax adjustments and other items (non-GAAP) | $ | 73.7 | $ | 78.7 | |||||||
| Three Months Ended March 31 |
|||||||||||
| 2024 | 2023 | ||||||||||
| Diluted earnings per share (GAAP) | $ | 2.03 | $ | 2.16 | |||||||
| Diluted earnings per share, excluding tax adjustments and other items (non-GAAP) | $ | 2.01 | $ | 2.20 | |||||||
| 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | ||||||||||||||||||||||||||||
| Total Assets, Excluding Cash, by Segment | ||||||||||||||||||||||||||||||||
| Rail North America | $ | 7,214.1 | $ | 6,984.9 | $ | 6,760.5 | $ | 6,671.3 | $ | 6,610.8 | ||||||||||||||||||||||
| Rail International | 2,142.1 | 2,150.8 | 1,951.5 | 1,902.3 | 1,801.2 | |||||||||||||||||||||||||||
| Engine Leasing | 1,354.4 | 1,343.2 | 1,363.8 | 1,328.6 | 1,089.6 | |||||||||||||||||||||||||||
| Other | 389.3 | 396.3 | 368.5 | 370.2 | 368.9 | |||||||||||||||||||||||||||
| Total Assets, excluding cash | $ | 11,099.9 | $ | 10,875.2 | $ | 10,444.3 | $ | 10,272.4 | $ | 9,870.5 | ||||||||||||||||||||||
| Debt and Lease Obligations, Net of Unrestricted Cash | ||||||||||||||||||||||||||||||||
| Unrestricted cash | $ | (479.1) | $ | (450.7) | $ | (203.1) | $ | (317.5) | $ | (177.4) | ||||||||||||||||||||||
| Commercial paper and bank credit facilities | 10.8 | 11.0 | 12.3 | 10.9 | 20.3 | |||||||||||||||||||||||||||
| Recourse debt | 7,624.5 | 7,388.1 | 6,835.6 | 6,785.6 | 6,360.9 | |||||||||||||||||||||||||||
| Operating lease obligations | 215.2 | 226.8 | 233.2 | 241.1 | 246.2 | |||||||||||||||||||||||||||
| Total debt and lease obligations, net of unrestricted cash | $ | 7,371.4 | $ | 7,175.2 | $ | 6,878.0 | $ | 6,720.1 | $ | 6,450.0 | ||||||||||||||||||||||
| Total recourse debt (1) | $ | 7,371.4 | $ | 7,175.2 | $ | 6,878.0 | $ | 6,720.1 | $ | 6,450.0 | ||||||||||||||||||||||
| Shareholders’ Equity | $ | 2,324.3 | $ | 2,273.0 | $ | 2,174.5 | $ | 2,178.9 | $ | 2,101.5 | ||||||||||||||||||||||
| Recourse Leverage (2) | 3.2 | 3.2 | 3.2 | 3.1 | 3.1 | |||||||||||||||||||||||||||
| Reconciliation of Total Assets to Total Assets, Excluding Cash | ||||||||||||||||||||||||||||||||
| Total Assets | $ | 11,579.1 | $ | 11,326.0 | $ | 10,647.5 | $ | 10,590.1 | $ | 10,048.1 | ||||||||||||||||||||||
| Less: cash | (479.2) | (450.8) | (203.2) | (317.7) | (177.6) | |||||||||||||||||||||||||||
| Total Assets, excluding cash | $ | 11,099.9 | $ | 10,875.2 | $ | 10,444.3 | $ | 10,272.4 | $ | 9,870.5 | ||||||||||||||||||||||
| 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | |||||||||||||||||||||||||
| Rail North America Statistics | |||||||||||||||||||||||||||||
| Lease Price Index (LPI) (1) | |||||||||||||||||||||||||||||
| Average renewal lease rate change | 33.0 | % | 33.5 | % | 33.4 | % | 33.1 | % | 28.3 | % | |||||||||||||||||||
| Average renewal term (months) | 64 | 65 | 65 | 61 | 55 | ||||||||||||||||||||||||
| Renewal Success Rate (2) | 83.4 | % | 87.1 | % | 83.6 | % | 85.3 | % | 77.9 | % | |||||||||||||||||||
| Fleet Rollforward (3) | |||||||||||||||||||||||||||||
| Beginning balance | 101,167 | 100,656 | 100,585 | 101,219 | 100,954 | ||||||||||||||||||||||||
| Railcars added | 1,422 | 1,688 | 791 | 358 | 1,816 | ||||||||||||||||||||||||
| Railcars scrapped | (375) | (354) | (292) | (316) | (324) | ||||||||||||||||||||||||
| Railcars sold | (527) | (823) | (428) | (676) | (1,227) | ||||||||||||||||||||||||
| Ending balance | 101,687 | 101,167 | 100,656 | 100,585 | 101,219 | ||||||||||||||||||||||||
| Utilization | 99.4 | % | 99.3 | % | 99.3 | % | 99.3 | % | 99.3 | % | |||||||||||||||||||
| Average active railcars | 100,677 | 100,197 | 99,796 | 100,230 | 100,552 | ||||||||||||||||||||||||
| Boxcar Fleet Rollforward | |||||||||||||||||||||||||||||
| Beginning balance | 9,311 | 9,087 | 8,959 | 8,789 | 8,663 | ||||||||||||||||||||||||
| Boxcars added | 587 | 424 | 316 | 279 | 229 | ||||||||||||||||||||||||
| Boxcars scrapped | (228) | (152) | (95) | (109) | (103) | ||||||||||||||||||||||||
| Boxcars sold | — | (48) | (93) | — | — | ||||||||||||||||||||||||
| Ending balance | 9,670 | 9,311 | 9,087 | 8,959 | 8,789 | ||||||||||||||||||||||||
| Utilization | 99.8 | % | 100.0 | % | 99.7 | % | 99.8 | % | 100.0 | % | |||||||||||||||||||
| Average active railcars | 9,583 | 9,207 | 8,985 | 8,855 | 8,720 | ||||||||||||||||||||||||
| Rail North America Industry Statistics | |||||||||||||||||||||||||||||
| Manufacturing Capacity Utilization Index (4) | 78.4 | % | 78.7 | % | 79.5 | % | 78.9 | % | 79.5 | % | |||||||||||||||||||
| Year-over-year Change in U.S. Carloadings (excl. intermodal) (5) | (4.2) | % | 0.7 | % | 30.0 | % | 0.6 | % | (0.3) | % | |||||||||||||||||||
| Year-over-year Change in U.S. Carloadings (chemical) (5) | 4.5 | % | (0.3) | % | (2.6) | % | (4.5) | % | (6.8) | % | |||||||||||||||||||
| Year-over-year Change in U.S. Carloadings (petroleum) (5) | 7.7 | % | 11.1 | % | 10.5 | % | 9.6 | % | 12.3 | % | |||||||||||||||||||
| Production Backlog at Railcar Manufacturers (6) | n/a (7) | 51,836 | 58,680 | 59,878 | 56,062 | ||||||||||||||||||||||||
| 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | |||||||||||||||||||||||||
| Rail Europe Statistics | |||||||||||||||||||||||||||||
| Fleet Rollforward | |||||||||||||||||||||||||||||
| Beginning balance | 29,216 | 29,102 | 28,759 | 28,461 | 28,005 | ||||||||||||||||||||||||
| Railcars added | 322 | 371 | 446 | 376 | 502 | ||||||||||||||||||||||||
| Railcars scrapped/sold | (167) | (257) | (103) | (78) | (46) | ||||||||||||||||||||||||
| Ending balance | 29,371 | 29,216 | 29,102 | 28,759 | 28,461 | ||||||||||||||||||||||||
| Utilization | 95.3 | % | 95.9 | % | 96.0 | % | 96.9 | % | 98.5 | % | |||||||||||||||||||
| Average active railcars | 27,984 | 28,003 | 27,884 | 27,973 | 27,931 | ||||||||||||||||||||||||
| Rail India Statistics | |||||||||||||||||||||||||||||
| Fleet Rollforward | |||||||||||||||||||||||||||||
| Beginning balance | 8,805 | 7,884 | 6,927 | 6,351 | 5,872 | ||||||||||||||||||||||||
| Railcars added | 696 | 921 | 957 | 576 | 479 | ||||||||||||||||||||||||
| Ending balance | 9,501 | 8,805 | 7,884 | 6,927 | 6,351 | ||||||||||||||||||||||||
| Utilization | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||||||
| Average active railcars | 9,089 | 8,321 | 7,366 | 6,584 | 6,038 | ||||||||||||||||||||||||