Gatx Corporation · NYSE:GATX
Gatx — Debt Investor Presentation (March 2015)
40 slides from Gatx's debt investor presentation, Mar 24, 2015
Slide 1: Presentation to Fixed Income Investors March 2015
Presentation to Fixed Income Investors MARCH 2015 GATX Corporation Unless otherwise noted, GATX is the source for data provided
Slide 2: Forward-Looking Statements
2 NYSE: GMT Forward-Looking Statements Forward-looking statements in this presentation that are not historical facts are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These include statements that reflect our current views with respect to, a
Slide 3: GATX Corporation
3 GATX Corporation Now the largest global railcar lessor, GATX has been providing quality railcars and services to its customers for more than 115 years. History 1898 1919 2015 Founded as a railcar lessor Initiated quarterly dividends • Railcar leasing remains primary business • 96th consecutive yea
Slide 4: Leading Market Positions
4 Leading Market Positions Rail North America 66% Other 3% Asset Mix $7.6 billion NBV (assets on- and off-balance sheet) as of 12/31/14 Rail International 16% Portfolio Management 11% ASC(2) 4% Rail North America • Largest independent railcar lessor in North America • 2nd largest tank car lessor • D
Slide 5: Strong Global Presence
5 Owned 126,000 Affiliate 3,000 Managed 2,000 Total 131,000 Owned 22,000 GATX owns, manages or has an interest in approximately 154,000 railcars worldwide, making it the largest global railcar lessor. Strong Global Presence Fleet data as of 12/31/14 Early stage presence in India
Slide 6: GATX Worldwide Railcar Fleet
6 GATX Worldwide Railcar Fleet Refiners & Other Petroleum 30% Chemicals & Plastics 28% Railroads & Other Transports 17% Food & Agriculture 9% Mining, Minerals & Aggregates 6% Other 10% Industries Served Based on 2014 Rail North America & Rail International revenues of approximately $1.1 billion Gene
Slide 7: Creating Value through Railcar Leasing
7 • Provide superior service with safe, reliable equipment − Maintenance − Engineering − Training − Technology − Engagement with regulators and industry associations • Top-tier customer base • Maintain high utilization − Renew or assign leases over a railcar’s life, which exceeds 30 years − Average
Slide 8: Managing Through Cycles
8 Managing Through Cycles 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 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 17,000 LP I(2 ) d at a Rate change 9.9% 16.8% 13.5% 5.2% -11.0% -15.8% 6.9% 25.6% 34.5% 38.8% mid-
Slide 9: Maintaining Equipment to the Highest Standards
9 • GATX consistently provides safe, reliable equipment and superior service to help our customers achieve their business objectives • Tank cars are service-intensive assets − GATX is a full-service railcar lessor − Customers value the high-quality service GATX provides • Extensive maintenance netwo
Slide 10: Current Rail Market Environment
10 Current Rail Market Environment Rail North America • Strong demand across most car types −Fleet utilization more than 99% −Renewal success rate more than 85% −Renewal rate change of Lease Price Index nearly 40% Regulators expected to finalize new rules for the transportation of flammable liquid
Slide 11: American Steamship Company
11 American Steamship Company Capacity of US-flagged Vessel Operators* * GATX management estimate ASC 35% Interlake Steamship Company 23% Great Lakes Fleet, Inc. 20% Grand River Navigation 11% Central Marine Logistics 7% Other 4% Total annual industry capacity 105 million net tons • ASC provides tra
Slide 12: Portfolio Management Affiliates
12 Portfolio Management Affiliates • Spare aircraft engine leasing − Partner with Rolls-Royce plc − One of the largest spare aircraft engine portfolios in the industry • Marine − Partner with IMC Group − Five ocean-going, chemical parcel tankers Wholly owned marine assets • 500+ barges, tugs and tow
Slide 13: Portfolio Management Rolls-Royce and Partners Finance affiliates
13 Portfolio Management Rolls-Royce and Partners Finance affiliates (RRPF) • 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: GATX Financial Profile Overview
14 GATX Financial Profile Overview • Strong cash flow and committed future lease and loan receipts − Market leadership in railcar leasing business − History of increasing lease rates and extending terms in favorable markets − Credit strength of customer base • Flexible capital spending • Excellent l
Slide 15: Strong Operating Cash Flow and Portfolio Proceeds
15 Strong Operating Cash Flow and Portfolio Proceeds Strong Cash Flow in all Markets $293 $340 $364 $267 $244 $307 $370 $401 $449 $123 $247 $156 $68 $84 $154 $289 $385 $264 0 100 200 300 400 500 600 700 800 900 2006 2007 2008 2009 2010 2011 2012 2013 2014 $ in milli o n s Operating Cash Flow Portfol
Slide 16: Excellent Visibility into Future Cash Flow
16 Excellent Visibility into Future Cash Flow Nearly $4.2 billion in committed future lease and loan receipts $1,036 $770 $610 $492 $382 $866 0 200 400 600 800 1,000 1,200 2015 2016 2017 2018 2019 Thereafter $ in m ill io n s As of 12/31/14
Slide 17: Enduring Relationships with Strong Customers
17* Customer families sometimes include more than one customer account, therefore the S&P or equivalent ratings noted generally reflect the credit quality of the rated parent entity. Lease obligations of subsidiaries are not necessarily guaranteed by the rated parent entity. • Approximately 950 Rail
Slide 18: Flexible Capital Spending
18 Flexible Capital Spending $663 $491 $590 $676 $771 $921 $1,181 $582 0 200 400 600 800 1,000 1,200 1,400 2008 2009 2010 2011 2012 2013 2014 2015F $ in milli o n s Total Committed As of 12/31/14. Includes purchases of leased-in assets.
Slide 19: Strong Balance Sheet
19 Strong Balance Sheet 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 2014 BBB-/Baa3 BBB/Baa2 Total Recourse Debt = On-Balance-Sheet Recourse Debt + Off-Balance-Sheet Recourse Debt + Capital Lease Obligations
Slide 20: Diversified Access to Capital
20 Diversified Access to Capital 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: Consistent Issuer in the Debt Markets
21 Consistent Issuer in the Debt Markets Recent Financings • 2015 Financings − $650 million unsecured offering − $100 million 5-year notes − $300 million 10-year notes − $250 million 30-year notes • 2014 Financings − $850 million unsecured offering − $300 million 3-year notes − $250 million 5+-year
Slide 22: Balanced Future Debt Obligations
22 Balanced Future Debt Obligations GATX’s debt maturity schedule is well balanced $529 $639 $455 $508 $592 $1,480 0 200 400 600 800 1,000 1,200 1,400 1,600 2015 2016 2017 2018 2019 Thereafter $ in milli o n s As of 12/31/14
Slide 23: Financial Performance
23 $2.54 $3.07 $3.49 $1.97 $1.59 $2.01 $2.81 $3.50 $4.48 $5.15 – $5.35 13% 14% 15% 9% 7% 9% 11% 13% 15% ~17% 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 0.00 1.00 2.00 3.00 4.00 5.00 6.00 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015F R O E $ p er s h ar e EPS ROE Financial Performance • EPS and ROE excl
Slide 24: Summary
24 Summary • Market leader in railcar leasing business • Committed future lease receipts from strong and diversified customer base • Operational and geographic diversification • Capital spending flexibility • Solid and sustained customer relationships • Primarily long-lived, widely used railcar asse
Slide 25: Opportunity
25 Opportunity • 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 is benefitting from strength in the tank and freight car markets • GATX is making disciplined investments in North America and
Slide 26: Appendix
26 Appendix
Slide 27: Rail North America Industry Railcar Ownership
27 Rail North America Industry Railcar Ownership Lessors 50% TTX 10% Railroads 22% Shippers 18% Railcars are owned by lessors, railroads and shippers UMLER as of January 2015 North American Railcar Market Approximately 1.5 million railcars • Car ownership by railroads has been declining − In 2000, 5
Slide 28: Rail North America Industry Railcar Ownership
28 Rail North America Industry Railcar Ownership 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 either by lessors or shippers who use this car type • R
Slide 29: Rail North America Industry Shipments
29 Rail North America Industry Shipments Coal 20% Chemicals 14% Intermodal 13% Food/ Kindred 8% Farm Products 7% Auto 8% Metals 4% All Other 26% • 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. reven
Slide 30: Rail North America Industry Carloading Trends
30 Rail North America Industry Carloading Trends 15,000 16,000 17,000 18,000 19,000 20,000 21,000 22,000 2 00 0 2 00 1 2 00 2 2 00 3 2 00 4 2 00 5 2 00 6 2 00 7 2 00 8 2 00 9 2 01 0 2 01 1 2 01 2 2 01 3 2 01 4 17,061 • 2004-2006 rail traffic was driven by increased demand across most major commodity
Slide 31: Rail Industry North America
31 Rail Industry North America 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 2 0 1 4 GATX North American Fleet Utilization(2) (1) Railway Supply Institute (2) Excludes the b
Slide 32: Rail North America GATX's Fleet by Car Type
32 2% 15% 12% 10% 8% 5% 8% 7% 3% 15% 10% 5% Rail North America GATX’s Fleet by Car Type 1 2 3 4 5 6 7 8 9 11 General-Service Tank Cars: 13K - 19K gallon General-Service Tank Cars: 20K – 25K gallon General-Service Tank Cars: >25K gallon High-Pressure Tank Cars Other Specialty Tank Cars Gravity Covere
Slide 33: Rail North America GATX's Car Types & Typical Commodities
33 Rail North America GATX’s Car Types & Typical Commodities General-Service 13K-19K gallon 20K–25K gallon >25K gallon High-Pressure Other Specialty Covered Hoppers Gravity >4K cf Specialty Boxcars <4K cf Pneumatic OtherOpen-Top Cars sand cement roofing granules fly ash dry chemicals grain sugar fer
Slide 34: Rail International GATX Rail Europe
34 Rail International GATX Rail Europe (GRE) Petroleum Wagons 66% LPG Wagons 13% Chemical Wagons 13% Bulk Wagons 8% Fleet Structure Approximately 22,000 railcars as of 12/31/14 Germany 47% Poland 22% Austria 11% Hungary 3% Czech Republic 3% Slovakia 2% Other 8% Geographies Served Based on 2014 GRE r
Slide 35: Rail International GRE Car Types & Typical Commodities
35 Rail International GRE Car Types & Typical Commodities Tank Wagons Chemical WagonsLPG Wagons Bulk Wagons Petroleum Wagons light mineral oil products - gasoline - jet fuel - diesel oils - light heating oils dark mineral oil products - heavy heating oils - lubricating oils - coal tar - bitumen - as
Slide 36: A Leader in Tank Car Leasing
36 A Leader in Tank Car Leasing GATX 21% Union Tank Car 32% GE Railcar 9% Trinity 13% CIT 8% ARL 8% Other 9% North American Tank Car Leasing Market(1) (1) UMLER as of January 2015 (2) GATX management estimate Approximately 285,000 tank cars GATX Rail Europe 26% VTG 36% Ermewa 19% Other 19% European
Slide 37: Reconciliation of non-GAAP measures
37 Reconciliation of non-GAAP measures
Slide 38: Reconciliation of Non-GAAP Measures Net Income Measures
38 Reconciliation of Non-GAAP Measures Net Income Measures Net Income (millions) 2006 2007 2008 2009 2010 2011 2012 2013 2014 (in millions) Net income (GAAP) $147.3 $183.8 $194.8 $81.4 $80.8 $110.8 $137.3 $169.3 $205.0 Tax Adjustments (5.9) (20.1) (6.8) (7.4) (11.4) (8.9) (24.0) 11.7 Other Items: Re
Slide 39: Reconciliation of Non-GAAP Measures Balance Sheet Measures
39 Reconciliation of Non-GAAP Measures Balance Sheet Measures On- and off-balance-sheet assets 2014 (in millions) Consolidated on-balance-sheet assets $6,937.5 Off-balance-sheet assets 617.8 Total on- and off-balance-sheet assets $7,555.3
Slide 40: GATX Corporation
GATX Corporation