GATX Corporation Reports 2022 Fourth-Quarter and Full-Year Results

Rhea-AI Summary

GATX Corporation (NYSE: GATX) reported fourth-quarter 2022 net income of $48.4 million or $1.36 per diluted share, down from $61.0 million or $1.69 per diluted share in Q4 2021. For the full year, net income rose to $155.9 million or $4.35 per diluted share, compared to $143.1 million or $3.98 in 2021. Rail North America saw a segment profit increase to $83.5 million, driven by higher lease revenues and a fleet utilization exceeding 99%. The company has set a 2023 earnings guidance of $6.50–$6.90 per diluted share, highlighting an optimistic outlook despite economic uncertainties. Overall investment volume for 2022 surpassed $1.2 billion, reflecting GATX's strategic growth initiatives.

Positive

• Full-year 2022 net income increased to $155.9 million, up from $143.1 million in 2021.
• Rail North America segment profit rose to $321.3 million in 2022, compared to $285.4 million in 2021.
• 2022 investment volume exceeded $1.2 billion, demonstrating commitment to growth.
• Fleet utilization remained above 99% in both Rail North America and Rail International segments.

Negative

• Fourth-quarter net income declined to $48.4 million from $61.0 million a year earlier.
• Rail International segment profit fell to $18.2 million in Q4 2022 from $28.9 million in Q4 2021.
• Impairment charges totaling $34.3 million in 2022 negatively impacted Portfolio Management segment profits.

• Rail North America and Rail International fleet utilization remained above 99%
• Lease rates in North America increased sequentially for tenth consecutive quarter
• Full-year investment volume exceeded $1.0 billion for third consecutive year
• Company initiates 2023 earnings guidance of $6.50–$6.90 per diluted share 

 

CHICAGO--(BUSINESS WIRE)-- GATX Corporation (NYSE: GATX) today reported 2022 fourth-quarter net income of $48.4 million or $1.36 per diluted share, compared to net income of $61.0 million or $1.69 per diluted share in the fourth quarter of 2021. The 2022 fourth-quarter results include a net negative impact from Tax Adjustments and Other Items of $0.18 per diluted share. The 2021 fourth-quarter results include a net positive impact from Tax Adjustments and Other Items of $0.11 per diluted share.

Net income for the full-year 2022 was $155.9 million or $4.35 per diluted share, compared to $143.1 million or $3.98 per diluted share in the prior year. The 2022 and 2021 full-year results include net negative impacts from Tax Adjustments and Other Items of $1.72 per diluted share and $1.08 per diluted share, respectively. Details related to Tax Adjustments and Other Items are provided in the attached Supplemental Information.

"GATX produced solid financial results in 2022, with each business unit contributing to a positive year," said Robert C. Lyons, president and chief executive officer of GATX. "Capitalizing on strong demand for existing assets and an improved railcar leasing environment, Rail North America exceeded segment profit expectations. Our commercial team achieved higher renewal lease rates while maintaining over 99% fleet utilization. We continued to improve the efficiency of our maintenance network, completing the vast majority of repair work at our owned facilities. We further optimized our fleet by selectively selling railcars into a robust secondary market, generating $104.6 million in remarketing income for the full year.

"Rail International performed well despite supply chain disruptions that delayed new car deliveries in Europe and India. Demand for railcars in both regions was strong, and Rail Europe continued to experience increases in renewal lease rates compared to expiring rates. In Portfolio Management, the Rolls-Royce and Partners Finance affiliates performed better than we anticipated as long-haul, international air traffic improved from a year ago.

"We capitalized on a number of attractive opportunities to grow our global asset base in 2022. In Rail North America, we invested more than $815 million and entered into a new six-year supply agreement that enhances our ability to meet customer needs. Despite delivery delays internationally, we invested over $176 million at Rail Europe and almost $68 million at Rail India. In the fourth quarter, we increased our direct investment in aircraft spare engines by acquiring five additional engines for nearly $150 million. In total, our 2022 investment volume was over $1.2 billion."

Mr. Lyons added, "For 2023, we expect the railcar leasing environment in North America to remain favorable. We project slightly higher segment profit at Rail North America as higher lease revenue and continued strength in remarketing income are expected to offset rising interest expense and modestly higher maintenance expense. Rail International’s 2023 segment profit is expected to increase as strong demand for new and existing railcars continues in Europe and India. In Portfolio Management, we anticipate higher earnings from RRPF driven by ongoing improvements in the operating environment for global air travel. Combined with increased earnings from GATX Engine Leasing, we expect Portfolio Management to generate higher segment profit in 2023."

Mr. Lyons concluded, "We enter 2023 facing uncertain economic conditions in North America and Europe, continued global supply chain challenges, and a heightened interest rate environment. Fortunately, GATX has a 125-year history of navigating volatile markets, and our global franchise positions us for continued strong performance in the year ahead. Based on our current outlook, we expect 2023 earnings to be in the range of $6.50–$6.90 per diluted share, which would mark another excellent year for GATX."

RAIL NORTH AMERICA

Rail North America reported segment profit of $83.5 million in the fourth quarter of 2022, compared to $75.6 million in the fourth quarter of 2021. For the full year, Rail North America reported segment profit of $321.3 million in 2022, compared to $285.4 million in 2021. 2021 fourth-quarter and year-to-date results include a net positive impact of $5.3 million from Tax Adjustments and Other Items. The increase in 2022 fourth-quarter and full-year segment profit was primarily the result of higher lease revenue and higher remarketing income.

As of Dec. 31, 2022, Rail North America’s wholly owned fleet was approximately 109,600 cars, including more than 8,600 boxcars. The following fleet statistics and performance discussion exclude the boxcar fleet.

Fleet utilization was 99.5% at the end of the fourth quarter, compared to 99.6% at the end of the prior quarter and 99.2% at 2021 year end. During the fourth quarter, the GATX Lease Price Index (LPI), a weighted-average lease renewal rate for a group of railcars representative of Rail North America’s fleet, was positive 29.7%. This compares to positive 37.5% in the prior quarter and negative 0.7% in the fourth quarter of 2021. The average lease renewal term for railcars included in the LPI during the fourth quarter was 34 months, compared to 33 months in the prior quarter and 37 months in the fourth quarter of 2021. The fourth-quarter renewal success rate was 85.7%, compared to 87.2% in the prior quarter and 89.2% in the fourth quarter of 2021.

For full-year 2022, the renewal lease rate change of the LPI was positive 23.4% and the average renewal term was 33 months, compared to negative 8.5% and 32 months in 2021. The renewal success rate for 2022 was 85.5%, compared to 82.7% in 2021. Total investment volume was $815.9 million in 2022.

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 $18.2 million in the fourth quarter of 2022, compared to $28.9 million in the fourth quarter of 2021. Full-year segment profit was $85.9 million in 2022, compared to $105.0 million in 2021. 2022 fourth-quarter and full-year results include impairment charges of $3.8 million and $14.6 million, respectively, related to the Company’s decision to exit its rail business in Russia. Compared to the prior year, lower segment profit was predominately driven by foreign exchange impacts, partially offset by more railcars on lease.

As of Dec. 31, 2022, GRE’s fleet consisted of over 28,000 cars and utilization was 99.3%, compared to 99.4% at the end of the prior quarter and 98.7% at 2021 year end.

Additional fleet statistics for GRE are provided on the last page of this press release.

PORTFOLIO MANAGEMENT

Portfolio Management reported segment profit of $23.1 million in the fourth quarter of 2022, compared to segment profit of $36.3 million in the fourth quarter of 2021. 2022 fourth-quarter segment profit includes an impairment charge of $2.8 million associated with the decision to sell the specialized gas vessels. Lower segment profit in the fourth quarter of 2022 was driven by lower gains on asset dispositions at the Rolls-Royce and Partners Finance (RRPF) affiliates.

Full-year 2022 segment profit was $14.7 million, compared to $60.8 million in 2021. Full-year 2022 results include an impairment charge of $34.3 million associated with the decision to sell the specialized gas vessels and an impairment charge recorded by RRPF, of which GATX’s share is $15.3 million, related to aircraft spare engines in Russia that RRPF does not expect to recover. Excluding these impacts, higher share of affiliates’ earnings from RRPF contributed to favorable 2022 full-year results.

COMPANY DESCRIPTION

At GATX Corporation (NYSE:GATX), we empower our customers to propel the world forward. GATX leases transportation assets including railcars, aircraft spare engines and tank containers to customers worldwide. Our mission is to provide innovative, unparalleled service that enables our customers to transport what matters safely and sustainably while championing the well-being of our employees and communities. Headquartered in Chicago, Illinois since its founding in 1898, GATX has paid a quarterly dividend, uninterrupted, since 1919.

TELECONFERENCE INFORMATION

GATX Corporation will host a teleconference to discuss 2022 fourth-quarter and full-year results. Call details are as follows:

Tuesday, Jan. 24, 2023
11 a.m. Eastern Time
Domestic Dial-In: 1-888-660-6118
International Dial-In: 1-929-203-1802
Replay: 1-800-770-2030 or 1-647-362-9199 / Access Code: 2548217

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. A replay will be available on the same site starting at 2 p.m. (Eastern Time), Jan. 24, 2023.

AVAILABILITY OF INFORMATION ON GATX’S WEBSITE

Investors and others should note that GATX routinely announces material information to investors and the marketplace using SEC filings, press releases, public conference calls, webcasts and the GATX Investor Relations website. While not all of the information that the Company posts to the GATX Investor Relations website is of a material nature, some information could be deemed to be material. Accordingly, the Company encourages investors, the media and others interested in GATX to review the information that it shares on www.gatx.com under the “Investor Relations” tab.

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, 2021 and in any subsequent reports on Form 10-Q, could cause actual results to differ materially from our current expectations expressed in forward-looking statements:

the impact of the ongoing military action between Russia and Ukraine, including sanctions and countermeasures, on domestic and global economic and geopolitical conditions in general and on our ability to consummate the sale of our railcar leasing business in Russia the duration and effects of the global COVID-19 pandemic and measures taken in response, including adverse impacts on our operations, commercial activity, supply chain, the demand for our transportation assets, the value of our assets, our liquidity, and macroeconomic conditions 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 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 a significant decline in customer demand for our transportation assets or services, including as a result of: weak macroeconomic conditions or increased interest rates 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 reduced demand for air travel, geographic exposure and customer concentrations other operational or commercial needs or decisions of our customers customers’ desire to buy, rather than lease, our transportation assets 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 fluctuations in foreign exchange rates inflation or deflation 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 significantly lower costs of capital 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 changes in, or failure to comply with, laws, rules, and regulations U.S. and global political conditions inability to obtain cost-effective insurance environmental liabilities and remediation costs potential obsolescence of our assets inadequate allowances to cover credit losses in our portfolio operational, functional and regulatory risks associated with climate change, severe weather events and natural disasters, and other environmental, social and governance matters inability to maintain and secure our information technology infrastructure from cybersecurity threats and related disruption of our business changes in assumptions, increases in funding requirements or investment losses in our pension and post-retirement plans inability to maintain effective internal control over financial reporting and disclosure controls and procedures

GATX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) (In millions, except per share data)
	Three Months Ended December 31										Twelve Months Ended December 31
		2022					2021					2022					2021
Revenues
Lease revenue	$	294.0			$		288.4				$	1,154.6			$		1,140.5
Marine operating revenue		2.7					5.4					18.9					19.1
Other revenue		26.0					27.2					99.5					97.8
Total Revenues		322.7					321.0					1,273.0					1,257.4
Expenses
Maintenance expense		71.4					72.0					292.7					297.1
Marine operating expense		2.4					3.7					14.1					17.5
Depreciation expense		89.3					93.2					357.5					364.4
Operating lease expense		9.0					9.1					36.1					39.2
Other operating expense		8.7					12.7					37.4					44.0
Selling, general and administrative expense		52.3					57.5					195.0					198.3
Total Expenses		233.1					248.2					932.8					960.5
Other Income (Expense)
Net gain on asset dispositions		24.5					26.8					77.9					105.9
Interest expense, net		(57.3	)				(50.6	)				(214.0	)				(204.0	)
Other (expense) income		(11.2	)				6.0					(27.0	)				(3.7	)
Income before Income Taxes and Share of Affiliates’ Earnings		45.6					55.0					177.1					195.1
Income taxes		(16.0	)				(16.8	)				(54.8	)				(53.2	)
Share of affiliates’ earnings, net of taxes		18.8					22.8					33.6					1.2
Net Income	$	48.4			$		61.0				$	155.9			$		143.1
Share Data
Basic earnings per share	$	1.38			$		1.72				$	4.41			$		4.04
Average number of common shares		35.2					35.5					35.4					35.4
Diluted earnings per share	$	1.36			$		1.69				$	4.35			$		3.98
Average number of common shares and common share equivalents		35.8					36.0					35.9					36.0
Dividends declared per common share	$	0.52			$		0.50				$	2.08			$		2.00

GATX CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) (In millions)
	December 31				December 31
		2022				2021
Assets
Cash and Cash Equivalents	$	303.7			$	344.3
Restricted Cash		0.3				0.2
Short-Term Investments		148.5				—
Receivables
Rent and other receivables		71.4				69.8
Finance leases (as lessor)		96.5				100.2
Less: allowance for losses		(5.9	)			(6.2	)
		162.0				163.8
Operating Assets and Facilities		11,675.0				11,163.6
Less: allowance for depreciation		(3,424.7	)			(3,378.8	)
		8,250.3				7,784.8
Lease Assets (as lessee)
Right-of-use assets, net of accumulated depreciation		243.5				270.7
Finance leases, net of accumulated depreciation		—				1.5
		243.5				272.2
Investments in Affiliated Companies		575.1				588.4
Goodwill		117.2				123.0
Other Assets ($40.0 million and $3.8 million related to assets held for sale)		271.4				265.0
Total Assets	$	10,072.0			$	9,541.7
Liabilities and Shareholders’ Equity
Accounts Payable and Accrued Expenses	$	202.2			$	215.8
Debt
Commercial paper and borrowings under bank credit facilities		17.3				18.1
Recourse		6,431.5				5,887.5
		6,448.8				5,905.6
Lease Obligations (as lessee)
Operating leases		257.9				286.2
Finance leases		—				1.5
		257.9				287.7
Deferred Income Taxes		1,031.5				1,001.0
Other Liabilities		102.0				112.4
Total Liabilities		8,042.4				7,522.5
Total Shareholders’ Equity		2,029.6				2,019.2
Total Liabilities and Shareholders’ Equity	$	10,072.0			$	9,541.7

GATX CORPORATION AND SUBSIDIARIES SEGMENT DATA (UNAUDITED) Three Months Ended December 31, 2022 (In millions)
	Rail North America				Rail International				Portfolio Management				Other				GATX Consolidated
Revenues
Lease revenue	$	211.0			$	66.8			$	8.2			$	8.0			$	294.0
Marine operating revenue		—				—				2.7				—				2.7
Other revenue		20.2				2.6				1.6				1.6				26.0
Total Revenues		231.2				69.4				12.5				9.6				322.7
Expenses
Maintenance expense		58.4				12.4				—				0.6				71.4
Marine operating expense		—				—				2.4				—				2.4
Depreciation expense		64.9				17.1				4.2				3.1				89.3
Operating lease expense		9.0				—				—				—				9.0
Other operating expense		5.3				2.3				0.6				0.5				8.7
Total Expenses		137.6				31.8				7.2				4.2				180.8
Other Income (Expense)
Net gain (loss) on asset dispositions		29.7				(3.3	)			(2.0	)			0.1				24.5
Interest expense, net		(38.8	)			(12.1	)			(5.1	)			(1.3	)			(57.3	)
Other expense		(1.2	)			(4.0	)			—				(6.0	)			(11.2	)
Share of affiliates’ pre-tax earnings		0.2				—				24.9				—				25.1
Segment profit (loss)	$	83.5			$	18.2			$	23.1			$	(1.8	)		$	123.0
Less:
Selling, general and administrative expense																		52.3
Income taxes (includes $6.3 related to affiliates’ earnings)																		22.3
Net income																	$	48.4
Selected Data:
Investment volume	$	139.3			$	66.1			$	149.7			$	12.8			$	367.9
Net Gain (loss) on Asset Dispositions
Asset Remarketing Income:
Net gains on disposition of owned assets	$	27.8			$	0.6			$	—			$	0.1			$	28.5
Residual sharing income		0.1				—				0.8				—				0.9
Non-remarketing net gains (1)		1.8				(0.1	)			—				—				1.7
Asset impairments		—				(3.8	)			(2.8	)			—				(6.6	)
	$	29.7			$	(3.3	)		$	(2.0	)		$	0.1			$	24.5
(1) Includes net gains (losses) from scrapping of railcars.

GATX CORPORATION AND SUBSIDIARIES SEGMENT DATA (UNAUDITED) Three Months Ended December 31, 2021 (In millions)
	Rail North America				Rail International				Portfolio Management				Other				GATX Consolidated
Revenues
Lease revenue	$	203.1			$	68.2			$	8.3			$	8.8			$	288.4
Marine operating revenue		—				—				5.4				—				5.4
Other revenue		20.8				3.5				—				2.9				27.2
Total Revenues		223.9				71.7				13.7				11.7				321.0
Expenses
Maintenance expense		56.6				14.0				—				1.4				72.0
Marine operating expense		—				—				3.7				—				3.7
Depreciation expense		65.4				18.4				5.0				4.4				93.2
Operating lease expense		9.1				—				—				—				9.1
Other operating expense		7.7				3.5				0.5				1.0				12.7
Total Expenses		138.8				35.9				9.2				6.8				190.7
Other Income (Expense)
Net gain on asset dispositions		19.5				0.7				6.3				0.3				26.8
Interest expense, net		(33.7	)			(11.0	)			(4.6	)			(1.3	)			(50.6	)
Other income (expense)		4.5				3.4				—				(1.9	)			6.0
Share of affiliates’ pre-tax earnings		0.2				—				30.1				—				30.3
Segment profit	$	75.6			$	28.9			$	36.3			$	2.0			$	142.8
Less:
Selling, general and administrative expense																		57.5
Income taxes (includes $7.5 related to affiliates’ earnings)																		24.3
Net income																	$	61.0
Selected Data:
Investment volume	$	180.0			$	47.2			$	—			$	11.5			$	238.7
Net Gain on Asset Dispositions
Asset Remarketing Income:
Net gains on disposition of owned assets	$	18.5			$	0.5			$	—			$	—			$	19.0
Residual sharing income		0.1				—				6.3				—				6.4
Non-remarketing net gains (1)		3.3				0.2				—				0.3				3.8
Asset impairments		(2.4	)			—				—				—				(2.4	)
	$	19.5			$	0.7			$	6.3			$	0.3			$	26.8
(1) Includes net gains (losses) from scrapping of railcars.

GATX CORPORATION AND SUBSIDIARIES SEGMENT DATA (UNAUDITED) Twelve Months Ended December 31, 2022 (In millions)
	Rail North America				Rail International				Portfolio Management				Other				GATX Consolidated
Revenues
Lease revenue	$	826.0			$	266.2			$	33.0			$	29.4			$	1,154.6
Marine operating revenue		—				—				18.9				—				18.9
Other revenue		82.0				9.1				1.7				6.7				99.5
Total Revenues		908.0				275.3				53.6				36.1				1,273.0
Expenses
Maintenance expense		238.5				51.4				—				2.8				292.7
Marine operating expense		—				—				14.1				—				14.1
Depreciation expense		258.6				69.1				17.8				12.0				357.5
Operating lease expense		36.1				—				—				—				36.1
Other operating expense		24.5				8.3				2.3				2.3				37.4
Total Expenses		557.7				128.8				34.2				17.1				737.8
Other Income (Expense)
Net gain (loss) on asset dispositions		119.7				(11.2	)			(31.1	)			0.5				77.9
Interest expense, net		(144.6	)			(45.6	)			(19.0	)			(4.8	)			(214.0	)
Other expense		(4.6	)			(3.8	)			—				(18.6	)			(27.0	)
Share of affiliates’ pre-tax earnings		0.5				—				45.4				—				45.9
Segment profit (loss)	$	321.3			$	85.9			$	14.7			$	(3.9	)		$	418.0
Less:
Selling, general and administrative expense																		195.0
Income taxes (includes $12.3 related to affiliates’ earnings)																		67.1
Net income																	$	155.9
Selected Data:
Investment volume	$	815.9			$	243.9			$	149.7			$	46.3			$	1,255.8
Net Gain (loss) on Asset Dispositions
Asset Remarketing Income:
Net gains on disposition of owned assets	$	102.2			$	1.6			$	—			$	0.3			$	104.1
Residual sharing income		2.4				—				3.2				—				5.6
Non-remarketing net gains (1)		15.1				1.8				—				0.2				17.1
Asset impairments		—				(14.6	)			(34.3	)			—				(48.9	)
	$	119.7			$	(11.2	)		$	(31.1	)		$	0.5			$	77.9
(1) Includes net gains (losses) from scrapping of railcars.

GATX CORPORATION AND SUBSIDIARIES SEGMENT DATA (UNAUDITED) Twelve Months Ended December 31, 2021 (In millions)
	Rail North America				Rail International				Portfolio Management				Other				GATX Consolidated
Revenues
Lease revenue	$	814.5			$	272.9			$	28.1			$	25.0			$	1,140.5
Marine operating revenue		—				—				19.1				—				19.1
Other revenue		77.2				11.4				0.5				8.7				97.8
Total Revenues		891.7				284.3				47.7				33.7				1,257.4
Expenses
Maintenance expense		235.4				57.6				—				4.1				297.1
Marine operating expense		—				—				17.5				—				17.5
Depreciation expense		261.1				73.6				17.6				12.1				364.4
Operating lease expense		39.2				—				—				—				39.2
Other operating expense		30.3				9.0				1.7				3.0				44.0
Total Expenses		566.0				140.2				36.8				19.2				762.2
Other Income (Expense)
Net gain on asset dispositions		94.3				2.7				8.0				0.9				105.9
Interest expense, net		(136.2	)			(45.2	)			(16.6	)			(6.0	)			(204.0	)
Other income (expense)		1.6				3.4				2.0				(10.7	)			(3.7	)
Share of affiliates’ pre-tax earnings		—				—				56.5				—				56.5
Segment profit (loss)	$	285.4			$	105.0			$	60.8			$	(1.3	)		$	449.9
Less:
Selling, general and administrative expense																		198.3
Income taxes (includes $55.3 related to affiliates’ earnings)																		108.5
Net income																	$	143.1
Selected Data:
Investment volume	$	574.4			$	173.3			$	353.0			$	31.2			$	1,131.9
Net Gain on Asset Dispositions
Asset Remarketing Income:
Net gains on disposition of owned assets	$	80.7			$	1.2			$	—			$	0.5			$	82.4
Residual sharing income		0.9				—				8.0				—				8.9
Non-remarketing net gains (1)		15.1				1.5				—				0.4				17.0
Asset impairments		(2.4	)			—				—				—				(2.4	)
	$	94.3			$	2.7			$	8.0			$	0.9			$	105.9
(1) Includes net gains (losses) 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(1)
	Three Months Ended December 31							Twelve Months Ended December 31
		2022			2021				2022				2021
Net income (GAAP)	$	48.4		$	61.0			$	155.9			$	143.1
Adjustments attributable to consolidated pre-tax income:
Rail Russia impairment at Rail International (2)		3.8			—				14.6				—
Specialized Gas Vessels impairment at Portfolio Management (3)		2.8			—				34.3				—
Environmental remediation costs (4)		—			—				5.9				—
Net insurance proceeds (5)		—			(5.3	)			—				(5.3	)
Debt extinguishment costs (6)		—			—				—				4.5
Total adjustments attributable to consolidated pre-tax income	$	6.6		$	(5.3	)		$	54.8			$	(0.8	)
Income taxes thereon, based on applicable effective tax rate	$	—		$	1.3			$	(1.5	)		$	0.2
Other income tax adjustments attributable to consolidated income:
Income tax rate change (7)		—			—				(3.0	)			—
Total other income tax adjustments attributable to consolidated income	$	—		$	—			$	(3.0	)		$	—
Adjustments attributable to affiliates’ earnings, net of taxes:
Aircraft spare engine impairment at RRPF (8)		—			—				11.5				—
Income tax rate change (9)		—			—				—				39.7
Total adjustments attributable to affiliates’ earnings, net of taxes	$	—		$	—			$	11.5			$	39.7
Net income, excluding tax adjustments and other items (non-GAAP)	$	55.0		$	57.0			$	217.7			$	182.2

Impact of Tax Adjustments and Other Items on Diluted Earnings per Share(1)
	Three Months Ended December 31							Twelve Months Ended December 31
		2022			2021				2022				2021
Diluted earnings per share (GAAP)	$	1.36		$	1.69			$	4.35			$	3.98
Diluted earnings per share, excluding tax adjustments and other items (non-GAAP)	$	1.54		$	1.58			$	6.07			$	5.06

GATX CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION (UNAUDITED) (Continued)
Impact of Tax Adjustments and Other Items on Return on Equity (1)
					Twelve Months Ended December 31
					2022		2021
Return on Equity (GAAP)					7.7 %		7.2 %
Return on equity, excluding tax adjustments and other items (non-GAAP)					10.8 %		9.2 %

(1)		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.
(2)		In 2022, we made the decision to exit our rail business in Russia. As a result, we recorded losses associated with the impairment of the net assets.
(3)		In 2022, we made the decision to sell the Specialized Gas Vessels. As a result, we recorded losses associated with the impairments of these assets.
(4)		Reserve recorded as part of an executed agreement for anticipated remediation costs at a previously owned property, sold in 1974.
(5)		Net gain from insurance recoveries from storm damage to a maintenance facility at Rail North America.
(6)		Write-off of unamortized deferred financing costs associated with the early redemption of our $150 million 5.625% Senior Notes due 2066.
(7)		Deferred income tax adjustment due to an enacted corporate income tax rate reduction in Austria in 2022.
(8)		Impairment losses related to aircraft spare engines in Russia that RRPF does not expect to recover.
(9)		Deferred income tax adjustment due to an enacted corporate income tax rate increase in the United Kingdom in 2021.

GATX CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION (UNAUDITED) (In millions, except leverage) (Continued)
		12/31/2022				9/30/2022				6/30/2022				3/31/2022				12/31/2021
Total Assets, Excluding Cash and Short-Term Investments, by Segment
Rail North America		$	6,439.1			$	6,405.4			$	6,347.2			$	6,183.7			$	6,101.6
Rail International			1,731.3				1,554.3				1,634.5				1,677.9				1,689.2
Portfolio Management			1,084.8				970.9				1,010.3				1,031.5				1,040.0
Other			364.3				348.2				351.7				366.0				366.4
Total Assets, excluding cash and short-term investments		$	9,619.5			$	9,278.8			$	9,343.7			$	9,259.1			$	9,197.2
Debt and Lease Obligations, Net of Unrestricted Cash and Short-Term Investments
Unrestricted cash and short-term investments		$	(452.2	)		$	(596.3	)		$	(180.3	)		$	(649.3	)		$	(344.3	)
Commercial paper and bank credit facilities			17.3				16.3				20.0				18.6				18.1
Recourse debt			6,431.5				6,353.1				5,964.4				6,256.9				5,887.5
Operating lease obligations			257.9				259.0				266.7				273.4				286.2
Finance lease obligation			—				—				—				—				1.5
Total debt and lease obligations, net of unrestricted cash and short-term investments		$	6,254.5			$	6,032.1			$	6,070.8			$	5,899.6			$	5,849.0
Total recourse debt (1)		$	6,254.5			$	6,032.1			$	6,070.8			$	5,899.6			$	5,849.0
Shareholders’ Equity		$	2,029.6			$	1,940.5			$	1,981.5			$	2,060.8			$	2,019.2
Recourse Leverage (2)			3.1				3.1				3.1				2.9				2.9

(1)		Includes recourse debt, commercial paper and bank credit facilities, and operating and finance lease obligations, net of unrestricted cash and short-term investments.
(2)		Calculated as total recourse debt / shareholder’s equity.

Reconciliation of Total Assets to Total Assets, Excluding Cash and Short-Term Investments
Total Assets		$	10,072.0			$	9,875.4			$	9,524.2			$	9,908.6			$	9,541.7
Less: cash and short-term investments			(452.5	)			(596.6	)			(180.5	)			(649.5	)			(344.5	)
Total Assets, excluding cash and short-term investments		$	9,619.5			$	9,278.8			$	9,343.7			$	9,259.1			$	9,197.2

GATX CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION (UNAUDITED) (Continued)
	12/31/2022			9/30/2022			6/30/2022			3/31/2022			12/31/2021
Rail North America Statistics
Lease Price Index (LPI) (1)
Average renewal lease rate change	29.7	%		37.5	%		18.3	%		9.3	%		(0.7	) %
Average renewal term (months)	34			33			34			30			37
Fleet Rollforward (2)
Beginning balance	101,289			101,272			100,452			101,570			101,341
Cars added	583			772			1,414			943			959
Cars scrapped	(486	)		(506	)		(594	)		(547	)		(358	)
Cars sold	(432	)		(249	)		—			(1,514	)		(372	)
Ending balance	100,954			101,289			101,272			100,452			101,570
Utilization	99.5	%		99.6	%		99.4	%		99.3	%		99.2	%
Average active railcars	100,618			100,783			100,079			100,253			100,658
Boxcar Fleet Rollforward
Beginning balance	10,224			10,315			10,283			12,946			12,809
Cars added	106			—			85			352			421
Cars scrapped	(94	)		(91	)		64			(109	)		(184	)
Cars sold	(1,573	)		—			(117	)		(2,906	)		(100	)
Ending balance	8,663			10,224			10,315			10,283			12,946
Utilization	99.9	%		100.0	%		99.9	%		99.8	%		99.7	%
Average active railcars	9,032			10,267			10,239			10,856			12,747
Rail Europe Statistics
Fleet Rollforward
Beginning balance	27,701			27,470			27,192			27,109			26,840
Cars added	362			277			347			225			333
Cars scrapped/sold	(58	)		(46	)		(69	)		(142	)		(64	)
Ending balance	28,005			27,701			27,470			27,192			27,109
Utilization	99.3	%		99.4	%		99.9	%		99.0	%		98.7	%
Average active railcars	27,658			27,489			27,158			26,850			26,562
Rail North America Industry Statistics
Manufacturing Capacity Utilization Index (3)	78.8	%		80.1	%		79.8	%		79.9	%		76.3	%
Year-over-year Change in U.S. Carloadings (excl. intermodal) (4)	(0.3	) %		0.1	%		(0.1	) %		2.6	%		6.6	%
Year-over-year Change in U.S. Carloadings (chemical) (4)	—	%		3.1	%		4.9	%		9.4	%		5.6	%
Year-over-year Change in U.S. Carloadings (petroleum) (4)	(7.6	) %		(10.4	) %		(13.1	) %		(15.3	) %		(4.5	) %
Production Backlog at Railcar Manufacturers (5)	n/a (6)			61,415			47,461			46,208			42,993

_________

(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.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20230124005496/en/

GATX Corporation

Shari Hellerman

Senior Director

Investor Relations, ESG, and External Communications

312-621-4285

shari.hellerman@gatx.com

Source: GATX Corporation

FAQ

What were GATX's earnings for Q4 2022?

GATX reported a net income of $48.4 million or $1.36 per diluted share for Q4 2022.

How did GATX perform in 2022 compared to 2021?

GATX's full-year net income for 2022 was $155.9 million, up from $143.1 million in 2021.

What is GATX's earnings guidance for 2023?

GATX expects 2023 earnings to be in the range of $6.50–$6.90 per diluted share.

What was the investment volume for GATX in 2022?

GATX's total investment volume for 2022 exceeded $1.2 billion.

How did the Rail North America segment perform in 2022?

Rail North America reported a segment profit of $321.3 million in 2022, an increase from $285.4 million in 2021.