Gatx Corporation · NYSE:GATX
Gatx — Stifel 2023 Transportation & Logistics Conference
34 slides from Gatx's conference presentation, Feb 7, 2023
Slide 1: Stifel 2023 Transportation & Logistics Conference
Stifel 2023 Transportation & Logistics Conference February 7, 2023
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: History and Business Overview
History and Business Overview The following presentation contains unaudited financial information
Slide 4: GATX's 125-Year History
GATX’s 125-Year History $10B in assets & ~144K wholly owned railcars worldwide* Began Began Exited Formed Rolls-Royce Began rail Bob Lyons manufacturing listing on railcar & Partners Finance investments became 8th CEO railcars the NYSE manufacturing Affiliates (RRPF) in India in GATX history Acquire
Slide 5: GATX Business Segments
GATX Business Segments Rail North America Rail International Portfolio Management Trifleet One of the largest railcar lessors with GATX Rail Europe (GRE) is a leading Primarily composed of our 50% One of the largest tank container a diversified fleet of over 109,600 European tank car and fre
Slide 6: GATX Financial Highlights
GATX Financial Highlights Income Per Diluted Share, excluding tax adjustments and other items (non-GAAP) $6.07 $5.77 $5.37 $4.89 $5.06 $4.48 $4.41 $4.67 $4.59 $3.50 2013 2014 2015 2016 2017* 2018* 2019* 2020* 2021* 2022* Return on Equity, excluding tax adjustments and other items (non-GAAP) Investme
Slide 7: Environmental, Social and Governance
Environmental, Social and Governance Our ESG priorities center on four foundational pillars: OUR ETHICS OUR OUR OUR & INTEGRITY PEOPLE ENVIRONMENT COMMUNITIES Committing to operate our Protecting the safety of our Striving for the highest levels of Investing in safety training and business c
Slide 8: GATX Investment Highlights
GATX Investment Highlights Disciplined Management Team Market Leadership in Essential Businesses Long-term focused and experienced in across majority of the markets we operate managing across business cycles globally Superior Asset Allocation Highly diversified portfolio of transportation Critical S
Slide 9: Proven Business Model
Proven Business Model LEASE MAXIMIZE the railcar to a the value of the quality customer at railcar by selling or an attractive rate for scrapping at the a term that reflects optimal time the business cycle BUY SERVICE the railcar at an the railcar in a economically attractive manner that and competi
Slide 10: Business Model: MAXIMIZE
Business Model: MAXIMIZE GATX optimizes its fleet partly through selling railcars in the secondary market or scrapping them at the end of their useful lives. Our fleet of cost-advantaged, well-maintained modern railcars, leased to quality customers, allows us the opportunity to realize significant r
Slide 11: GATX Rail North America Overview
GATX Rail North America Overview Wholly Owned Car Type Average Locomotive Number of Countries of 2022 Fleet Count Count Fleet Age Count Customers Operation OVERVIEW U.S., Canada 109,600+ 160+ 18 years 540+ 850+ & Mexico Fleet Utilization* 9% 5% 100% 99% 31% 15% 98% Industries 98% Served 96% 96% 19%
Slide 12: Industry Ownership: North America
Industry Ownership: North America Approximately 1.63 million railcars RAILROADS LESSORS SHIPPERS TTX Ownership of railcars continues Shift from railroad- and Shipper ownership share has Railroad-owned equipment to decline shipper-owned railcars to declined slightly pool focused on box, flat,
Slide 13: Industry Fleet & Ownership Mix: North America
Industry Fleet & Ownership Mix: North America Railcars by Type Tank Car Ownership Share (Approximately 1.63M railcars) 18% <1% 5% 7% Lessor Shipper/Other 8% <1% Railroad 34% Based on approximately 439K tank cars 82% 19% Freight Car Ownership Share 27% 14% Lessor Railroad 17% 47% Covered Hopper Flat
Slide 14: Lessor Market Share: North America
Lessor Market Share: North America Lessor Ownership Share Tank Car Lessor Ownership Share (Based on approximately 920K lessor-owned railcars) 22% 17% GATX 12% Union Tank Car Trinity 17% CIT 10% GATX 33% 15% Other 32% 12% Based on approximately 360K lessor-owned tank cars 19% GATX 14% Freight Car Les
Slide 15: Industry Shipments & Carloadings: North America
Industry Shipments & Carloadings: North America Industry Shipment Composition Carloads Originated (Based on 2022 U.S and Canadian carloads of approximately 15.9M) (United States and Canada) 14 23% 26% 12 10 3% 3% MILLIONS 8 5% 14% 6% 6 6% 14% 4 Coal & Coke Forest & Paper Products 2 Farm Products Met
Slide 16: Quarterly Commodity Carload Traffic
THOUSANDS 0 1,000 1,500 2,000 2,500 500 1Q08 2Q08 Source: Association of American Railroads 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 Core Carloads 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 Coal & Coke 2Q12 3Q12 North America 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q1
Slide 17: Industry Backlog: North America
Industry Backlog: North America Cyclicality of the industry is illustrated by the backlog of orders at the railcar manufacturers. 160,000 Industry Backlogs 140,000 120,000 100,000 80,000 60,000 40,000 20,000 - ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’2
Slide 18: Actively Managing Through Cycles
Actively Managing Through Cycles GATX proactively manages changing market conditions by utilizing our strong customer relationships and the diversity of our fleet to adjust rate and term. STRONG MARKET WEAK MARKET STRONG MARKET WEAK MARKET STRONG MARKET 70 67 66 50% 63 62 60 54 60 40% , 23% 39% 30%
Slide 19: GATX Rail International Overview
GATX Rail International Overview Fleet Car Type Average Fleet Number of Primary Countries Count Count Age (GRE) Customers of Operation 2022 28,000+ in Europe (GRE) Germany, Poland, Austria, India, OVERVIEW 5,800+ in India 50+ 17 years 260+ Switzerland, Hungary, France, Czech Republic, The Netherland
Slide 20: GATX Rail Europe (GRE): Major Rail Markets
GATX Rail Europe (GRE): Major Rail Markets 72% of GRE’s revenue is generated in Germany, Poland, and Austria—strong rail freight transport economies. 3% 11% 19% 4% Fleet Structure Countries Served 4% 32% Germany Hungary Mineral Oil Poland France 50% LPG 6% 14% Austria Czech Republic Chemicals 12% Sw
Slide 21: GATX Rail India Overview
GATX Rail India Overview GATX obtained the first-ever wagon leasing license in 2012 and is the largest private railcar lessor in India. GATX’s Growth in India Key Attributes $220 $30 $200 Wholly Owned Fleet of over High Growth Opportunity $180 $25 5,800 railcars Actively seeks attractive $160 Servin
Slide 22: RRPF Affiliates Overview
RRPF Affiliates Overview Spare Engine Average Estimated Typical Fleet 2022 Count Fleet Age Useful Life Lease Term Utilization OVERVIEW 398 12 years 20-25 years 3-12 years 94.2% 11% 3% 6% 37% 8% RRPF Engine Types 17% 18% The RRPF affiliates portfolio has Trent XWB (A350) V2500 (A320) contractual futu
Slide 23: Portfolio Management Overview
Portfolio Management Overview Rolls-Royce & Partners Finance GATX Engine Leasing (GEL) Affiliates (RRPF) 3% 2% RRPF, our joint venture with Rolls-Royce plc, In January 2021, GATX commenced a leases aircraft spare engines to a group of direct investment program to commercial aircraft operators wo
Slide 24: Trifleet Overview
Trifleet Overview Fleet Average Estimated Typical Number of Primary Countries Count Fleet Age Useful Life Lease Term Customers of Operation 2022 ~22,000 owned Singapore, China, The OVERVIEW and managed tank 7 years 15-25 years 1-5 years ~300 Netherlands, Germany, containers United Kingdom 1% 6% Key
Slide 25: Financial Highlights
Financial Highlights
Slide 26: Financial Highlights: High-Quality and Consistent Cash Flows
Financial Highlights: High-Quality and Consistent Cash Flows GATX has over $3.4 billion in contractual Our strong operating cash flow provides future lease receipts. tremendous capital allocation flexibility. GATX Contractual Future Lease Receipts** Operating Cash Flow & Portfolio Proceeds $1,011 $4
Slide 27: Capital Allocation Framework
Capital Allocation Framework PRIORITY 1 Investment Volume $1,256 $1,132 $1,064 $1,031 $928 $860 $715 $723 MILLIONS $621 $589 Invest in core, $8.9 billion** of service-intensive investments over assets to maximize the past decade shareholder value 2013 2014 2015 2016 2017* 2018* 2019* 2020* 2021* 202
Slide 28: Capital Allocation Framework
Capital Allocation Framework PRIORITY 2 Leverage & Reduction of Secured Assets 6.0x 50% 5.0x 40% 4.0x 3.1x 30% Optimize the Maintain a solid 3.0x balance sheet investment 20% grade rating of 2.0x at least BBB/Baa2 10% 1.0x 0.0x 0% 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 Maintain capacity f
Slide 29: Capital Allocation Framework
Capital Allocation Framework PRIORITY 3 Cash Returned to Shareholders $1,500 $1,000 MILLIONS $500 In lockstep with Over the past Priorities 1 and 2, decade, more than return excess cash to $1.5 billion $0 shareholders returned to 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 shareholders Cumulat
Slide 30: Financial Highlights: Focus on Funding Optimization
Financial Highlights: Focus on Funding Optimization Over the past decade, GATX has lowered borrowing costs while lengthening the average borrowing term. Cost of Debt & Borrowing Term 7% 10 9 6% 6.1% 8.6 8 5% 7 6 4% 5 3.7% 3% 4 3.8 3 2% 2 1% 1 0% 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 20
Slide 31: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures
Slide 32: Reconciliation of Non-GAAP Measures
Net Income (in millions) Reconciliation of Non-GAAP Measures 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Net i ncome (GAAP) $ 169.3 $ 205.0 $ 205.3 $ 257.1 $ 502.0 $ 211.3 $ 211.2 $ 151.3 $ 143.1 $ 155.9 Les s: Net i ncome from di sconti nued operati ons (GAAP) n/a n/a n/a n/a 34.2 20.8 30.4 1
Slide 33: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Earnings per Share 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Diluted earnings per share from continuing operations (GAAP) $ 3.59 $ 4.48 $ 4.69 $ 6.29 $ 11.88 $ 4.98 $ 4.97 $ 4.24 $ 3.98 $ 4.35 Diluted earnings per share from discontinued operations (GAAP)
Slide 34: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures On- and Off-Balance Sheet Assets 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Total assets (GAAP) $ 6,535.5 $ 6,919.9 $ 6,894.2 $ 7,105.4 $ 7,422.4 $ 7,616.7 $ 8,285.1 $ 8,937.6 $ 9,541.7 $ 10,072.0 Off-balance sheet assets (1): Rail North America 887.9 606.1
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