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GATX Corporation Reports 2020 First-Quarter Results
- Net income for the first quarter 2020 was
$46.3 million or$1.31 per diluted share - GATX suspends 2020 guidance due to uncertainties related to the COVID-19 pandemic
- Rail North America’s fleet utilization remained strong at 99.0%
“GATX posted solid first-quarter results despite continuing weakness in the North American railcar leasing market and a deteriorating global economy,” said
“Rail North America’s performance in the quarter was generally consistent with our expectations coming into 2020. We achieved fleet utilization of 99% at the end of the quarter and a renewal success rate of 74.6%. The renewal lease rate change of GATX’s Lease Price Index was negative 11.6% in the quarter, with an average renewal term of 31 months.
“Rail International performed as expected. Fleet utilization at GATX Rail Europe remains high at 98.5% at quarter end, and GATX Rail India grew its fleet to over 3,900 railcars while maintaining utilization at 100%. Within Portfolio Management, our
RAIL
At
Fleet utilization was 99.0% at the end of the first quarter, compared to 99.3% at the end of the prior quarter and 99.4% at the end of the first quarter of 2019. During the first quarter, the renewal lease rate change of the GATX Lease Price Index (LPI) was negative 11.6%. This compares to negative 9.1% in the prior quarter and positive 5.2% in the first quarter of 2019. The average lease renewal term for all cars included in the LPI during the first quarter was 31 months, compared to 37 months in the prior quarter and 39 months in the first quarter of 2019. Rail North America’s investment volume during the first quarter was
Additional fleet statistics, including information on 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
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PORTFOLIO MANAGEMENT
Portfolio Management reported segment profit of
On
COMPANY DESCRIPTION
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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
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FOR FURTHER INFORMATION CONTACT:
Director, Investor Relations
312-621-4285
shari.hellerman@gatx.com
Investor, corporate, financial, historical financial, and news release information may be found at www.gatx.com.
(5/4/2020)
GATX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In millions, except per share data)
Three Months Ended |
|||||||
2020 | 2019 | ||||||
Revenues | |||||||
Lease revenue | $ | 271.7 | $ | 274.4 | |||
Marine operating revenue | 11.8 | 13.1 | |||||
Other revenue | 25.4 | 29.5 | |||||
Total Revenues | 308.9 | 317.0 | |||||
Expenses | |||||||
Maintenance expense | 86.6 | 81.2 | |||||
Marine operating expense | 10.4 | 12.1 | |||||
Depreciation expense | 80.4 | 79.9 | |||||
Operating lease expense | 13.3 | 13.7 | |||||
Other operating expense | 8.5 | 8.0 | |||||
Selling, general and administrative expense | 42.4 | 46.1 | |||||
Total Expenses | 241.6 | 241.0 | |||||
Other Income (Expense) | |||||||
Net gain on asset dispositions | 27.4 | 8.9 | |||||
Interest expense, net | (46.8 | ) | (46.5 | ) | |||
Other expense | (8.2 | ) | (3.2 | ) | |||
Income before Income Taxes and Share of Affiliates’ Earnings | 39.7 | 35.2 | |||||
Income taxes | (12.9 | ) | (8.4 | ) | |||
Share of affiliates’ earnings, net of taxes | 19.5 | 14.7 | |||||
Net Income | $ | 46.3 | $ | 41.5 | |||
Share Data | |||||||
Basic earnings per share | $ | 1.33 | $ | 1.14 | |||
Average number of common shares | 34.9 | 36.5 | |||||
Diluted earnings per share | $ | 1.31 | $ | 1.12 | |||
Average number of common shares and common share equivalents | 35.4 | 37.1 | |||||
Dividends declared per common share | $ | 0.48 | $ | 0.46 |
GATX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In millions)
2020 | 2019 | ||||||
Assets | |||||||
Cash and Cash Equivalents | $ | 570.7 | $ | 151.0 | |||
Receivables | |||||||
Rent and other receivables | 76.9 | 87.1 | |||||
Finance leases (as lessor) | 66.8 | 90.3 | |||||
Less: allowance for losses | (6.2 | ) | (6.2 | ) | |||
137.5 | 171.2 | ||||||
Operating Assets and Facilities | 9,972.5 | 9,897.4 | |||||
Less: allowance for depreciation | (3,222.1 | ) | (3,190.2 | ) | |||
6,750.4 | 6,707.2 | ||||||
Lease Assets (as lessee) | |||||||
Right of use assets, net of accumulated depreciation | 402.8 | 413.9 | |||||
Finance leases, net of accumulated depreciation | — | 8.9 | |||||
402.8 | 422.8 | ||||||
Investments in Affiliated Companies | 532.4 | 512.6 | |||||
80.6 | 81.5 | ||||||
Other Assets | 243.5 | 238.8 | |||||
Total Assets | $ | 8,717.9 | $ | 8,285.1 | |||
Liabilities and Shareholders’ Equity | |||||||
Accounts Payable and Accrued Expenses | $ | 120.6 | $ | 149.1 | |||
Debt | |||||||
Commercial paper and borrowings under bank credit facilities | 275.5 | 15.8 | |||||
Recourse | 5,043.7 | 4,780.4 | |||||
5,319.2 | 4,796.2 | ||||||
Lease Obligations (as lessee) | |||||||
Operating leases | 399.3 | 432.3 | |||||
Finance leases | — | 7.9 | |||||
399.3 | 440.2 | ||||||
Deferred Income Taxes | 930.2 | 924.3 | |||||
Other Liabilities | 117.6 | 140.2 | |||||
Total Liabilities | 6,886.9 | 6,450.0 | |||||
Total Shareholders’ Equity | 1,831.0 | 1,835.1 | |||||
Total Liabilities and Shareholders’ Equity | $ | 8,717.9 | $ | 8,285.1 |
GATX CORPORATION AND SUBSIDIARIES
SEGMENT DATA (UNAUDITED)
Three Months Ended
(In millions)
Rail N.A. | Rail Int’l | Portfolio Management |
ASC | Other | GATX Consolidated |
||||||||||||||||||
Revenues | |||||||||||||||||||||||
Lease revenue | $ | 212.1 | $ | 58.3 | $ | 0.3 | $ | 1.0 | $ | — | $ | 271.7 | |||||||||||
Marine operating revenue | — | — | 3.3 | 8.5 | — | 11.8 | |||||||||||||||||
Other revenue | 23.6 | 1.8 | — | — | — | 25.4 | |||||||||||||||||
Total Revenues | 235.7 | 60.1 | 3.6 | 9.5 | — | 308.9 | |||||||||||||||||
Expenses | |||||||||||||||||||||||
Maintenance expense | 72.9 | 12.9 | — | 0.8 | — | 86.6 | |||||||||||||||||
Marine operating expense | — | — | 4.1 | 6.3 | — | 10.4 | |||||||||||||||||
Depreciation expense | 63.6 | 15.5 | 1.3 | — | — | 80.4 | |||||||||||||||||
Operating lease expense | 13.3 | — | — | — | — | 13.3 | |||||||||||||||||
Other operating expense | 6.6 | 1.8 | 0.1 | — | — | 8.5 | |||||||||||||||||
Total Expenses | 156.4 | 30.2 | 5.5 | 7.1 | — | 199.2 | |||||||||||||||||
Other Income (Expense) | |||||||||||||||||||||||
Net gain on asset dispositions | 26.8 | 0.1 | 0.5 | — | — | 27.4 | |||||||||||||||||
Interest (expense) income, net | (33.3 | ) | (10.6 | ) | (2.9 | ) | (1.3 | ) | 1.3 | (46.8 | ) | ||||||||||||
Other expense | (0.8 | ) | (5.5 | ) | — | (0.2 | ) | (1.7 | ) | (8.2 | ) | ||||||||||||
Share of affiliates’ pre-tax income | — | — | 23.8 | — | — | 23.8 | |||||||||||||||||
Segment profit (loss) | $ | 72.0 | $ | 13.9 | $ | 19.5 | $ | 0.9 | $ | (0.4 | ) | $ | 105.9 | ||||||||||
Less: | |||||||||||||||||||||||
Selling, general and administrative expense | 42.4 | ||||||||||||||||||||||
Income taxes (includes |
17.2 | ||||||||||||||||||||||
Net income | $ | 46.3 | |||||||||||||||||||||
Selected Data: | |||||||||||||||||||||||
Investment volume | $ | 110.9 | $ | 69.3 | $ | 0.3 | $ | 13.7 | $ | 0.5 | $ | 194.7 | |||||||||||
Asset Remarketing Income: | |||||||||||||||||||||||
Net gains on disposition of owned assets | $ | 26.9 | $ | — | $ | — | $ | — | $ | — | $ | 26.9 | |||||||||||
Residual sharing income | 0.1 | — | 0.5 | — | — | 0.6 | |||||||||||||||||
Non-remarketing disposition (losses) gains (1) | (0.2 | ) | 0.1 | — | — | — | (0.1 | ) | |||||||||||||||
$ | 26.8 | $ | 0.1 | $ | 0.5 | $ | — | $ | — | $ | 27.4 |
__________
(1) Includes net gains (losses) from scrapping of railcars.
GATX CORPORATION AND SUBSIDIARIES
SEGMENT DATA (UNAUDITED)
Three Months Ended
(In millions)
Rail N.A. | Rail Int’l | Portfolio Management |
ASC | Other | GATX Consolidated |
||||||||||||||||||
Revenues | |||||||||||||||||||||||
Lease revenue | $ | 220.9 | $ | 52.2 | $ | 0.3 | $ | 1.0 | $ | — | $ | 274.4 | |||||||||||
Marine operating revenue | — | — | 2.4 | 10.7 | — | 13.1 | |||||||||||||||||
Other revenue | 27.4 | 2.0 | 0.1 | — | — | 29.5 | |||||||||||||||||
Total Revenues | 248.3 | 54.2 | 2.8 | 11.7 | — | 317.0 | |||||||||||||||||
Expenses | |||||||||||||||||||||||
Maintenance expense | 68.8 | 12.1 | — | 0.3 | — | 81.2 | |||||||||||||||||
Marine operating expense | — | — | 4.6 | 7.5 | — | 12.1 | |||||||||||||||||
Depreciation expense | 64.3 | 14.0 | 1.6 | — | — | 79.9 | |||||||||||||||||
Operating lease expense | 13.7 | — | — | — | — | 13.7 | |||||||||||||||||
Other operating expense | 6.4 | 1.5 | 0.1 | — | — | 8.0 | |||||||||||||||||
Total Expenses | 153.2 | 27.6 | 6.3 | 7.8 | — | 194.9 | |||||||||||||||||
Other Income (Expense) | |||||||||||||||||||||||
Net gain on asset dispositions | 8.2 | 0.4 | 0.3 | — | — | 8.9 | |||||||||||||||||
Interest (expense) income, net | (34.2 | ) | (9.9 | ) | (2.7 | ) | (1.4 | ) | 1.7 | (46.5 | ) | ||||||||||||
Other expense | (0.7 | ) | (2.3 | ) | — | — | (0.2 | ) | (3.2 | ) | |||||||||||||
Share of affiliates’ pre-tax income | — | — | 18.2 | — | — | 18.2 | |||||||||||||||||
Segment profit | $ | 68.4 | $ | 14.8 | $ | 12.3 | $ | 2.5 | $ | 1.5 | $ | 99.5 | |||||||||||
Less: | |||||||||||||||||||||||
Selling, general and administrative expense | 46.1 | ||||||||||||||||||||||
Income taxes (includes |
11.9 | ||||||||||||||||||||||
Net income | $ | 41.5 | |||||||||||||||||||||
Selected Data: | |||||||||||||||||||||||
Investment volume | $ | 99.0 | $ | 33.1 | $ | — | $ | 14.5 | $ | 0.7 | $ | 147.3 | |||||||||||
Asset Remarketing Income: | |||||||||||||||||||||||
Net gains on disposition of owned assets | $ | 9.7 | $ | — | $ | — | $ | — | $ | — | $ | 9.7 | |||||||||||
Residual sharing income | 0.1 | — | 0.3 | — | — | 0.4 | |||||||||||||||||
Non-remarketing disposition (losses) gains (1) | (1.6 | ) | 0.4 | — | — | — | (1.2 | ) | |||||||||||||||
$ | 8.2 | $ | 0.4 | $ | 0.3 | $ | — | $ | — | $ | 8.9 |
__________
(1) Includes net gains (losses) from scrapping of railcars.
GATX CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION (UNAUDITED)
(In millions, except leverage)
Total Assets, Excluding Cash, by Segment | ||||||||||||||||||||
$ | 5,634.6 | $ | 5,632.4 | $ | 5,611.9 | $ | 5,607.7 | $ | 5,646.7 | |||||||||||
1,447.7 | 1,462.8 | 1,368.4 | 1,404.1 | 1,315.6 | ||||||||||||||||
Portfolio Management | 656.5 | 637.0 | 637.5 | 626.6 | 612.8 | |||||||||||||||
ASC | 300.8 | 291.1 | 319.0 | 331.2 | 311.1 | |||||||||||||||
Other | 107.6 | 110.8 | 105.5 | 96.6 | 99.4 | |||||||||||||||
Total Assets, excluding cash | $ | 8,147.2 | $ | 8,134.1 | $ | 8,042.3 | $ | 8,066.2 | $ | 7,985.6 | ||||||||||
Debt and Lease Obligations, Net of Unrestricted Cash | ||||||||||||||||||||
Unrestricted cash | $ | (570.7 | ) | $ | (151.0 | ) | $ | (48.6 | ) | $ | (286.6 | ) | $ | (248.4 | ) | |||||
Commercial paper and bank credit facilities | 275.5 | 15.8 | 112.0 | 26.0 | 15.9 | |||||||||||||||
Recourse debt | 5,043.7 | 4,780.4 | 4,580.2 | 4,832.5 | 4,768.1 | |||||||||||||||
Operating lease obligations | 399.3 | 432.3 | 440.3 | 454.5 | 456.3 | |||||||||||||||
Finance lease obligations | — | 7.9 | — | 10.6 | 11.0 | |||||||||||||||
Total debt and lease obligations, net of unrestricted cash | 5,147.8 | 5,085.4 | 5,083.9 | 5,037.0 | 5,002.9 | |||||||||||||||
Shareholders’ Equity | $ | 1,831.0 | $ | 1,835.1 | $ | 1,786.5 | $ | 1,834.8 | $ | 1,809.2 | ||||||||||
Recourse Leverage (1) | 2.8 | 2.8 | 2.8 | 2.7 | 2.8 |
_________
(1) Calculated as total recourse debt / shareholder’s equity.
Reconciliation of Total Assets to Total Assets, Excluding Cash | ||||||||||||||||||||
Total Assets | $ | 8,717.9 | $ | 8,285.1 | $ | 8,090.9 | $ | 8,353.1 | $ | 8,240.2 | ||||||||||
Less: cash | (570.7 | ) | (151.0 | ) | (48.6 | ) | (286.9 | ) | (254.6 | ) | ||||||||||
Total Assets, excluding cash | $ | 8,147.2 | $ | 8,134.1 | $ | 8,042.3 | $ | 8,066.2 | $ | 7,985.6 |
GATX CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL INFORMATION (UNAUDITED)
(Continued)
Rail North America Statistics | ||||||||||||||||||||
Lease Price Index (LPI) (1) | ||||||||||||||||||||
Average renewal lease rate change | (11.6 | )% | (9.1 | )% | (7.7 | )% | (2.8 | )% | 5.2 | % | ||||||||||
Average renewal term (months) | 31 | 37 | 40 | 40 | 39 | |||||||||||||||
Fleet Rollforward (2) | ||||||||||||||||||||
Beginning balance | 102,845 | 103,255 | 103,554 | 104,830 | 105,472 | |||||||||||||||
Cars added | 883 | 965 | 902 | 661 | 617 | |||||||||||||||
Cars scrapped | (389 | ) | (620 | ) | (513 | ) | (377 | ) | (662 | ) | ||||||||||
Cars sold | (781 | ) | (755 | ) | (688 | ) | (1,560 | ) | (597 | ) | ||||||||||
Ending balance | 102,558 | 102,845 | 103,255 | 103,554 | 104,830 | |||||||||||||||
Utilization | 99.0 | % | 99.3 | % | 99.2 | % | 99.5 | % | 99.4 | % | ||||||||||
Average active railcars | 101,668 | 102,309 | 102,653 | 104,089 | 104,613 | |||||||||||||||
Boxcar Fleet | ||||||||||||||||||||
Ending balance | 15,026 | 15,264 | 15,803 | 15,921 | 16,006 | |||||||||||||||
Utilization | 94.6 | % | 95.0 | % | 93.5 | % | 94.1 | % | 95.2 | % | ||||||||||
Rail Europe Statistics | ||||||||||||||||||||
Fleet Rollforward | ||||||||||||||||||||
Beginning balance | 24,561 | 24,211 | 23,967 | 23,531 | 23,412 | |||||||||||||||
Cars added | 871 | 416 | 325 | 491 | 185 | |||||||||||||||
Cars scrapped/sold | (80 | ) | (66 | ) | (81 | ) | (55 | ) | (66 | ) | ||||||||||
Ending balance | 25,352 | 24,561 | 24,211 | 23,967 | 23,531 | |||||||||||||||
Utilization | 98.5 | % | 99.3 | % | 99.4 | % | 98.9 | % | 98.9 | % | ||||||||||
Average active railcars | 24,622 | 24,216 | 23,877 | 23,480 | 23,105 | |||||||||||||||
Rail North America Industry Statistics | ||||||||||||||||||||
Manufacturing Capacity Utilization Index (3) | 72.7 | % | 77.1 | % | 77.4 | % | 77.7 | % | 78.4 | % | ||||||||||
Year-over-year Change in |
(6.3 | )% | (4.9 | )% | (3.8 | )% | (2.9 | )% | (3.1 | )% | ||||||||||
Year-over-year Change in |
3.1 | % | (0.6 | )% | (0.2 | )% | (0.1 | )% | (1.0 | )% | ||||||||||
Year-over-year Change in |
3.6 | % | 12.2 | % | 16.6 | % | 23.2 | % | 22.0 | % | ||||||||||
Production Backlog at Railcar Manufacturers (5) | 46,330 | 51,295 | 58,127 | 69,227 | 73,076 | |||||||||||||||
American Steamship Company Statistics | ||||||||||||||||||||
Total Net Tons Carried (millions) | 1.0 | 7.5 | 9.6 | 8.7 | 1.2 |
_________
(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
(4) As reported by the
(5) As reported by the
Source: GATX Corporation