Slide 1: GATX Corporation AFSA May 12, 2004
GATX Corporation AFSA May 12, 2004 NYSE: GMT
Slide 2: Forward-Looking Statements
NYSE: GMT Forward-Looking Statements Certain statements within this document may constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These statements are identified by words such as "anticipate," "believe," "estima
Slide 3: Asset Mix
Asset Mix GATX is a specialized finance and leasing company combining asset knowledge and services, structuring expertise, partnering, and capital to serve customers and partners worldwide Rail Air Technology Specialty Corporate/Other by NBV 50 28 8 8 6 $7.2 billion NBV (on and off balance sheet) as
Slide 4: 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: Stable
Slide 5: 2001-2003 Operating Environment: Unprecedented Challenges
2001-2003 Operating Environment Unprecedented Challenges Macro Level Economic Downturn Impact of 9/11 High profile corporate malfeasance Iraq war Capital market volatility and rising funding costs GATX Specific Issues Immediate and lingering impact of 9/11 on air industry Weakest rail market in over
Slide 6: 2001-2003 Operating Environment
2001-2003 Operating Environment GATX aggressively pursued a combination of near-term steps and long-term strategic initiatives to position the company for the future
Slide 7: 2001-2003: Near-term Steps
2001-2003: Near-term Steps Maintained/improved asset utilization in air and rail Strengthened balance sheet and liquidity Reduced leverage; carried excess liquidity Completed over $2 billion of financing Stabilized credit rating situation Maintained investment grade rating during volatile period; st
Slide 8: 2001-2003: Long-term Strategic Initiatives
2001-2003: Long-term Strategic Initiatives Sold GATX Terminals Exiting Venture Curtailing Specialty Selling GATX Technology Services Rail Fleet acquisitions Committed purchase program Acquired DEC and KVG; integrating European platform Air Stabilized current portfolio; now positioned to pursue new i
Slide 9: Rail
Rail GATX's largest franchise Market is improving; magnitude varies by sector New car order backlog up, car availability tighter, lease rate pressure continues but abating Europe contributing meaningfully Contractual nature of the business points to gradual pace of Rail's earnings recovery
Slide 10: GATX Worldwide Fleet
GATX Worldwide Fleet Tank Cars Covered Hoppers Boxcars & Gondolas Other Freightcars Intermodal Worldwide Fleet 54 18 12 9 7 152,000 railcars Owned & Interest In as of 12/31/03
Slide 11: Chemical Shipments
Chemical Shipments Chemical shippers account for 35% of revenues at GATX Rail Chemical car loadings up 3.3% year to date 1995 1996 1997 1998 1999 2000 2001 2002 2003 YTD 2004 Chemical Carloads 0.025 -0.035 0.036 -0.012 -0.037 -0.014 -0.051 0.024 0.011 0.033 Source: Association of American Railroads
Slide 12: Railcar Manufacturing Backlog
Railcar Manufacturing Backlog 1998 1999 2000 2001 2002 2003 2004 63453 55680 30825 19991 6443 24055 41392 63120 43456 28176 14452 9281 33383 69858 36811 26218 11888 14491 31858 Tank Car Backlog 66390 33142 22648 8089 18402 33967 New car orders strengthened in 2003 and Q1 2004 2004 production forecas
Slide 13: GATX Fleet Utilization
GATX Fleet Utilization Aggressive scrapping Pro-active marketing/sales initiatives Improved environment/Order backlog rising 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 1Q'04 Utilization 0.91 0.93 0.95 0.95 0.93 0.92 0.93 0.95 0.95 0.95 0.96 0.95 0.94 0.92 0.
Slide 14: Fleet Rollover Effect
Fleet Rollover Effect Average initial lease term is 5 years Only a portion of railcars up for renewal each year 26,000 cars renewed in 2003 25,000 estimated for 2004 Lease rate changes move through fleet slowly due to contractual nature of business Earnings improvement is expected to be gradual
Slide 15: Rail: Improving Environment Coupled with Long-term Strengths
Rail Leading position in North American tank car sector Major presence in and growing contribution from European operations Stronger market generates secondary market opportunities Strengthened customer relationships and exhibited commitment to marketplace during downturn Improving Environment Coupl
Slide 16: Air
Air One of the largest commercial aircraft operating lessors/managers worldwide Portfolio well suited for current market conditions Geographically diverse customer base Effectively managing renewal schedule 14 of 15 renewals for 2004 complete Limited new order book All 3 deliveries placed for 2004;
Slide 17: Aircraft Investment by Aircraft Type
Aircraft Investment by Aircraft Type A320 Family B737 Family B757 MD-80 Family B717 Regionals Other NBV of Owned Aircraft 52 35 8 1 2 1 1 Aircraft exposure is primarily in modern, narrowbody fleet 100% Stage III compliant Average Age = 9 years Weighted Average Age = 6 years Exposure to "parked" airc
Slide 18: GATX's Aircraft Investments vs. Aircraft Stored Worldwide
GATX's Aircraft Investments vs. Aircraft Stored Worldwide Aircraft Boeing 727 Boeing 767 Dash-8 Boeing 747 Boeing 737 (JT8D) BAE 146 Fokker 100 MD-80 Airbus A310 Airbus A300 Embraer ERJ-145 Airbus A319 Boeing 717 Boeing 737 (CFMI) Airbus A321 Boeing 757 Boeing 737 (NG) Airbus A320 Units in Storage W
Slide 19: Aircraft by Region
Aircraft by Region Europe South America North America Asia Middle East Africa East 0.47 0.18 0.09 0.09 0.16 0.01 Geographically diverse Diversified among air carriers (both scheduled and charter) Leases to 59 airlines worldwide Regional Exposure NBV of Aircraft on Lease as of 3/31/04
Slide 20: Utilization
Utilization On Lease Under Letter of Intent Utilization 0.9697 0.0303 NBV of Owned Aircraft as of 3/31/04 Excludes Pembroke Group
Slide 21: Air: Worldwide RPMs and Traffic Growth
Air 1970 1980 1990 1995 2000 2003P 2005E Worldwide RPMs 303 647 1159 1121 1266 1297 1407 1563 1689 1767 1814 1911 2058 2002 2005 1975 2153 2314 Traffic Growth Rates: 1991-2000: 5.9% 2001-2010: 4.2% 2011-2020: 5.1% Source: Airline Monitor and ICAO
Slide 22: Air: Improving Environment Coupled with Long-term Strengths
Air 35+ years of experience; deep asset and market knowledge Network of quality partners Proven commitment to industry through cycles Extensive customer relationships throughout the world Scaleable aircraft management and advisory capabilities Improving Environment Coupled with Long-term Strengths:
Slide 23: Additional Opportunities
Additional Opportunities Select investments - Marine Actively pursuing; asset valuations have risen sharply Secondary market portfolio acquisitions Rail, air, and diversified equipment sectors Continued cost reduction/efficiency gains Simplified operating structure yields benefits Improve credit rat
Slide 24: Financial Highlights
Financial Highlights NYSE: GMT
Slide 25: Financial Results
Financial Results 1999 2000 2001 2002 2003 Cash from Continuing Operations 273 398 373 416 408 Portfolio Proceeds 518 628 1026 883 760 Cash flow and portfolio proceeds remained strong
Slide 26: Net Charge-offs & Impairments and Allowance for Possible Losses
Net Charges Offs & Impairments and Allowance for Possible Losses as % of Reservable Assets 2000 2001 2002 2003 1Q'04 Net Charge-offs & Impairments 41.6 187.8 94.4 67.2 1.9 Allowance for Possible Losses as % of Reservable Assets 0.063 0.061 0.066 0.061 0.064
Slide 27: Recourse Leverage
Recourse Leverage 1999 2000 2001 2002 2003 Adjusted Recourse Debt/Equity + Loss Reserves 4.2 5.3 4.3 5 4.4 Adjusted Recourse Debt/Equity + Loss Reserves
Slide 28: Financings and Liquidity
Financings and Liquidity 2002 2003 2004P Convertible bond $ 175 $ 125 $ --- Unsecured bond 250 150 --- Bank facility 145 140 500 EXIM/ECA financing 524 215 112 Aircraft bridge facility 75 --- --- Aircraft warehouse facility 142 --- --- Secured Rail facility 86 --- --- Rail CP conduit securitization
Slide 29: Summary
Summary Tested in recent years, but strengths of the company were proven Excellent asset base Strong market position Deep asset expertise Financially adept Skilled and dedicated employees Exiting a period of volatility Entering a period of stability and growth We are focused on asset, investment vol
Slide 30: Appendix
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Slide 31: Allowance for Possible Losses as a Percentage of Reservable Assets
GATX Conporation NS i ee Linking: People Assets Opporuiies Appendic 1 GATX Corporation Allowance for Possible Losses as a Percentage of Reservable Assets Dollars in Mibtions 2000 2001 2002 2003 1gos Allowance for Possible Losses 952 M42 822 516 401 Reservable Assets saa 15520 12450 2452 7681 Allowan
Slide 32: Recourse Leverage
NS i ee Linking! People Assets Opporumities Abpendise 2 GATX Comporation Recoume Leverage Dollarsin Miltons 1999 2000 2001 202 2003 Baance Sheet Debt $30572 $45005 $4170 4.2399 $3,098 Less: Non-Recousse Debt aa 48H.) HS Of-Balance Sheet Debt PV 104 - Recouse) 62 100733018 «TRG Less: Untesticted Cash