Gatx Corporation · NYSE:GATX
Gatx — Debt Investor Presentation (May 2003)
45 slides from Gatx's debt investor presentation, May 8, 2003
Slide 1: AFSA May 8, 2003
AFSA May 8, 2003 NYSE: GMT
Slide 2: Forward-Looking Statements
GAIX NYSE: GMT FORWARD-LOOKING STATEMENTS Certain statements within this document may com tte forrand-looking sttemanis made pursuant to the safe habor povsion of the Private Secuites Litigation Reform Act of 1995. These statements are identified by words suchas “anticipate,” “believe,” “estimale,”“
Slide 3: Highlights
Highlights Leadership positions in our markets Quality pool of long-lived assets Significant cash flow generation Solid liquidity position Generating significant savings from cost reduction initiatives Company positioned to leverage upside when markets improve
Slide 4: Asset Mix
Asset Mix Rail Air Information Technology Specialty Venture Other 47 26 8 12 3 4 Largest lessor of tank cars in North America; 105 year history One of the largest commercial aircraft operating lessors worldwide; 35 year history One of the largest independent IT lessors; 20 year history Owned Assets
Slide 5: Credit Ratings
Credit Ratings S&P Long-term debt: BBB- CP: A-3 Outlook: Stable Moody's Long-term debt: Baa3 CP: Prime-3 Outlook: Negative
Slide 6: Rail
Rail Air Technology Specialty Venture by NBV 47 26 8 12 3 Rail 47% Rail GATX's largest, most valuable franchise Effectively managing through down cycle Positioning business for the future Recent fleet activity suggests recovery
Slide 7: Managing through the Cycle - Utilization
GATX Utilization 1987 90.6 1988 93.2 1989 94.7 1990 94.7 1991 92.9 1992 92.2 1993 93 1994 95 1995 94.5 1996 95 1997 96.4 1998 95.6 1999 94.6 2000 92.5 2001 91 2002 91 1Q '03 92 Source: GATX Rail (North American Owned Fleet) % Maintaining asset utilization Improvement to 92% in 1Q'03 Pricing pressure
Slide 8: Encouraging Developments
1994 1995 1996 1997 1998 1999 2000 2001 2002 Tank Car Backlog 1583 1622 1565 1622 1602 1543 1521 1444 1479 Encouraging Developments Chemical Shipments Chemical shippers account for 35% of revenues at GATX Rail Chemical carloadings increased 2.4% in 2002 and 4% in Q1 '03 Railcar Manufacturing New car
Slide 9: Rail Focus
Rail Focus Capitalize on position in North American market New car additions Fleet acquisitions Strengthen differentiation Services, asset/market knowledge, innovation Enhance efficiency Cost, quality, safety Optimize existing fleet Expand and coordinate European presence Capitalize on economic reco
Slide 10: Air
Rail Air Technology Specialty Venture by NBV 47 26 8 12 3 Air 26% Air One of the largest commercial aircraft operating lessors/managers worldwide Portfolio well suited for current market conditions Focus on narrowbody aircraft Weighted average age of aircraft portfolio is 5 years Utilization at 99%
Slide 11: Business: Owned and Managed
Business: Owned and Managed Owned Aircraft (196) Owned aircraft are a mix of type/class Majority of aircraft held in partnerships High utilization 48 aircraft are 100% owned by GATX 62 aircraft are owned in Pembroke Group Managed Aircraft (105) Management Role: Administer Portfolio Cash Management A
Slide 12: Aircraft Investment by Type and Region
NBV of Owned Aircraft as of 3/31/03 Aircraft Investment by Aircraft Type A320 Family B737 Family B757 MD-80/DC-9 B717 Regionals Fokker Other East 48 35 8 3 2 1 1 2 All chart data net of non-recourse debt NBV of Aircraft on Lease as of 3/31/03 Aircraft by Region Europe South America North America Asi
Slide 13: Aircraft Utilization
NBV of Owned Aircraft as of 3/31/03 Excludes Pembroke Group Utilization Aircraft on Ground - Available 2 x A320-200 1 x A321-200 1 x MD-83 AOG - LOI AOG - Available On Lease 0 1.23 98.77 AOG-Available 1.23% On Lease 98.77%
Slide 14: Air Focus
Air Focus Effectively manage renewal calendar and order book Maintain high utilization Expand managed fleet Expand advisory services
Slide 15: Information Technology
Rail Air Information Technology Specialty Venture by NBV 47 26 8 12 3 Information Technology 8% Technology One of the largest independent IT equipment lessors IT equipment leasing with life cycle management Portfolio characterized by diversification across customers and equipment types Focused on fi
Slide 16: IT Spending Trends
2000 2001 2002 2003 2004 2005 2006 Hardware 176 148 140 139 134 126 123 Software 97 102 113 125 137 147 150 Source: IDC Black Book, 2001 IT Spending Trends (North America) $273 $250 $253 $264 $271 $273 $273 Although annual IT spending is down and the outlook for growth is modest, this remains a very
Slide 17: GATX Equipment Portfolio and Customer Profile
Data Processing Business Services Banking/Finance Retail Manufacturing Other TECH 21 19 18 9 9 24 PC/Client Server Mid-Range Communications Other Mainframe TECH 40.2 25.8 7.8 24.4 1.8 GATX Equipment Portfolio A broad range of IT equipment Leading Manufacturers such as: IBM HP Dell Portfolio Mix as o
Slide 18: Near-term and Long-term Outlook
Near-term Outlook Discretionary technology spending down Focus on volume generation Pursue portfolio acquisitions aggressively Improve operating efficiency Strengthen customer service and relations Long-term Outlook IT solutions drive productivity and profit Economic recovery expected to lead to ren
Slide 19: Financial Profile
Financial Profile
Slide 20: Earnings per Share
1998 1999 2000 2001 2002 Earnings per Share 2.62 3.01 1.37 3.51 0 Excludes significant one-time items and air impairments 3.37 2.23 1.34 $ per Share Income per Share
Slide 21: Cash Flow from Continuing Operations plus Portfolio Proceeds
1998 1999 2000 2001 2002 Cash from Operations plus Portfolio Proceeds 1103 792 1029 1389 1323 Millions Cash Flow from Continuing Operations plus Portfolio Proceeds
Slide 22: 2002 Financing Highlights
2002 Financing Highlights Continued strong cash flow from continuing operations and portfolio proceeds of $1.3 billion Repaid $1.2 billion of maturing debt and invested over $1.2 billion Completed over $1.5 billion of financing in 2002
Slide 23: 2002 Financing Activity
Financing Plan Actual Result Convertible bond Done - $175 Unsecured bond Done - $250 Bank facility Done - $145 EXIM/ECA financing Done - $524 Total ECA financing at $720 mm Approved Total EXIM financing at $387 mm Approved Aircraft bridge facility Done - $75 Aircraft warehouse facility Done - $142 S
Slide 24: 2003 & 2004 Financing
2003 & 2004 Financing Available total liquidity approximately $1 billion at 3/03 EXIM/ECA financing for aircraft ($215 mm) May '03 Bank Facility 2003 Financing Plan ECA financing for aircraft ($185 mm) 2004 Financing Plan
Slide 25: Liquidity - Cash Forecast
Forecast Forecast $ millions 2003 2004 Committed Investment Volume and Capex 516 306 Short-term Debt Maturities 76 0 Recourse Debt Maturities 637 325 Non-recourse Debt Maturities 205 127 Lease Payments 209 212 Assumed Dividends* 64 64 Cash Outflows 1,708 1,034 Portfolio Proceeds and Cash from Operat
Slide 26: Credit Statistics
$ millions 1Q'03 2002 2001 2002 Total assets, excluding cash* $7,281 $7,429 $7,120 $6,805 Reservable assets 1,149 1,245 1,552 1,521 Financial Services investments 2,851 2,901 2,883 2,604 Allowance for losses 97 82 94 95 as % of reservable assets 8.4% 6.6% 6.1% 6.3% Net charge-offs and asset impairme
Slide 27: Credit Summary
Credit Summary GATX exhibits strong credit characteristics: Stable cash flow and contracted revenue Credit strength of underlying customer base Market leadership in core businesses Liquid/highly marketable asset base Solid liquidity position
Slide 28: Outlook and Objectives
Outlook and Objectives Focus on strengths of core franchise businesses Rail: Maintain strong North American position; capitalize on European presence and opportunities Air: Focused on fleet utilization; asset management Technology: Well-positioned for improved IT spending cycle; portfolio acquisitio
Slide 29: Appendix
Appendix
Slide 30: Income from Continuing Operations
*Before cumulative effect of accounting change 1998 1999 2000 2001 2002 Income from Continuing Operations 114.2 126.3 30.8 7.5 29 Income from Continuing Operations Millions * Financial Performance
Slide 31: Investment Volume
1998 1999 2000 2001 2002 Investment Volume 1236 1606 1897 1791 1272 Millions Financial Performance Investment Volume
Slide 32: Leverage
Recourse Debt / (Equity + Loss Reserves) Leverage 2000 2001 2002 2003E GATX 5.5 4.46 5 5.1
Slide 33: Coverage
2000 2001 2002 2003F 2.7 2.75 2.5 2.44 EBITDAR/Adjusted Interest (a) (a) EBITDAR excludes share of affiliates' earnings. Adjusted interest includes interest on off-balance sheet debt. Adjusted for non-comparable items. Coverage
Slide 34: Cash Flow Strength
2003 2004 2005 2006 2007 Thereafter 922.3 649.2 424.2 264 177.8 484.9 Cash Flow Strength $922 million or roughly 74% of 2003 forecasted revenues are contracted Minimum Future Receipts
Slide 35: Air Update April, 2003
NYSE: GMT Air Update April, 2003
Slide 36: Business: Owned and Managed
Business: Owned and Managed Owned Aircraft (196) Owned aircraft are a mix of type/class Majority of aircraft held in partnerships High utilization 48 aircraft are 100% owned by GATX 62 aircraft are owned in Pembroke Group Managed Aircraft (105) Management Role: Administer Portfolio Cash Management A
Slide 37: Aircraft Investment by Aircraft Type
NBV of Owned Aircraft as of 3/31/03 Aircraft Investment by Aircraft Type Aircraft exposure is primarily in modern narrowbody fleet 100% Stage III compliant Average Age = 9 years Weighted Average Age = 5 years A320 Family B737 Family B757 MD-80/DC-9 B717 Regionals Fokker Other East 48 35 8 3 2 1 1 2
Slide 38: Age Distribution (Existing Owned Aircraft)
Age Distribution (Existing Owned Aircraft) Excludes Pembroke Group as of 3/31/03 Less than 2 Years 2-5 Years 6-10 Years 11-15 Years 16-20 Years >20 Years Total Number of Aircraft 19 34 17 32 29 3 134 $ Net Book Value 784.0 $ 458.3 $ 176.8 $ 261.0 $ 112.3 $ 16.3 $ 1,808.6 $ as % of Existing NBV 41.4%
Slide 39: GATX's Aircraft Investments vs. Aircraft Stored Worldwide
Source: Airclaims CASE Database & GATX GATX's Aircraft Investments vs. Aircraft Stored Worldwide
Slide 40: Regional Exposure
Regional Exposure NBV of Aircraft on Lease as of 3/31/03 Aircraft by Region Geographically diverse Diversified among air carriers (both scheduled and charter) Leases to 64 airlines worldwide Europe South America North America Asia Middle East Africa Australia East 49 13 12 10 14 1 0.5
Slide 41: Top Five U.S. Aircraft Customers
As of 3/31/03 Top Five U.S. Aircraft Customers
Slide 42: Aircraft Utilization
NBV of Owned Aircraft as of 3/31/03 Excludes Pembroke Group Utilization Aircraft on Ground - Available 2 x A320-200 1 x A321-200 1 x MD-83 AOG - LOI AOG - Available On Lease 0 1.23 98.77 AOG-Available 1.23% On Lease 98.77%
Slide 43: Renewal Schedule - Number of Aircraft
Excludes Pembroke Group Remaining Renewal Schedule Aircraft Type 2003 2004 2005 2006 737-200 2 737-300 3 2 737-800 4 3 3 747-300 1 757-200 3 A300-B4-200F 1 A319-100 1 A320-200 1 6 6 ** 13 A321-100 2 A321-200 2 * 3 ERJ-145LR 1 MD-82 1 Dash-8 1 Number A/C 4 17 18 20 NBV (millions) $13.0 206.0 222.6 30
Slide 44: Order Book
Order Book Airbus A320 Family Lease LOIs In Documentation Available Boeing 737 Family Lease LOI J In Documentation Available Total 46
Slide 45: NYSE: GMT
NYSE: GMT