Gatx Corporation · NYSE:GATX
Gatx — Debt Investor Presentation (December 2014)
38 slides from Gatx's debt investor presentation, Dec 22, 2014
Slide 1: GATX Corporation Presentation to Fixed Income Investors December 2014
GATX Corporation Presentation to Fixed Income Investors December 2014 Unless otherwise noted, GATX is the source for data provided.
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements in this document may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbor provisions of t
Slide 3: GATX Corporation's history
GATX Corporation’s history 3 History 1898 Founded as a railcar lessor Initiated quarterly dividends • Railcar leasing remains primary business • 95th consecutive year of uninterrupted dividends 1919 2014 With the largest railcar lease fleet in the world, GATX has been providing quality railcars and
Slide 4: Solid business profile with leading market positions
Solid business profile with leading market positions 4 Rail North America Largest railcar lessor in North America 2nd largest tank car lessor Extensive maintenance network Rail International 2nd largest European tank car lessor 1st to obtain a wagon leasing license in India American Steams
Slide 5: Strong global presence
Owned* 128,000 Affiliate 4,000 Managed 1,000 Total 133,000 Owned 22,000 GATX owns, manages or has an interest in approximately 155,000 railcars* worldwide Strong global presence Rail North America & Rail International *Owned fleet data for North America reflects the acquisition of more than 18,500 b
Slide 6: GATX Worldwide Railcar Fleet
GATX Worldwide Railcar Fleet Rail North America & Rail International General Service Tank Cars 35% High Pressure Tank Cars 10% Specialty & Acid Tank Cars 8% Specialty Covered Hoppers 9% Gravity Covered Hoppers, 11% Open Top Cars, 9% Boxcars, 14% Other 4% Car Types 6 Approximately 150,000 wholly owne
Slide 7: Creating value through railcar leasing
Creating value through railcar leasing 7 •New and used •Car type, markets and customers served, timing of purchase and price are the key investment factors Buy long-lived assets •Repeatedly, maintaining high utilization • Top-tier customer base • Useful life of a railcar in excess of 30 years • Cycl
Slide 8: Managing lease terms through cycles
Managing lease terms through cycles 8 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Approximate # of railcars(1) scheduled for renewal 23,000 20,000 20,000 17,500 15,000 17,000 21,000 20,000 21,000 20,000 L P I( 2 ) d a ta Rate change 9.9% 16.8% 13.5% 5.2% -11.0% -15.8% 6.9% 25.6% 34.5% 30% – 35
Slide 9: Maintaining our equipment to the highest standards
Maintaining our equipment to the highest standards 9 Tank cars are service-intensive assets − GATX is a full-service lessor − Customers value the consistently reliable service GATX provides Extensive maintenance network in North America − Six major service centers − Five repair centers − Six cus
Slide 10: Current rail market environment
Rail North America Strong demand across most car types Acquired more than 18,500 boxcars for $340 million in March 2014 − Further diversified the fleet, customer base and end markets served − Improved boxcar fleet utilization from 78.8% at acquisition to 91.3% by the end of the third quarter U
Slide 11: American Steamship Company
American Steamship Company 11 Capacity of US flagged Vessel Operators Industry Total Annual Capacity* 105 Million Net Tons ASC 35% Great Lakes Fleet, Inc. 20% Van Enkevort Tug and Barge 2% Other, 2% * GATX management estimate Interlake Steamship Company 23% Grand River Navigation 11% Central Marine
Slide 12: Portfolio Management
Portfolio Management 12 Marine 55% Marine Affiliate 6% Aircraft Engine Leasing Affiliates 34% Other 5% Owned Portfolio Affiliates Spare aircraft engine leasing − Partner with Rolls-Royce plc − Largest spare aircraft engine portfolio in the industry Marine − Partner with IMC Group − five ocean-go
Slide 13: Portfolio Management: Rolls-Royce and Partners Finance affiliates
Portfolio Management Rolls-Royce and Partners Finance affiliates (“RRPF”) 13 GATX established its first partnership with Rolls-Royce plc in 1998 Lease spare aircraft engines to commercial airlines and Rolls-Royce plc −One of the largest spare aircraft engine portfolios in the industry, with more
Slide 14: Financial Profile Overview
Financial Profile Overview Strong cash flow and contracted revenue – Market leadership in railcar leasing business – Credit strength of customer base Flexible capital spending Solid liquidity – $575 million committed credit facility matures in 2019 – Access to capital is well diversified Str
Slide 15: Strong Operating Cash Flow and Portfolio Proceeds
Financial Profile 15 Strong Operating Cash Flow and Portfolio Proceeds $293 $340 $364 $267 $244 $307 $370 $401 $123 $247 $156 $68 $84 $154 $289 $385 0 50 100 150 200 250 300 350 400 450 2006 2007 2008 2009 2010 2011 2012 2013 $ i n m il li o n s Operating Cash Flow Portfolio Proceeds Continuing oper
Slide 16: Nearly $3.9 billion in committed future lease and loan receipts
Financial Profile Nearly $3.9 billion in committed future lease and loan receipts $1,008 $741 $572 $430 $334 $783 0 200 400 600 800 1,000 1,200 2014 2015 2016 2017 2018 Thereafter $ i n mil lion s as of 12/31/13 16
Slide 17: GATX maintains relationships with high-quality customers
Financial Profile 17 GATX maintains relationships with high-quality customers AAA & AA, 10% A 22% BBB 36% BB or < 12% Top 50 Customer Families Data as of 12/31/13 Customer families sometimes include more than one customer account, therefore the S&P or equivalent ratings noted generally reflect the c
Slide 18: Capital Spending
Capital Spending $663 $491 $590 $676 $771 $921 $1,167 $557 0 200 400 600 800 1,000 1,200 1,400 2008 2009 2010 2011 2012 2013 2014F 2015F Total Committed 18 As of 9/30/14. Includes purchases of leased-in assets. $ i n mil lion s
Slide 19: Strong Balance Sheet
Strong Balance Sheet 19 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 0.0x 1.0x 2.0x 3.0x 4.0x 5.0x 6.0x 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 BBB-/Baa3 BBB/Baa2 Total Recourse Debt = On Balance Sheet Recourse Debt + Off Balance Sheet Recourse Debt + Capital Lease Obligations + Com
Slide 20: Diversified Access to Capital
Diversified Access to Capital 20 GATX will continue to utilize its traditional sources to meet its financing needs: Unsecured commercial paper Unsecured notes Unsecured bank term loans Secured rail debt
Slide 21: Financings and Liquidity
Financings and Liquidity 21 2014 Financings – $850 million unsecured offering • $300 million 3 year notes • $250 million 5+ year notes • $300 million 30 year notes – $250 million unsecured offering of 5+ year notes – $100 million private placement of 10 year unsecured floating rate notes 2013 Fi
Slide 22: Debt Maturities
Debt Maturities Annual maturities of GATX’s long-term debt obligations as of 9/30/14. Excludes $250 million 2.60% Senior Notes due 2020 issued in October 2014. $38 $551 $647 $462 $514 $1,895 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2014 2015 2016 2017 2018 Thereafter $ i n mil lion s 22
Slide 23: Financial Results
Financial Results 23 $2.54 $3.07 $3.49 $1.97 $1.59 $2.01 $2.81 $3.50 12.8% 14.1% 15.4% 8.5% 6.7% 8.5% 11.3% 12.5% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00 2006 2007 2008 2009 2010 2011 2012 2013 2014F R O E $ p e r s h a
Slide 24: Summary
Summary Market leader in railcar leasing business Contracted revenue from strong and diversified customer base Operational and geographic diversification Capital spending flexibility Solid and sustained customer relationships Primarily long-lived, widely used railcar assets High market value of asse
Slide 25: Opportunity
Opportunity 25 GATX has been a market force in the rail industry for more than 115 years GATX provides premium assets and services to a high-quality customer base GATX continues to benefit from strength in the tank car market, and is seeing broad improvement in the freight car market GATX is
Slide 26: Appendix
26 Appendix
Slide 27: Rail North America Industry Railcar Ownership
Rail North America Industry Railcar Ownership 27 Railroads 23% TTX 10% Shippers 18% North American Railcar Market Railcars are owned by lessors, railroads and shippers Source: UMLER as of January 2014 Approximately 1.5 million railcars Car ownership by railroads has been declining − In 2000, 53% o
Slide 28: Rail North America Industry Railcar Ownership
Rail North America Industry Railcar Ownership 28 0 50 100 150 200 250 300 350 400 450 500 Intermodal Box Cars Flat Cars Tank Cars Open Top Cars Covered Hoppers Lessor owned TTX Railroad owned Shipper owned 000s of railcars Tank cars are owned by lessors such as GATX, or shippers who utilize this c
Slide 29: Rail North America Industry Shipments
Rail North America Industry Shipments 29 Coal 20% Auto 8% Metals 4% Farm products 7% Food/ Kindred products 8% Key commodity markets for North American Class I railroads include − Coal − Chemicals − Intermodal The chart at the left is based on Class I U.S. revenues − The same chart based on tons
Slide 30: Rail North America Industry Carloading Trends
Rail North America Industry Carloading Trends 30 15,000 16,000 17,000 18,000 19,000 20,000 21,000 22,000 17,061 2004-2006 rail traffic was driven by increased demand across most major commodity types Decline in 2007-2008 carloads reflect difficulties in nearly every sector Carloadings in 2009
Slide 31: Rail Industry North America
Rail Industry North America 31 80% 82% 84% 86% 88% 90% 92% 94% 96% 98% 100% 1 9 9 8 1 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 3 Q 1 4 GATX North American Fleet Utilization(2) (1) Railway Supply Institute (2) Excludes the b
Slide 32: Rail North America Car Types & Typical Commodities
Rail North America Car Types & Typical Commodities 32 General Service 13K-19K gallon 20K-25K gallon >25K gallon High Pressure Acid & Specialty T a nk C a rs molten sulfur clay slurry caustic soda corn syrup liquid fertilizers fuel oils asphalt food-grade oils chemicals (sodium hydroxide, styrene, et
Slide 33: Rail International GATX Rail Europe
Rail International GATX Rail Europe (“GRE”) 33 LPG Wagons 12% Bulk, 6% Geographies Served Fleet Structure Based on 2013 GRE revenues Approximately 22,000 railcars as of 12/31/13 Poland 23% Austria 11% Hungary 4% Switzerland 4% Slovakia 3% Other 10% Germany 42% Czech Republic 3% Petroleum Wagons 70%
Slide 34: Rail International GRE car types & typical commodities
Rail International GRE car types & typical commodities 34 Petroleum Wagons LPG Wagons Chemical Wagons Tank C a rs light mineral oil products - gasoline - jet fuel - diesel fuel dark mineral oil products - heavy fuel oil - tar - bitumen propane butane propylene butadiene light carbohydrate fractions
Slide 35: A leader in tank car leasing
A leader in tank car leasing North American Tank Car Leasing Market(1) GATX 22% Union Tank Car 33%Trinity 13% GE Railcar, 9% CIT, 7% ARL, 7% Other, 9% European Tank Car Leasing Market(2) GATX Rail Europe 26% VTG 36% Ermewa 19% Other 19% 35 Approximately 77,000 tank cars Approximately 270,000 tank ca
Slide 36: Reconciliation of non-GAAP measures
36 Reconciliation of non-GAAP measures
Slide 37: Reconciliation of non-GAAP measures
Reconciliation of non-GAAP measures 37 Earnings per Share 2006 2007 2008 2009 2010 2011 2012 2013 Diluted earnings per share (GAAP) 2.64$ 3.43$ 3.88$ 1.70$ 1.72$ 2.35$ 2.88$ 3.59$ Tax Adjustments (0.10) (0.36) (0.13) (0.15) (0.24) (0.19) (0.50) (0.24) Other Items: Realized/unrealized (gains)/losses
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