GATX Corporation Reports 2023 Fourth-Quarter and Full-Year Results

Rhea-AI Summary

GATX Corporation reported a net income of $259.2 million or $7.12 per diluted share for the full year 2023, with a net positive impact from Tax Adjustments and Other Items of $0.05 per diluted share. The company initiated 2024 earnings guidance of $7.30–$7.70 per diluted share. Rail North America's segment profit decreased in the fourth quarter of 2023, while Rail International and Portfolio Management reported increased segment profits. GATX Corporation will host a teleconference to discuss 2023 fourth-quarter and full-year results.

Positive

• GATX Corporation reported strong financial results for the full year 2023, with net income of $259.2 million.
• Rail International's segment profit increased in the fourth quarter of 2023, compared to the same period in 2022.
• The company initiated 2024 earnings guidance of $7.30–$7.70 per diluted share.

Negative

• Rail North America reported a decrease in segment profit in the fourth quarter of 2023 compared to the same period in 2022.
• Portfolio Management reported net negative impacts from Tax Adjustments and Other Items in 2023.

Insights

Financial Analyst

The reported full-year net income of $259.2 million, with a per diluted share value of $7.12, reflects a substantial increase from the previous year's $155.9 million at $4.35 per share. This growth is indicative of a robust performance, particularly when considering the inclusion of a net positive impact from Tax Adjustments and Other Items. The company's initiation of a 2024 earnings guidance ranging from $7.30 to $7.70 per diluted share suggests confidence in continued growth and operational efficiency. Investors should note the positive lease rate changes and extended lease terms, which contribute to long-term cash flow stability. The investment volume exceeding $1.6 billion demonstrates aggressive capital deployment in growth areas, which could lead to further revenue expansion but also requires scrutiny of the underlying asset quality and market conditions to ensure sustainable profitability.

Market Research Analyst

The railcar leasing market in North America is described as solid, with GATX capitalizing on favorable conditions by increasing renewal lease rates and extending lease terms. The positive 33.5% change in the GATX Lease Price Index for the quarter, coupled with an average renewal term of 65 months, indicates a strong pricing environment and demand for railcar leases. The company's strategic investment in new railcars and the optimization of its fleet through sales in a vibrant secondary market is a proactive approach to asset management. The Rail International segment's performance, with a notable increase in fleet size in Rail India, points to successful geographical diversification and an ability to capture growth in emerging markets. These factors collectively suggest potential for market share expansion and resilience against economic fluctuations.

Economist

The global recovery in passenger air travel has positively impacted the Portfolio Management segment, particularly the Rolls-Royce and Partners Finance affiliates. This recovery is reflective of broader economic trends, where sectors hit hardest by the pandemic are now experiencing a rebound. The demand for engines within the RRPF portfolio and revenue from GATX's wholly owned engines exceeding expectations for the year highlight the cyclical nature of the aviation industry and its current upswing. This segment's performance underscores the importance of diversification within a company's portfolio to hedge against sector-specific risks. The anticipated robust demand for aircraft spare engines signals potential for strong earnings, contributing to the positive outlook for 2024. However, investors should remain cognizant of the inherent volatility in the aviation sector and the impact of macroeconomic factors such as oil prices and geopolitical tensions on the industry's prospects.

• Full-year 2023 net income was $259.2 million or $7.12 per diluted share, including a net positive impact from Tax Adjustments and Other Items of $0.05 per diluted share

• Full-year investment volume exceeded $1.6 billion

• Company initiates 2024 earnings guidance of $7.30–$7.70 per diluted share

CHICAGO--(BUSINESS WIRE)-- GATX Corporation (NYSE: GATX) today reported 2023 fourth-quarter net income of $66.0 million or $1.81 per diluted share, compared to net income of $48.4 million or $1.36 per diluted share in the fourth quarter of 2022. The 2023 fourth-quarter results include a net positive impact from Tax Adjustments and Other Items of $0.07 per diluted share. The 2022 fourth-quarter results include a net negative impact from Tax Adjustments and Other Items of $0.18 per diluted share.

Net income for the full-year 2023 was $259.2 million or $7.12 per diluted share, compared to $155.9 million or $4.35 per diluted share in the prior year. The 2023 full-year results include a net positive impact from Tax Adjustments and Other Items of $0.05 per diluted share. The 2022 full-year results include a net negative impact from Tax Adjustments and Other Items of $1.72 per diluted share. Details related to Tax Adjustments and Other Items are provided in the attached Supplemental Information.

"GATX achieved excellent financial results in the fourth quarter, resulting in a very strong year in terms of net earnings, earnings per share and investment volume," said Robert C. Lyons, president and chief executive officer of GATX. "The railcar leasing environment in North America remains solid. In 2023, we capitalized on the favorable market conditions by successfully increasing renewal lease rates while extending lease terms. This strategy enabled us to continue locking in high-quality, long-term committed cash flow. The renewal lease rate change of GATX’s Lease Price Index was positive 33.5% for the quarter, with an average renewal term of 65 months. Furthermore, we identified opportunities to invest in attractive markets while also optimizing our fleet by selling railcars into an active secondary market. For the full year, Rail North America's investment volume was $977 million, while remarketing income was $112 million.

"Rail International also performed well as it maintained solid fleet utilization at year end and continued to experience increases in renewal lease rates compared to expiring rates for most railcar types. Both Rail Europe and Rail India progressed against their goal of growing and diversifying their fleets. In particular, Rail India had record investment volume in 2023 and increased its fleet size by over 2,900 new railcars.

"In Portfolio Management, the Rolls-Royce and Partners Finance affiliates outperformed our original expectation due to the strong recovery in global passenger air travel. Demand for engines within the RRPF portfolio was very strong, and revenues from GATX wholly owned engines exceeded our expectations for the year. Historically, global air travel has been extremely resilient through economic cycles and macro shocks, and this resiliency was proven once again as air travel continues its strong recovery from pandemic-era lows.

"In 2023, we executed our strategy to invest in attractive leasing assets across our global businesses. In addition to successfully placing deliveries of new railcars under our supply agreements in North America, we identified incremental opportunities to acquire over 2,300 railcars for $324 million. In Rail International, we invested over $380 million and added a combined total of over 4,600 new railcars in Europe and India. In Portfolio Management, we increased our direct investment in aircraft spare engines by acquiring 10 engines for over $260 million. Overall, our full-year investment volume exceeded $1.6 billion."

Mr. Lyons added, "For 2024, we expect Rail North America's segment profit to increase, driven by higher lease revenue as we continue to add new railcars to the fleet and renew expiring leases at higher lease rates across many car types. We also anticipate higher segment profit in Rail International due to more railcars on lease at higher lease rates. In Portfolio Management, we anticipate robust demand for aircraft spare engines, which should result in another year of strong earnings from RRPF and our wholly owned engines.

Mr. Lyons concluded, "Over the past several years, GATX has made disciplined investments that position us well for the future, and we will continue to look for opportunities to invest prudently across our global businesses. We remain intensely focused on generating attractive risk-adjusted returns for our shareholders. Based on our current outlook, we expect 2024 earnings to be in the range of $7.30–$7.70 per diluted share, which would represent another strong year for GATX."

RAIL NORTH AMERICA

Rail North America reported segment profit of $66.7 million in the fourth quarter of 2023, compared to $83.5 million in the fourth quarter of 2022. For the full year, Rail North America reported segment profit of $307.3 million in 2023, compared to $321.3 million in 2022. Lower fourth-quarter and full-year 2023 segment profit was primarily driven by higher maintenance expense due to higher repair volume and higher interest expense, partly offset by higher revenues.

As of Dec. 31, 2023, Rail North America’s wholly owned fleet was approximately 110,500 cars, including more than 9,300 boxcars. The following fleet statistics and performance discussion exclude the boxcar fleet.

Fleet utilization was 99.3% at the end of the fourth quarter, compared to 99.3% at the end of the prior quarter and 99.5% at 2022 year end. During the fourth quarter, the renewal lease rate change of the GATX Lease Price Index (LPI) was positive 33.5%. This compares to positive 33.4% in the prior quarter and positive 24.4% in the fourth quarter of 2022. The average lease renewal term for railcars included in the LPI during the fourth quarter was 65 months, compared to 65 months in the prior quarter and 52 months in the fourth quarter of 2022. The 2023 fourth-quarter renewal success rate was 87.1%, compared to 83.6% in the prior quarter and 85.7% in the fourth quarter of 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 $34.4 million in the fourth quarter of 2023, compared to $18.2 million in the fourth quarter of 2022. Full-year segment profit was $113.4 million in 2023, compared to $85.9 million in 2022. 2023 full-year results include a net positive impact of $0.3 million from Tax Adjustments and Other Items. 2022 fourth-quarter and full-year results include net negative impacts of $3.8 million and $14.6 million, respectively, from Tax Adjustments and Other Items. Results in 2023 were favorably impacted by more railcars on lease.

As of Dec. 31, 2023, GATX Rail Europe’s (GRE) fleet consisted of over 29,200 cars and utilization was 95.9%, compared to 96.0% at the end of the prior quarter and 99.3% at 2022 year end.

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

PORTFOLIO MANAGEMENT

Portfolio Management reported segment profit of $31.3 million in the fourth quarter of 2023, compared to segment profit of $23.1 million in the fourth quarter of 2022. 2023 and 2022 fourth-quarter results include net negative impacts of $2.6 million and $2.8 million, respectively, from Tax Adjustments and Other Items. 2023 full-year segment profit was $106.4 million, compared to $14.7 million in 2022. 2023 and 2022 full-year results include net negative impacts of $4.0 million and $49.6 million, respectively, from Tax Adjustments and Other Items. Additional details are provided in the attached Supplemental Information under Impact of Tax Adjustments and Other Items.

Higher 2023 fourth-quarter and full-year segment profit was predominately driven by stronger operating performance and higher remarketing income at the Rolls-Royce and Partners Finance affiliates. Increased earnings from GATX Engine Leasing, the Company’s wholly owned engine portfolio, also contributed to higher segment profit in 2023.

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 2023 fourth-quarter and full-year results. Call details are as follows:

Tuesday, Jan. 23, 2024
11 a.m. Eastern Time
Domestic Dial-In: 1-888-660-6118
International Dial-In: 1-929-203-1802
Replay: 1-800-770-2030 (Domestic) or 1-647-362-9199 (International) / 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. 23, 2024.

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, 2022, could cause actual results to differ materially from our current expectations expressed in forward-looking statements:

a significant decline in customer demand for our transportation assets or services, including as a result of: prolonged inflation and 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

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

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
		2023				2022				2023				2022
Revenues
Lease revenue	$	323.6			$	294.0			$	1,251.4			$	1,154.6
Non-dedicated engine revenue		13.1				1.5				37.6				1.5
Marine operating revenue		0.8				2.7				6.9				18.9
Other revenue		31.2				24.5				115.0				98.0
Total Revenues		368.7				322.7				1,410.9				1,273.0
Expenses
Maintenance expense		90.7				71.4				344.8				292.7
Marine operating expense		1.1				2.4				6.5				14.1
Depreciation expense		98.2				89.3				376.3				357.5
Operating lease expense		9.0				9.0				36.0				36.1
Other operating expense		12.6				8.7				46.6				37.4
Selling, general and administrative expense		59.3				52.3				212.7				195.0
Total Expenses		270.9				233.1				1,022.9				932.8
Other Income (Expense)
Net gain on asset dispositions		25.2				24.5				130.3				77.9
Interest expense, net		(72.6	)			(57.3	)			(263.4	)			(214.0	)
Other expense		(2.3	)			(11.2	)			(9.4	)			(27.0	)
Income before Income Taxes and Share of Affiliates’ Earnings		48.1				45.6				245.5				177.1
Income taxes		(6.4	)			(16.0	)			(58.7	)			(54.8	)
Share of affiliates’ earnings, net of taxes		24.3				18.8				72.4				33.6
Net Income	$	66.0			$	48.4			$	259.2			$	155.9
Share Data
Basic earnings per share	$	1.82			$	1.38			$	7.13			$	4.41
Average number of common shares		35.7				35.2				35.7				35.4
Diluted earnings per share	$	1.81			$	1.36			$	7.12			$	4.35
Average number of common shares and common share equivalents		35.8				35.8				35.7				35.9
Dividends declared per common share	$	0.55			$	0.52			$	2.20			$	2.08

GATX CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (UNAUDITED) (In millions)
	December 31				December 31
		2023				2022
Assets
Cash and Cash Equivalents	$	450.7			$	303.7
Restricted Cash		0.1				0.3
Short-Term Investments		—				148.5
Receivables
Rent and other receivables		87.9				71.4
Finance leases (as lessor)		136.4				96.5
Less: allowance for losses		(5.9	)			(5.9	)
		218.4				162.0
Operating Assets and Facilities		13,081.9				11,675.0
Less: allowance for depreciation		(3,670.7	)			(3,424.7	)
		9,411.2				8,250.3
Lease Assets (as lessee)
Right-of-use assets, net of accumulated depreciation		212.0				243.5
		212.0				243.5
Investments in Affiliated Companies		627.0				575.1
Goodwill		120.0				117.2
Other Assets ($0.8 million and $40.0 million related to assets held for sale)		286.6				271.4
Total Assets	$	11,326.0			$	10,072.0
Liabilities and Shareholders’ Equity
Accounts Payable and Accrued Expenses	$	239.6			$	202.2
Debt
Commercial paper and borrowings under bank credit facilities		11.0				17.3
Recourse		7,388.1				6,431.5
		7,399.1				6,448.8
Lease Obligations (as lessee)
Operating leases		226.8				257.9
		226.8				257.9
Deferred Income Taxes		1,081.1				1,031.5
Other Liabilities		106.4				102.0
Total Liabilities		9,053.0				8,042.4
Total Shareholders’ Equity		2,273.0				2,029.6
Total Liabilities and Shareholders’ Equity	$	11,326.0			$	10,072.0

GATX CORPORATION AND SUBSIDIARIES SEGMENT DATA (UNAUDITED) Three Months Ended December 31, 2023 (In millions)
	Rail North America				Rail International				Portfolio Management				Other			GATX Consolidated
Revenues
Lease revenue	$	229.6			$	77.5			$	8.1			$	8.4		$	323.6
Non-dedicated engine revenue		—				—				13.1				—			13.1
Marine operating revenue		—				—				0.8				—			0.8
Other revenue		25.9				3.3				—				2.0			31.2
Total Revenues		255.5				80.8				22.0				10.4			368.7
Expenses
Maintenance expense		73.5				16.5				—				0.7			90.7
Marine operating expense		—				—				1.1				—			1.1
Depreciation expense		67.4				18.4				8.4				4.0			98.2
Operating lease expense		9.0				—				—				—			9.0
Other operating expense		5.7				3.2				2.9				0.8			12.6
Total Expenses		155.6				38.1				12.4				5.5			211.6
Other Income (Expense)
Net gain (loss) on asset dispositions		23.1				4.6				(2.5	)			—			25.2
Interest (expense) income, net		(49.5	)			(15.7	)			(8.9	)			1.5			(72.6	)
Other (expense) income		(6.7	)			2.8				0.7				0.9			(2.3	)
Share of affiliates' pre-tax (loss) earnings		(0.1	)			—				32.4				—			32.3
Segment profit	$	66.7			$	34.4			$	31.3			$	7.3		$	139.7
Less:
Selling, general and administrative expense																	59.3
Income taxes (includes $8.0 related to affiliates' earnings)																	14.4
Net income																$	66.0
Selected Data:
Investment volume	$	322.1			$	94.4			$	—			$	11.0		$	427.5
Net Gain (loss) on Asset Dispositions
Asset Remarketing Income:
Net gains (losses) on disposition of owned assets	$	23.3			$	4.4			$	(2.6	)		$	—		$	25.1
Residual sharing income		0.1				—				0.1				—			0.2
Non-remarketing net gains (1)		(0.3	)			0.5				—				—			0.2
Asset impairments		—				(0.3	)			—				—			(0.3	)
	$	23.1			$	4.6			$	(2.5	)		$	—		$	25.2

_________

(1) Includes net gains (losses) from scrapping of railcars.

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
Non-dedicated engine revenue		—				—				1.5				—				1.5
Marine operating revenue		—				—				2.7				—				2.7
Other revenue		20.2				2.6				0.1				1.6				24.5
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) Twelve Months Ended December 31, 2023 (In millions)
	Rail North America				Rail International				Portfolio Management				Other			GATX Consolidated
Revenues
Lease revenue	$	888.8			$	296.6			$	32.6			$	33.4		$	1,251.4
Non-dedicated engine revenue		—				—				37.6				—			37.6
Marine operating revenue		—				—				6.9				—			6.9
Other revenue		93.9				12.9				0.1				8.1			115.0
Total Revenues		982.7				309.5				77.2				41.5			1,410.9
Expenses
Maintenance expense		276.6				64.1				—				4.1			344.8
Marine operating expense		—				—				6.5				—			6.5
Depreciation expense		265.9				68.2				28.3				13.9			376.3
Operating lease expense		36.0				—				—				—			36.0
Other operating expense		25.9				10.4				7.3				3.0			46.6
Total Expenses		604.4				142.7				42.1				21.0			810.2
Other Income (Expense)
Net gain on asset dispositions		120.5				7.0				2.2				0.6			130.3
Interest (expense) income, net		(182.9	)			(56.2	)			(29.8	)			5.5			(263.4	)
Other (expense) income		(8.0	)			(4.2	)			0.2				2.6			(9.4	)
Share of affiliates' pre-tax (loss) earnings		(0.6	)			—				98.7				—			98.1
Segment profit	$	307.3			$	113.4			$	106.4			$	29.2		$	556.3
Less:
Selling, general and administrative expense																	212.7
Income taxes (includes $25.7 related to affiliates' earnings)																	84.4
Net income																$	259.2
Selected Data:
Investment volume	$	976.9			$	382.4			$	267.3			$	38.4		$	1,665.0
Net Gain (loss) on Asset Dispositions
Asset Remarketing Income:
Net gains on disposition of owned assets	$	111.7			$	4.9			$	2.9			$	0.3		$	119.8
Residual sharing income		0.4				—				0.5				—			0.9
Non-remarketing net gains (1)		8.4				2.4				—				0.3			11.1
Asset impairments		—				(0.3	)			(1.2	)			—			(1.5	)
	$	120.5			$	7.0			$	2.2			$	0.6		$	130.3

__________

(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
Non-dedicated engine revenue		—				—				1.5				—				1.5
Marine operating revenue		—				—				18.9				—				18.9
Other revenue		82.0				9.1				0.2				6.7				98.0
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 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
		2023				2022			2023				2022
Net income (GAAP)	$	66.0			$	48.4		$	259.2			$	155.9
Adjustments attributable to consolidated pre-tax income:
Loss on Specialized Gas Vessels at Portfolio Management (2)		2.6				2.8			4.0				34.3
Net loss (gain) on Rail Russia at Rail International (3)		—				3.8			(0.3	)			14.6
Environmental remediation costs (4)		—				—			—				5.9
Total adjustments attributable to consolidated pre-tax income	$	2.6			$	6.6		$	3.7			$	54.8
Income taxes thereon, based on applicable effective tax rate	$	—			$	—		$	—			$	(1.5	)
Other income tax adjustments attributable to consolidated income:
Income tax rate changes (5)	$	(3.0	)		$	—		$	(3.0	)		$	(3.0	)
Net operating loss valuation allowance adjustment (6)		(2.3	)			—			(2.3	)			—
Total other income tax adjustments attributable to consolidated income	$	(5.3	)		$	—		$	(5.3	)		$	(3.0	)
Adjustments attributable to affiliates' earnings, net of taxes:
Aircraft spare engine impairment at RRPF (7)	$	—			$	—		$	—			$	11.5
Total adjustments attributable to affiliates' earnings, net of taxes	$	—			$	—		$	—			$	11.5
Net income, excluding tax adjustments and other items (non-GAAP)	$	63.3			$	55.0		$	257.6			$	217.7

Impact of Tax Adjustments and Other Items on Diluted Earnings per Share(1)
	Three Months Ended December 31						Twelve Months Ended December 31
		2023			2022			2023			2022
Diluted earnings per share (GAAP)	$	1.81		$	1.36		$	7.12		$	4.35
Diluted earnings per share, excluding tax adjustments and other items (non-GAAP)	$	1.74		$	1.54		$	7.07		$	6.07

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
	2023			2022
Return on Equity (GAAP)	12.0	%		7.7	%
Return on equity, excluding tax adjustments and other items (non-GAAP)	12.0	%		10.8	%

_________
(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 sell the Specialized Gas Vessels. We have recorded gains and losses associated with the subsequent impairments and sales of these assets.
(3)	In 2022, we made the decision to exit our rail business in Russia ("Rail Russia") and recorded losses in 2022 associated with the impairment of the net assets. In 2023, we sold Rail Russia and recorded a gain on the final sale of this business.
(4)	Reserve recorded as part of an executed agreement for anticipated remediation costs at a previously owned property, sold in 1974.
(5)	Deferred income tax adjustments attributable to state tax rate reductions in 2023 and an enacted corporate income tax rate reduction in Austria in 2022.
(6)	Valuation allowance adjustment associated with the realizability of state net operating losses in future tax years.
(7)	Impairment losses related to aircraft spare engines in Russia that RRPF does not expect to recover.

GATX CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION (UNAUDITED) (In millions, except leverage) (Continued)
	12/31/2023				9/30/2023				6/30/2023				3/31/2023				12/31/2022
Total Assets, Excluding Cash and Short-Term Investments, by Segment
Rail North America	$	6,984.9			$	6,760.5			$	6,671.3			$	6,610.8			$	6,439.1
Rail International		2,150.8				1,951.5				1,902.3				1,801.2				1,731.3
Portfolio Management		1,343.2				1,363.8				1,328.6				1,089.6				1,084.8
Other		396.3				368.5				370.2				368.9				364.3
Total Assets, excluding cash and short-term investments	$	10,875.2			$	10,444.3			$	10,272.4			$	9,870.5			$	9,619.5
Debt and Lease Obligations, Net of Unrestricted Cash and Short-Term Investments
Unrestricted cash and short-term investments	$	(450.7	)		$	(203.1	)		$	(317.5	)		$	(177.4	)		$	(452.2	)
Commercial paper and bank credit facilities		11.0				12.3				10.9				20.3				17.3
Recourse debt		7,388.1				6,835.6				6,785.6				6,360.9				6,431.5
Operating lease obligations		226.8				233.2				241.1				246.2				257.9
Total debt and lease obligations, net of unrestricted cash and short-term investments	$	7,175.2			$	6,878.0			$	6,720.1			$	6,450.0			$	6,254.5
Total recourse debt (1)	$	7,175.2			$	6,878.0			$	6,720.1			$	6,450.0			$	6,254.5
Shareholders’ Equity	$	2,273.0			$	2,174.5			$	2,178.9			$	2,101.5			$	2,029.6
Recourse Leverage (2)		3.2				3.2				3.1				3.1				3.1

_________

(1) Includes recourse debt, commercial paper and bank credit facilities, and operating 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	$	11,326.0			$	10,647.5			$	10,590.1			$	10,048.1			$	10,072.0
Less: cash and short-term investments		(450.8	)			(203.2	)			(317.7	)			(177.6	)			(452.5	)
Total Assets, excluding cash and short-term investments	$	10,875.2			$	10,444.3			$	10,272.4			$	9,870.5			$	9,619.5

GATX CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION (UNAUDITED) (Continued)
	12/31/2023			9/30/2023			6/30/2023			3/31/2023			12/31/2022
Rail North America Statistics
Lease Price Index (LPI) (1)
Average renewal lease rate change	33.5	%		33.4	%		33.1	%		28.3	%		24.4		%
Average renewal term (months)	65			65			61			55			52
Renewal Success Rate (2)	87.1	%		83.6	%		85.3	%		77.9	%		85.7		%
Fleet Rollforward (3)
Beginning balance	100,656			100,585			101,219			100,954			101,289
Cars added	1,688			791			358			1,816			583
Cars scrapped	(354	)		(292	)		(316	)		(324	)		(486	)
Cars sold	(823	)		(428	)		(676	)		(1,227	)		(432	)
Ending balance	101,167			100,656			100,585			101,219			100,954
Utilization	99.3	%		99.3	%		99.3	%		99.3	%		99.5	%
Average active railcars	100,197			99,796			100,230			100,552			100,618
Boxcar Fleet Rollforward
Beginning balance	9,087			8,959			8,789			8,663			10,224
Cars added	424			316			279			229			106
Cars scrapped	(152	)		(95	)		(109	)		(103	)		(94	)
Cars sold	(48	)		(93	)		—			—			(1,573	)
Ending balance	9,311			9,087			8,959			8,789			8,663
Utilization	100.0	%		99.7	%		99.8	%		100.0	%		99.9		%
Average active railcars	9,207			8,985			8,855			8,720			9,032
Rail North America Industry Statistics
Manufacturing Capacity Utilization Index (4)	78.6	%		79.5	%		78.9	%		79.5	%		78.9		%
Year-over-year Change in U.S. Carloadings (excl. intermodal) (5)	0.7	%		0.3	%		0.6	%		(0.3	) %		(0.3		) %
Year-over-year Change in U.S. Carloadings (chemical) (5)	(0.3	) %		(2.6	) %		(4.5	) %		(6.8	) %		—		%
Year-over-year Change in U.S. Carloadings (petroleum) (5)	11.1	%		10.5	%		9.6	%		12.3	%		(7.6		) %
Production Backlog at Railcar Manufacturers (6)	n/a (7)			58,680			59,878			56,062			59,698

_________
(1)	GATX's Lease Price Index (LPI) is an internally-generated business indicator that measures renewal activity for our North American railcar 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. The average renewal lease term is reported in months and reflects the average renewal lease term in the LPI.
	In the second quarter of 2023, we modified the methodology of the LPI calculation to more consistently reflect actual trends in renewal lease rates and renewal lease terms across the North American non-boxcar fleet. We believe this modification provides investors and other constituents with a more complete representation of lease rate and term performance. The prior period LPI metrics presented above have been updated to reflect the change in calculation. For further details, please see the GATX press release dated July 6, 2023.
(2)	The renewal success rate represents the percentage of railcars on expiring leases that were renewed with the existing lessee. The renewal success rate is an important metric because railcars returned by our customers may remain idle or incur additional maintenance and freight costs prior to being leased to new customers.
(3)	Excludes boxcar fleet.
(4)	As reported and revised by the Federal Reserve.
(5)	As reported by the Association of American Railroads (AAR).
(6)	As reported by the Railway Supply Institute (RSI).
(7)	Not available, not published as of the date of this release.

GATX CORPORATION AND SUBSIDIARIES SUPPLEMENTAL INFORMATION (UNAUDITED) (Continued)
	12/31/2023			9/30/2023			6/30/2023			3/31/2023				12/31/2022
Rail Europe Statistics
Fleet Rollforward
Beginning balance	29,102			28,759			28,461			28,005				27,701
Cars added	371			446			376			502				362
Cars scrapped/sold	(257	)		(103	)		(78	)			(46	)		(58	)
Ending balance	29,216			29,102			28,759			28,461				28,005
Utilization	95.9	%		96.0	%		96.9	%		98.5		%		99.3	%
Average active railcars	28,003			27,884			27,973			27,931				27,658
Rail India Statistics
Fleet Rollforward
Beginning balance	7,884			6,927			6,351			5,872				5,564
Cars added	921			957			576			479				308
Ending balance	8,805			7,884			6,927			6,351				5,872
Utilization	100.0	%		100.0	%		100.0	%		100.0		%		100.0	%
Average active railcars	8,321			7,366			6,584			6,038				5,703

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240123392135/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 was GATX Corporation's net income for the full year 2023?

GATX Corporation reported a net income of $259.2 million or $7.12 per diluted share for the full year 2023.

What is GATX Corporation's 2024 earnings guidance?

The company initiated 2024 earnings guidance of $7.30–$7.70 per diluted share.

What was the segment profit for Rail North America in the fourth quarter of 2023?

Rail North America reported segment profit of $66.7 million in the fourth quarter of 2023.

What was the segment profit for Rail International in the fourth quarter of 2023?

Rail International's segment profit was $34.4 million in the fourth quarter of 2023.

What is GATX Corporation's stock ticker symbol?

The stock ticker symbol for GATX Corporation is GATX.