Gatx Corporation · NYSE:GATX
Gatx — Wells Fargo Industrials Conference 2021
55 slides from Gatx's conference presentation, May 5, 2021
Slide 1: Wells Fargo Industrials Conference 2021
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements in this presentation 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 c
Slide 3: GATX's 123-Year History
GATX’s 123-Year History Began manufacturing railcars e Established as Initiated railcar lessor with quarterly 28 railcars dividend e e $8.9B in assets Began Exited Formed Rolls-Royce Began rail & ~149K wholly listing on railcar & Partners Finance investments in owned railcars the NYSE manufacturing
Slide 4: GATX Today - Business Segments
GATX Today - Business Segments RAIL NORTH AMERICA Premier railcar lessor Diversified fleet of over 118,000 railcars Strong customer credit quality, diversification in car types and commodities carried $2.4 billion of contractual lease receipts as of 12/31/2020 RAIL INTERNATIONAL ™ GATX Rail Europe (
Slide 5: Rail North America Revenue Mix
*Excludes boxcar fleet Based on 2020 Rail North America Revenue
Slide 6: Straightforward and Proven Business Model
Straightforward and Proven Business Model BUY LEASE SERVICE MAXIMIZE the railcar at an the railcar to a the railcar ina the value of the economically attractive quality customer at manner that railcar by selling or and competitively an attractive rate for maximizes safety, scrapping at the advantage
Slide 7: North American Railcar Industry Data
T H O U S A N D S Association of American Railroads
Slide 8: Railcar Market Trends
Railway Supply Institute as of April 2021
Slide 9: Lease Price Index and Renewal Success Rate
*Excludes boxcar fleet LPI = Lease Price Index: The average renewal lease rate change is reported as the percentage change between the average renewal lease rate and the average expiring Renewal Success Rate: The percentage of expiring leases that were renewed with the existing lessee. As of 12/31/2
Slide 10: GATX Strategy in Today's Environment
GATX Strategy in Today’s Environment Operate the Business Safely and Efficiently + Maintain a safe and healthy work environment * Continue to maintain fleet to meet customer needs — All owned facilities are fully operating Practice a Disciplined Capital Allocation Strategy + Place new cars from long
Slide 11: Rail International Overview
Based on 2020 Rail International Fleet Count
Slide 12: GATX Rail India
management expertise to generate competitive advantages and premium customer services Serving customers in the automotive, container, steel, cement, and bulk commodities transport sector High fleet utilization (99%-100%) with average remaining lease term of 6 years Actively seeks attractive investme
Slide 13: Rolls-Royce and Partners Finance Portfolio
$706.1M NBV Based on NBV of approximately $4.8B; portfolio As of 12/31/2020
Slide 14: RRPF Liquidity and Lease Maturities
Long-dated debt maturity profile and commitment to preserving cash and maintaining strong liquidity Consistent effort to ladder lease maturities by volume and engine type Efficiently managing customer requests for financial relief due to impacts of COVID-19 Low operating cost base and full discretio
Slide 15: Segment Financial Overview
*Includes finance leases As of 12/31/2020
Slide 16: 2020 Key ESG Initiatives and Accomplishments
2020 Key ESG Initiatives and Accomplishments Independent Board Oversight Human Capital Management = Continued to increase female representation in senior management roles Health & Safety = As participants in an essential industry, intense focus on COVID-19 prevention/response = Engaged in Transporta
Slide 17: Debt Maturity Profile
$942 $725 $533 $367 $199 $231 2021 2022 2023 2024 2025 Thereafter $ M IL L IO N S *2017-2020 reflects continuing operations. Information for 2016 and prior has not been recast for discontinued operations presentation. As of 12/31/2020
Slide 18: Investment Volume and Cash Flow
*2017-2020 reflects continuing operations. The information for 2016 and prior has not been recast for discontinued operations presentation **Investment volume and non-cash items
Slide 19: Total Recourse Debt and Leverage
*Total Recourse Debt = On-Balance Sheet Recourse Debt + Off-Balance Sheet Recourse Debt + Capital Lease Obligations + Commercial Paper and Bank Credit Facilities, Net of Unrestricted Cash (In accordance with the new lease accounting standard, off-balance sheet assets and recourse debt are no longer
Slide 20: Dividends and Share Repurchases
*No share repurchases were completed during 2020
Slide 21: Earnings and Per-Share Results
*2017-2020 reflects continuing operations. The information for 2016 and prior has not been recast for discontinued operations presentation. **Non-GAAP - excludes tax adjustments and other items. See Reconciliation of Non-GAAP Measures.
Slide 22: Slide 22
Slide 23: GATX Investment Highlights
GATX Investment Highlights Disciplined Management Team Long-term focused and experienced in managing across business cycles Leading Market Position in majority of the markets we operate globally Superior Asset Allocation Highly diversified railcar fleet with ~160 car types serving nearly 600 commodi
Slide 24: Business Model: BUY
Business Model: BUY DISCIPLINED INVESTMENT APPROACH COMPETITIVE ASSET COST GATX achieves lower new car costs by placing large orders at $800 appropriate points in the business cycle GATX NORTH AMERICAN RAIL, ACQUISITION SOURCE GATX recognizes that railcars are long- lived assets and that each invest
Slide 25: Business Model: BUY
Business Model: BUY GATX’s Railcar Supply Strategy is to acquire railcars froma variety of sources versus manufacturing its own railcars. Large, multi-year orders for new cars from manufacturers Spot orders for new cars to meet specific customer demand Fleet acquisitions of existing cars from other
Slide 26: Business Model: LEASE
Business Model: LEASE Customers prefer GATX because of its diverse fleet, technical expertise to meet unique needs, and superior ongoing service. HIGH FLEET UTILIZATION STRONG CUSTOMER RELATIONSHIPS = Focus on utilization, adjusting rate and term to = High-quality and diverse base of over 850 captur
Slide 27: Business Model: SERVICE
Business Model: SERVICE GATX has built a strong market position by focusing on full-service leasing in North America and Europe. MAINTENANCE = Customers rely on GATX to manage the complex process of maintaining railcars * Premium service minimizes railcar quality issues and unexpected downtime " Ext
Slide 28: Business Model: MAXIMIZE
(Income from sale of owned assets) *Includes a $3.8 million scrap loss on customer damaged cars that was largely offset by an early termination fee
Slide 29: Industry Ownership: North America
Industry Ownership: North America Approximately 1.65 million railcars RAILROADS (16%) LESSORS G6 = Ownership of railcars continues decline = Shift from railroad- and shipper- owned = Virtually no tank car ownership due railcars to lessors to complexities and regulations = Lessors dominate the tank c
Slide 30: North American Tank and Freight Car Fleet
Based on approximately 438K tank cars Based on approximately 1.2M freight cars (Approximately 1.65M railcars) UMLER as of January 2021
Slide 31: Lessor-Owned Railcars in North America
Based on approximately 358K lessor-owned tank cars Based on approximately 561K lessor-owned freight cars (Based on approximately 919K lessor-owned railcars) UMLER as of January 2021
Slide 32: North American Carloads
(Based on 2020 U.S and Canadian carloads of approximately 15.2M) M IL L IO N S (United States and Canada) *Association of American Railroads for 52 weeks ending 12/26/2020
Slide 33: Railcar Industry Data
Railway Supply Institute as of April 2021
Slide 34: Railcar Industry Data
Railway Supply Institute as of April 2021
Slide 35: Rail North America Customer Base
As of 12/31/2020 Note: Customer families sometimes include more than one customer account; 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.
Slide 36: Rail North America Fleet by Car Type
13k-19k gallon <4k cubic feet 20k-25k gallon >25k gallon >4k cubic feet As of 12/31/2020
Slide 37: Asset Growth and Investment
*Over the period shown **Assets include on- and off-balance sheet (In accordance with the new lease accounting standard, off-balance sheet assets and recourse debt are no longer applicable beginning in 2019)
Slide 38: Maintenance Services
Services range from routine maintenance and regulatory programs to car modifications and rebuilds, including all mechanical repairs, interior cleaning, interior/exterior blasting, interior/exterior coatings, valve maintenance and qualification, and more. As of 12/31/2020
Slide 39: European Railcar Market
(Based on approximately 728K railcars) *GATX management estimates as of 6/30/2020
Slide 40: European Tank and Freight Car Fleet
Based on approximately 136K tank cars Based on approximately 592K freight cars (Approximately 728K railcars) GATX management estimates as of 6/30/2020
Slide 41: European Lessor-Owned Railcars
Based on approximately 95K lessor-owned tank cars Based on approximately 141K lessor-owned freight cars (Based on approximately 236K lessor-owned railcars) GATX management estimates as of 6/30/2020
Slide 42: GRE Fleet and Revenue Mix
Approximately 26.3K railcars as of 12/31/2020Based on 2020 GRE Revenues
Slide 43: GRE Top Customers
Top 20 customers based on 2020 revenue As of 12/31/2020
Slide 44: GRE: Service Offerings
GRE: Service Offerings MAINTENANCE * GRE's goal is to ensure maximum railcar availability * Proven track record of extremely high safety standards and technical expertise * Owned workshop and certified contract partners = GRE arranges for the cleaning of tanks and freight cars combined with schedule
Slide 45: Indian Railcar Market
As of 12/31/2020 (Based on approximately 300K railcars)
Slide 46: Railcar Lessor Ownership Share Over Time
1% 10% 40% 50% 1990 1998 2016 2019* *Based on management estimates
Slide 47: World Air Passenger Traffic Evolution
Chart Source: IEA (Last updated 4 Dec 2020) World air passenger traffic evolution, 1980-2020, IEA, Paris https://www.iea.org/data-and-statistics/charts/world-air-passenger-traffic-evolution-1980-2020. All rights reserved.
Slide 48: RRPF Affiliates Overview
RRPF Affiliates Overview The RRPF affiliates portfolio has contractual future lease receipts of over $2.7B. OVERVIEW RRPF Growth in Revenue & NBV $500 = GATX established its first partnership with Rolls-Royce plc in 1998 =Total NBV of engines has grown at a CAGR of 14.5% since RRPF’s establishment;
Slide 49: Global Tank Container Fleet
*International Tank Container Organization 2021 Global Tank Container Fleet Survey
Slide 50: Tank Container Leasing Market Share
(Based on global tank container fleet of approximately 686K) Source: International Tank Container Organization, 2021 Global Tank Container Fleet Survey 1Includes owned and managed tank containers 2Includes Raffles Leasing (Based on approximately 316.7K tank containers in leasing company fleets)
Slide 51: Tank Container Commodities
Ethanol, ethyl acetate, glycol, polyol, resin Benzene, toluene, resin, phenol, styrene, surfactant (alkybenzene sulfonate) Wines, spirits, vegetable oils Hydrogen peroxide Ethanol, ethyl acetate, glycol, polyol, resin Benzene, toluene, resin, phenol, styrene, surfactant Wines, spirits, vegetable oil
Slide 52: Appendix
Slide 53: Reconciliation of Non-GAAP Measures: Net Income
Net Income (in millions) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Net income (GAAP) 110.8$ 137.3$ 169.3$ 205.0$ 205.3$ 257.1$ 502.0$ 211.3$ 211.2$ 151.3$ Less: Net income from discontinued operations (GAAP) n/a n/a n/a n/a n/a n/a 34.2 20.8 30.4 1.1 Net income from continuing operations (GA
Slide 54: Reconciliation of Non-GAAP Measures: Net Income and EPS
Net Income (in millions) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Adjustments attributable to discontinuing operations, net of taxes: Net casualty gain at ASC n/a n/a n/a n/a n/a n/a - - (8.1) - Impact of the Tax Cuts and Jobs Act of 2017 n/a n/a n/a n/a n/a n/a (22.7) 0.2 - - Total adjustm
Slide 55: On- and Off-Balance Sheet Assets
On- and Off-Balance Sheet Assets 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Total assets (GAAP) 5,846.0$ 6,044.7$ 6,535.5$ 6,919.9$ 6,894.2$ 7,105.4$ 7,422.4$ 7,616.7$ 8,285.1$ 8,937.6$ Off-balance sheet assets (1): Rail North America 884.5 863.5 887.9 606.1 488.7 456.5 435.7 430.2 - - Portfo